－Quantitative and qualitative assessment of LCS using Asia-Pacific Integrated Model (AIM)－

Methodologies to Estimate Pathways

Mikiko KainumaNational Institute for Environmental Studies

Pathways toward low carbon societies in Asia by 2050 and contributions of Japan to their realization

13 November 2013

COP19 Side Event at Japan Pavilion

http://2050.nies.go.jp/COP/COP19

AIM (Asia‐Pacific Integrated Model): A model for quantified LCS assessment

• AIM is an integrated assessment model to assess mitigation options to reduce GHG emissions and impact/adaptation to avoid severe climate change damages

• Developed since 1990• First set of models focusing on Asia‐Pacific region to assess the strategies of low carbon development plan quantitatively

2

Examples of Brochures introducing Asian Low Carbon ScenariosCommunication and feedbacks of LCS study to real world

2009/11

2012/02

2011/10

2011/03

2010/10

2007/05 2009/10 2009/112009/10

2013/052009/08,2012/11

2011/09,2012/112009/10,2012/02 2010/02,2012/09 2010/10,2012/10

3

2013/03 2013/07 2013/10

2013/10

2010/11

2013/05

ShigaJapan

ShigaJapan

KyotoJapan

JilinChina

GuangzhouChina

India

AhmedabadIndia

BhopalIndia ThailandIndonesia

IskandarMalaysia

MalaysiaCyberjayaMalaysia

Vietnam Bangladesh

Korea

IskandarMalaysia

Khon KaenThailandCambodia

PutrajayaMalaysia

PutrajayaMalaysia

http://2050.nies.go.jp/LCS/

Methodology for LCS Action Plan

• Identify emission reduction potentials and its co-benefit

• Estimate the cost of policy measures

• Provide incentives for use of innovative technologies

• Prioritize investments

• Promote behavioral and lifestyle changes

• Monitor performance

Information and Data Collection• Identification of data sources • preliminary data formation

Synthesis and Preliminary Analysis• Information collection for present practices and policies

• Data compilation

Modeling and Analysis• Development of storylines• Quantification scenarios

Developing LCS Action Plan• Quantification of LCS action plans• Development of  roadmaps

Process Objectives/Outputs

B

A

Modeling

Structure of AIM model

Impact/Adaptation Model

Emission Model

【Country】

【Global】

【sequentialdynamics】

【dynamicoptimization】

【Local/City】

Agriculture

Water

Human health

Simple Climate Model

Other Models

future society

Population Transportation Residential

GHG emissions

temperature

【Global】 【National/Local】

feedback

AIM/Impact[Policy]

Burden share Stock‐flow

mid‐term target

IPCC/WG3

IPCC/WG2

IPCC/integrated scenario

carbon tax

long‐term vision

Accounting adaptation

low carbon scenario

Mitigation Target, Climate Policy, Capacity building, ...    What are assessed and how?

Economic model

Enduse model

Account model

AIM (Asia-Pacific Integrated Model) is an integrated assessment model to assess mitigation options to reduce GHG emissions and impact/adaptation to avoid severeclimate change damages.

5

ExSSEnduse

CGE

Key Features and Assumptions Strengths Weaknesses

・ Choice of the most efficient mix of technologies to deliver services

・ In case of energy sector, provide a comprehensive, coherent picture of the energy system (from primary energy to final energy and energy services use)

・ Neglect feedback effects of emission reduction policies on the rest of the economy

・ Rich collection of related data, abundant in detail on various technologies and countermeasures

・ Do not capture demand-price interactions・ Useful for assessing and

identifying mitigation and efficiency potentials ・ Undervalue the

transaction costs of mitigation policies

・ Perfect foresight· simulates perfect competition among technologies and energies

・ Enable assessment of supply and demand-oriented policies to curb GHG emissions

・ Assume that markets react perfectly to price signals

•“Energy technology” refers to a device that provides a useful service by consuming energy

• “Energy service” refers to a measurable need that must be satisfied. 

Structure of the AIM/End‐Use Model

Outputs

Inputs

Characteristics of Bottom‐up (sector optimization) modelse.g. AIM/Enduse, AIM/AFOLU

From 1995, Japan Ministry of Environment used this model almost all times to evaluate the national reduction targets of Japan. Also, the case of China study conducted by Energy Research Institute, NDRC, PRC, and the National Thailand study by Thammasat University, Thailand caused hot, but positive discussions on Low Carbon Development within the nations.

6

• As for the investment amount for global warming, half of the overall investment amount will be collected by 2020 and an amount equal to the investment amount will be collected by 2030 based on energy expenses that can be saved through technologies introduced.

