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06/23/22 #48 COMPASS-IEW2004atIEA 1 Economy-Energy-Environment Model COMPASS Simulation (COmprehensive Model for Policy ASSessment) Kimio Uno, Ph.D., Keio Univ.

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Page 1: 6/2/2015#48 COMPASS-IEW2004atIEA1 Economy-Energy-Environment Model COMPASS Simulation (COmprehensive Model for Policy ASSessment) Kimio Uno, Ph.D., Keio

04/18/23 #48 COMPASS-IEW2004atIEA 1

Economy-Energy-Environment Model

COMPASS Simulation

(COmprehensive Model for Policy ASSessment)

Kimio Uno, Ph.D., Keio Univ.

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04/18/23 #48 COMPASS-IEW2004atIEA 2

Abstract: The Asian energy scene warrants careful monitoring due to extremely

high economic growth which induces rapid expansion in energy demand.• COMPASS results are compared with projections by IEA and APERC.• Performance indicators for major Asian countries relating to CO2

emissions per capita which is decomposed into income per capita Y/N

energy consumption per unit income E/Y andCO2 emissions per energy consumption Z/E.Comparisons are made with some major developed and developing economies.

• The relevant variables are derived from an internationally linked econometric model covering macro-economy, input-output structure, energy balances, and international trade.

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List of Contents:

• 1. Further Actions against Climate Change

• 2. Asia in a Global Community

• 3. Uses and Usefulness of Models

• 4. Country Performance Indicators based on a Consistent Global Projection

• 5. Energy Balance Simulation

• 6. Policy Implications

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1. Further Actions on Climate Change

• The manufacturing base of the world has shifted to major developing countries.

• Beyond the 1st commitment period of the Kyoto

• What are the costs and/or co-benefits of mitigation actions? Employment? Prices? Economic competitiveness? Energy balances?

• How each country will fare in the changing international community ?

• What is the potentials of technology?

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Table 1. World Energy Consumption and CO2 Emissions, 1995

Region Region Trade Region Status Total Primary Energy Supply (TPES)code matrix OECD APEC AnnexI OPEC Coal Crude Oil Pet Prod. Gas Total

code1 Belgium-LuxBE # =1

Belgium OECD Annex I 9.10 27.05 -6.07 10.61 52.40Luxembourg OECD Annex I 0.51 0 1.83 0.56 3.38

2 Denmark DK # =2 OECD Annex I 6.45 10.45 -1.14 3.12 20.293 France FR # =3 OECD Annex I 16.06 82.99 3.57 29.57 241.394 Germany DE # =4 OECD Annex I 91.03 106.08 29.63 66.4 338.985 Greece GR # =5 OECD Annex I 8.39 17.33 -3.16 0.04 23.646 Ireland IE # =6 OECD Annex I 3.13 2.32 3.35 2.33 11.357 Italy IT # =7 OECD Annex I 12.33 89.16 5.34 44.84 161.548 NetherlandsNL # =8 OECD Annex I 9.19 64.12 -36.74 34.08 73.299 Portugal PT # =9 OECD Annex I 3.60 13.71 -0.02 0 19.25

10 Spain ES # =10 OECD Annex I 19.51 57.13 -1.47 7.72 103.2911 UK GB # =11 OECD Annex I 48.64 100.50 -15.88 65.05 224.4912 Austria AT # =12 OECD Annex I 3.29 9.36 1.64 6.31 26.2913 Finland FI # =13 OECD Annex I 6.05 9.19 -0.73 2.84 28.8514 Norway NO # =14 OECD Annex I 1.02 13.87 -5.86 3.46 23.5315 Sweden SE # =15 OECD Annex I 2.79 18.29 -2.29 0.68 50.9216 SwitzerlandCH # =16 OECD Annex I 0.19 4.83 7.63 2.19 25.1922 Fm USSR/RUUSSR # =17 193.39 255.70 -34.01 453.03 954.54

Russia APEC Annex I 108.96 191.55 -42.05 306.45 621.4823 Japan JP # =18 OECD APEC Annex I 82.59 230.41 39.16 52.02 497.0324 Iran IR # =19 OPEC 0.95 56.91 -5.34 28.60 82.4725 Iraq IQ # =20 OPEC 0.00 24.62 -2.85 3.24 25.0926 Kuwait KW # =21 OPEC 0.00 47.31 -35.77 4.13 15.6727 Oman OM # =22 OPEC 0.00 0.00 0.00 0.00 0.0028 Qatar QA # =23 OPEC 0.00 3.92 -3.09 7.04 7.8729 Saudi ArabiaSA # =24 OPEC 0.00 95.61 -11.90 32.94 83.6630 Untd Arab EmAE # =25 OPEC 0.00 16.74 -8.17 18.86 24.4631 Brunei BN # =26 APEC 0 0 0 0 032 Hong Kong, ChinaHK # =27 APEC 5.60 0.00 7.49 0.00 13.6733 India IN # =28 141.98 65.43 16.68 15.59 436.7034 Indonesia ID # =29 APEC OPEC 6.36 44.91 -3.09 30.16 124.9235 Korea Rp KR # =30 OECD APEC 26.85 89.64 4.46 8.32 148.0236 Malaysia MY # =31 APEC 1.61 20.36 -1.07 11.10 34.8737 Philippines PH # =32 APEC 1.16 16.44 1.68 0.01 35.3738 Singapore SG # =33 APEC 0.02 52.47 -32.50 1.45 21.4439 Thailand TH # =34 APEC 6.90 27.15 7.46 8.70 71.0740 Taiwan TW # =35 APEC 17.16 29.42 4.05 3.76 64.3841 China CN # =36 APEC 658.14 147.95 10.49 16.71 1058.6442 Australia AU # =37 OECD APEC Annex I 37.54 35.15 -0.79 16.74 94.5243 New ZealandNZ next updateOECD APEC Annex I 1.19 5.12 0.59 3.83 15.4444 Papua New GuineaPG next update APEC45 Canada CA # =38 OECD APEC Annex I 25.36 83.83 -5.66 67.09 232.3846 USA US # =39 OECD APEC Annex I 475.34 824.36 -19.94 508.67 2088.4747 Brazil BR # =40 11.73 67.01 7.34 4.26 156.3648 Chile CL next update APEC 2.40 8.71 1.15 1.38 18.6849 Mexico MX # =41 OECD APEC 5.43 84.84 -0.11 26.31 133.7650 Venezuela VE # =42 OPEC 0.21 54.51 -36.88 25.08 47.8751 Algeria DZ # =43 OPEC 0.52 25.65 -18.06 15.70 24.3052 Libya LY # =44 OPEC 18.49 -6.75 4.05 15.9153 Angola AO # =4554 Nigeria NG # =46 OPEC 0.09 14.59 -1.08 4.40 83.1855 Rest of EuropeREUROP # =4756 Rest of AsiaREASIA # =4857 Rest of OceaniaROCEAN # =4958 Rest of North AmericaRNAMER # =5059 Rest of South & Central AmerROAMER # =5160 Rest of AfricaRAFRIC # =5261 Rest of Continent nesUNIDEN # =5317 TurkmenistanTM in USSR 3.52 -0.81 11.20 13.7418 Uzbekistan UZ in USSR 1.07 6.99 -0.11 32.73 41.1019 Kazakstan KZ in USSR 31.84 99.92 0.42 10.19 53.8320 Azerbeijan AZ in USSR 0.00 9.27 -2.26 5.81 13.0021 Other Former USSROUSSR in USSR62 Peru PE next update 0.39 7.19 0.15 0.82 13.8363 Vietnam VN next update APEC 2.38 4.18 0.42 28.83

60 Countries/Regions in COMPASS Framework

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2. Asia in a Global Community Checking the Reliability of

Projections:• COMPASS: simulation results of 60 country/region with a

global coverage econometric model covering economy-energy-environment (CO2 emissions)

• World Energy Model (WEM) in IEA World Energy Outlook (OECD/IEA 2002), 18 countries/regions with a global coverage

• APERC scenarios in APEC Energy Demand and Supply Outlook 2002, 21 countries/regions with focus on Asia-Pacific

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Numerical Results:Models/

Scenarios

Year 2000 Year 2010

COMPASS

excl. rest of …

World 7,438

OECD 5,307

APEC 5,388

World 9,352

OECD 6,307

APEC 6,737

IEA’s WEM World 9,179

OECD 5,291

World 11,132

OECD 5,994

APERC APEC 5,658 APEC 7,073

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3. If the models are to be useful for policy debate,

• Geographic resolution at national level is needed• Time dimension should be

– medium (5-10 years to reflect policy change) to

– long-term (10-20 years or longer to deal with technological change)

• Time path of adjustment process to be described (introduce CO2 tax, then what happens to employment, prices, international trade, etc.) and not just the equilibrium that would prevails

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Models should help answer key questions such as:

• What has been the performance of individual countries? What about in the future?

• What are the costs and/or co-benefits of mitigation actions? Employment? Prices? Economic competitiveness? Energy balances?

• How each country will fare in the changing international community ?

• What is the potentials of technology?

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Emission Trade Tradable Permit CO2 Emission [Environment Model] Substitution among Energy Carriers

Country Primary Energy Energy Export and Import

[Energy Model] Transformation

Relative Prices Final Consumption

Oil Price Transformation Efficiency Exchange Rate Energy Intensity Interest Rate Output Final Demand Consumption Pattern = Lifestyle Country=Importers

Industry Country=Exporters

Country Industry Country Industry Input Structure = Tehnology

Final Demand, IncomeSaving-Investment BalanceBalance of Payments Prices

[Macro Financial Model] [Input-Output Model] [Trade Matrix Model] [Economy Model]

C I G E M

Y S T

Y S T

3E COMPASS LINKAGES

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Example of IO table

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Technology

• Technology transfer: the model should have a mechanism that describes technology (input coefficients, conversion efficiency, …) and

• Life style (final demand conversion, consumer durables, etc.)

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Technological Change as reflected in Input Coefficients

1980 1990 2000 1980 1990 2000

IronSteel

IronSteel

IronSteel

NonMinprod

NonMinprod

NonMinprod

1 Agricultur 0.000 0.000 0.000 1 Agricultur 0.000 0.000 0.000

2 Mining 0.017 0.024 0.037 2 Mining 0.121 0.072 0.099

3 Food 0.001 0.001 0.001 3 Food 0.001 0.003 0.002

4 Textiles 0.000 0.001 0.001 4 Textiles 0.003 0.004 0.004

5 Wood 0.001 0.003 0.003 5 Wood 0.004 0.006 0.005

6 Paper 0.001 0.001 0.001 6 Paper 0.014 0.019 0.017

7 Chemicals 0.006 0.006 0.005 7 Chemicals 0.017 0.020 0.020

8 Medicine 0.000 0.000 0.000 8 Medicine 0.000 0.000 0.000

9 PetroCoal 0.074 0.039 0.037 9 PetroCoal 0.070 0.029 0.030

10 RubberPlas 0.001 0.001 0.001 10 RubberPlas 0.001 0.005 0.005

11 NonMinprod 0.007 0.007 0.006 11 NonMinprod 0.125 0.120 0.125

12 IronSteel 0.524 0.502 0.523 12 IronSteel 0.017 0.013 0.015

13 Nonferro 0.009 0.009 0.011 13 Nonferro 0.006 0.004 0.005

14 MetalProd 0.001 0.001 0.001 14 MetalProd 0.002 0.010 0.010

15 Machinery 0.002 0.000 0.000 15 Machinery 0.004 0.004 0.004

16 OfficeComp 0.000 0.000 0.000 16 OfficeComp 0.000 0.000 0.000

17 Electrical 0.000 0.000 0.000 17 Electrical 0.000 0.000 0.000

18RadioTVCom 0.000 0.000 0.000 18

RadioTVCom 0.000 0.000 0.000

19 ShipsRep 0.000 0.000 0.000 19 ShipsRep 0.000 0.000 0.000

20 OtherTrans 0.000 0.000 0.000 20 OtherTrans 0.000 0.000 0.000

21 MotorVehic 0.000 0.000 0.000 21 MotorVehic 0.000 0.000 0.000

22 Aircraft 0.000 0.000 0.000 22 Aircraft 0.000 0.000 0.000

23 PersGoods 0.000 0.000 0.000 23 PersGoods 0.000 0.000 0.000

24 OtherManuf 0.000 0.000 0.000 24 OtherManuf 0.000 0.001 0.001

25 Electricty 0.040 0.038 0.032 25 Electricty 0.056 0.032 0.029

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36 Industrial Branches Compass OECD IO models Compass APEC IO models

For SITC codes go to the next sheet SITC and select the short CodeThis will give you all SITC codes for the selected branch

Number Description Short Code Standard Code ISIC Definition1 Agriculture, forestry and fishery AFF AG_FO_FI 1

1 Paddy PAD PADDY2 Other Agriculture OAG OTH_AGRI3 Livestock LIV LIVESTOC4 Forestry FOR FORESTRY5 Fishery FIS FISHERY

2 Mining and Quarrying MAQ MIN_QUAR 26 Crude petroleum, nat. and liq.gasCRP CR_NA_LI7 Other mining and quarrying OMQ OTH_MINI

3 Food, beverages and tobacco 8 Food, beverage and tobacco FBT FO_BE_TO 314 Textile, apparel and leather 9 Textile, apparel and leather TAL TE_AP_LE 325 Wood and furniture products 10 Wood products and furniture WAF WOO_FURN 336 Paper, paper products and printing 11 Paper, paper products and printingPAP PA_PP_PR 34

12 Chemical products CHE CHE_PROD7 Industrial Chemicals CHI IND_CHEM 351+352-35228 Drugs and medicine CHD DRU_CHEM 35229 Petroleum and coal products 13 Petroleum and petro products PCP PET_COAL 353+354

10 Rubber and plastic products 14 Rubber Products RPP RUB_PLAS 355+35611 Non metalic mineral products 15 Non metallic mineral products NMP NOM_MINP 36

16 Metal products and Primary MetalsPMP MEP_PRIM12 Iron and steel IAS IRO_STEE 37113 Non ferrous metals NFM NON_FERR 37214 Metal products MEP MET_PROD 381

17 Machinery MAC MACHINER15 Non electrical machinery NEM NOE_MACH 382-382516 Office and computing machinery OAC OFF_COMP 382517 Electrical apparatus nec ELM ELE_MACH 383-383218 Radio, TV and communication Equipment RTC RA_TV_CO 3832

18 Transportation equipment TET TRA_EQUI19 Shipbuilding and repairing TES SHI_REPA 384120 Other transportation meams TEO OTH_TRAM 3842+3844+384921 Motor vehicules TEM MOT_VEHI 384322 Aircraft TEA AIRCRAFT 3845

19 Other manufacturing products AOM ALO_MANU23 Professional goods PRG PRO_GOO 38524 Other manufacturing OMA OTH_MAN 3935 Other producers OTP OTH_PROD25 Electricity, gas and water 20 Electricity, gas and water supply EGW EL_GA_WA 426 Construction 21 Construction CON CONSTRUC 5

22 Trade and transportation TRT WRT_TRAN27 Wholesale and retail trade WRT WHO_RETA 61+6228 Restaurants and hotels RAH RES_HOTE 6329 Transport and storage TRA TRA_STOR 71

23 Other Services OSE OTH_SERV30 Communication COM COMMUNIC 7231 Finance and insurance FAI FIN_INSU 81+8232 Real estate and business services RAB REA_BUSI 8333 (Community), social and personal services SPS CO_SO_PE 934 Government services 24 Produces of government servicesGOV GOV_SERV36 Statistical discrepancy 25 Others and Discrepancy SDY STA_DESC

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4. Derivation of indicators

Easy-to-Understand quantitative measures are needed.Should be based on consistent modeling framework.

where• E: energy consumption (TPES) from the model• N: population exogenous• Y: income from the model• Z: global warming gas emissions (CO2) from the model

• Accounting framework (SNA, IO, Energy Balance, etc.) is also needed. Environmental Accounting (SEEA, NAMEA) can be derived.

E

Z

Y

E

N

Y

N

Z

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Indicators: 1980-2010US, Canada, Australia NAA_YN_index

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1.8

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

US Y/ N index

Canada Y/ N index

Australia Y/ N index

NAA_EY_index

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

US E/ Y index

Canada E/ Y index

Australia E/ Y index

NAA_ZE_index

0

0.2

0.4

0.6

0.8

1

1.2

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

US Z/ E index

Canada Z/ E index

Australia Z/ E index

NAA_ZN_index

0

0.2

0.4

0.6

0.8

1

1.2

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

US Z/ N index

Canada Z/ N index

Australia Z/ N index

Z/N

Y/N

E/Y

E/Z

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Indicators, 1980-2010Europe (France, Germany, Italy,

UK)

EU_YN_index

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1.8

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

France Y/ N index

Germany Y/ N index

Italy Y/ N index

UK (GB) Y/ N index

EU_EY_index

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

France E/ Y index

Germany E/ Y index

Italy E/ Y index

UK (GB) E/ Y index

EU_ZE_index

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

France Z/ E index

Germany Z/ E index

Italy Z/ E index

UK (GB) Z/ E index

EU_ZN_index

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

France Z/ N index

Germany Z/ N index

Italy Z/ N index

UK (GB) Z/ N index

Z/N

Y/N

E/Y

E/Z

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Indicators, 1980-2010South-East Asia (Philippines, Malaysia, Thailand)

SEA_YN_index

0

0.5

1

1.5

2

2.5

3

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

Philippines Y/ N index

Malaysia Y/ N index

Thailand Y/ N index

SEA_EY_index

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

Philippines E/ Y index

Malaysia E/ Y index

Thailand E/ Y index

SEA_ZE_index

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

Philippines Z/ E index

Malaysia Z/ E index

Thailand Z/ E index

SEA_ZN_index

0

0.5

1

1.5

2

2.5

3

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

Philippines Z/ N index

Malaysia Z/ N index

Thailand Z/ N index

Z/N

Y/N

E/Z

E/Y

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Indicators, 1980-2010Major Developing Countries

(Indonesia, China, India, Brazil, Mexico, Russia, Saudi Arabia)MDC_CIT_OP_YN_index

0

0.5

1

1.5

2

2.5

3

3.5

4

Indonesia Y/ N index

China Y/ N index

India Y/ N index

Brazil Y/ N index

Mexico Y/ N index

Russia Y/ N index

Saudi Arabia Y/ N index

MDC_CIT_OP_EY_index

0

0.5

1

1.5

2

2.5

3

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

Indonesia E/ Y index

China E/ Y index

India E/ Y index

Brazil E/ Y index

Mexico E/ Y index

Russia E/ Y index

Saudi Arabia E/ Y index

MDC_CIT_OP_ZE_index

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

Indonesia Z/ E index

China Z/ E index

India Z/ E index

Brazil Z/ E index

Mexico Z/ E index

Russia Z/ E index

Saudi Arabia Z/ E index

MDC_CIT_OP_ZN_index

0

0.5

1

1.5

2

2.5

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

Indonesia Z/ N index

China Z/ N index

India Z/ N index

Brazil Z/ N index

Mexico Z/ N index

Russia Z/ N index

Saudi Arabia Z/ N index

 

 

Z/NY/N

E/Y

E/Z

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6. Policy Implications:• CDM 5 to 50 billion US$/year• ODA about 50 billion US$/year• FDI about 2000 billion US$/year

• World industrial base is shifting to developing countries.

• Two different rules in the world!

• Possible scenarios: (1) Technology purchase by host countries(2) Technology purchase by developed countries / international mechanism(3) Technology transfer through FDI. Liberalization of energy market is the

prerequisite.

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End of Presentation

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Energy Balance

Energy Consumption Industry

Transportation

Residential, etc.

Energy Conversion

Primary Energy Supply CO2

Production

Accounting Framework

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Input-Output TablesIntermediate Deliveries

Input

Value added

Final Demand

Output

Output

Accounting Framework

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System of National Accounts (SNA)

Final Demand

C+I+G+E-M

Production K,L,Energy

Income

Accounting Framework

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Example of Sna

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Financial Flows

Spending Saving

Financial Stock

Borrowing

Country A

Country B

Foreign Direct Investment

IMF

Accounting Framework

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Example of Financial

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Trade Matrix

Exporters

Importers

Commodities:

Oil

Auto, etc.

Accounting Framework

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Example of trade matrix

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COMPASS Database and Simulation Model

1 .M A C

= M acro + F in an ce

2 .S IO

= S ys tem o f IO+ M ac ro M od e l

3 .E N E

= E n erg y B a lan ce + E m iss ion s

4 .Trad e

= Trad e M od e l

M eta d a taan d

M od e l B u ild e rG U I

Historical Data + Projected Data

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Meta Data System

Primary Data Sources

Integrated Relational Database

TheoryStandard Classification

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Data = Open International sources• IMF, International Financial Statistics

• UN, System of National Accounts

• UN (Statistics Canada), International Trade Statistics

• OECD, Input-Output Database

• IDE, Input-Output Tables

• IEA, Energy Balance Tables

• IEA, Energy Prices and Taxes

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Beware of problems of indicators

Should not be a wish list !!!

• Interlinkages among indicators must be recognized

• Policy measures must be incorporated

Modeling is not an exact science. It is a way of systematizing scenarios.

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Beware of international comparisons

• Countries are in various stages of development and urbanization

• Countries have different geographic span, climate, resource endowment

• Exchange rates are not the best tools for international conversion; PPP is ???

• National boundaries do not coincide with economic boundaries

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International Financial Flows

• CDM• Foreign direct investment (FDI), particularly for

the power industry• Official Development Assistance (ODA)

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A. Scope of the Model

• Global linkage is the key: goods and services, saving and investment, energy

• Capital turnover promoted by R&D, subsidies, new technology, deployment, cost reduction in industry

• Modal shift in transportation

• Consumer durables and best practice

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Future Development

• A. Scope of the model

• B. Derivation of indicators

• C. Capacity building among participating countires

Details will be described below.

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Sinks

• Land use

• Forestry

• Absorption according to Kyoto assumptions, etc.

• Oceans (difficult in an economic models)