<Low-carbon investment amount and energy reduction expense>

2010

2015

2020

2025

2030

Energy saving investment through

2020

Volume of reduction from energy saving technologies

Energy reduction expense from energy saving investment= approx. 50 trillion yen(25% reduction)

In the case of device with 10 year lifespan

Energy reduction expense from energy saving investment= approx. 49 trillion yen(25% reduction)

-36 -43 -50

-35 -42 -49

58 78 96

-100

-50

0

50

100

150

25% reduction

Additional investment(’11 – ’20 total)

Energy reduction expense(’11 – ’20 total)Energy reduction expense(’21 – ’30 total)

Japanese Case StudyRelationship between low-carbon investment

and energy reduction expense

20% reduction

15% reduction

Cos

t (Tr

illio

n Ye

n)

GHG Emissions in 2050

(Peak CO2)

GHG Mitigation by 2050 

(Peak CO2)

48.3%

8SIIT-TU

0100200300400500600700800

2005 2050BAU 2050LCPC

O2

Em

issi

ons (

Mt-

CO

2)Scenario

CommercialResidentialTransportIndustrial

0 100 200 300

Green Industry

Effective transport

Comfortable Houses

Smart Buildings

21178

1452

Mitigation of CO2 (Mt-CO2)

Miti

gatio

n ac

tion

Mitigation

Source: Bundit Limmeechokchai et al., 2013

Thailand Case Study

The covered sectors of the analysis are: Energy, AFOLU, Industrial and waste sectors.

Three national level quantification models/tools are expected to use. They are:

• Extended Snapshot model (ExSS) and AFOLU-A: To design LCS vision and quantify the GHG reduction potentials;

• Bottom-up type end-use model (AIM/enduse, AFOLU-B): To identify effective technologies and necessary financial policies for Low Carbon Growth;

• CGE model (AIM/CGE[basic]): To assess the macroeconomic impacts of Low Carbon Growth policies

SECTORS AND MODELSIndonesia Case Study

Source: Rizaldi Boer, 2013

020406080100120140160180200

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Cost[m

il.US$/year]

Mitigation cost

AGFPRWMPFFENRRILFPRSSRFSPLRPSR

0

100

200

300

400

500

600

700

800

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Mitigatio

n po

tential [MtCO2/year]

Mitigation potentialAGFPRWMPFFENRRILFPRSSRFSPLRPSR

020406080100120140160180200

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Cost[m

il.US$/year]

Mitigation  cost RAN15RAN14RAN13RAN12RAN11RAN10RAN9RAN8RAN7RAN6RAN5RAN4RAN3RAN2RAN1

0

100

200

300

400

500

600

700

800

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Mitigatio

n po

tential [MtCO2/year]

Mitigation potential RAN15RAN14RAN13RAN12RAN11RAN10RAN9RAN8RAN7RAN6RAN5RAN4RAN3RAN2RAN1

Mitigation potential & cost land use change

180 million US$/year in 2020750 million US$ in 10 years

672MtCO2/year in 20203.7GtCO2 in 10 years

Indonesia Case Study

Source: Rizaldi Boer, 2013

Characteristics of Top‐down (Computable General Equilibrium) modelsAIM/CGE

Key Features and

AssumptionsStrengths Weaknesses

・ Markets and the economy, as a whole, reach equilibrium, through price adjustments

・Able to estimate economy-wide costs of reduction policies, including trade effects

・ Poor description of energy end uses and technologies

・ Assume markets always work efficiently

・ Markets work efficiently (no market barriers, hidden costs or information barriers)

・Describes the details of economic interactions among sectors

・ Cannot well reflect short-run economic adjustment costs

・ Able to analyze long-term resource allocation

・Able to assess long-term effects of GHG abatement policies on structural change in a coherent macro-setting

・ Have a weak statistical basis (usually models are calibrated on a single-year basis)

output matrix

energy balance table(output)

energy balance table(input)

input matrix

ener

gyno

n-en

ergy

production sector final demand sector

value

adde

den

ergy

non

ener

gy

output coefficienton energy

production and cost

production and income

comm

odity

supp

lyco

mmod

ity de

mand

fixed capital stockmatrix

production social

cap.

good

s

capital stock

laborcapital

comp

ensa

tion

of ca

p. go

ods

final

cons

inves

tmen

t

impo

rt&ex

port

input coefficienton non-energy

output coefficienton non-energy

capital profilein sector

SNA

tech&preference

IO tablein 2000

fixed capitalformation

matrix in 2000

tech

tech V matrixin 2000

economicgrowth

input data in2000 assumption balance condition

intermediatedemand

ext. trnsact.account

account ofinc. & expnd.

Input coefficient on energy

energy balancetable in 2000

①

①

②

②

③

④

⑤

⑥

⑥

⑥

⑦

⑧

⑩①

①

⑪

⑦

⑩

⑪

⑨

②

tech

tech

output

CO2⑫ ⑫

Macroeconomic module

CGE module

① production function

② commodity market③ capital market④ labor market⑤ calculation of GDE⑥ expenditure and

income in production sector

⑦ expenditure and income in household and government

⑧ assumption of import and export

⑨ fixed capital stock matrix

⑩ investment goods market

⑪ capital stock⑫ CO2 emissions

Framework of AIM/CGE

Applied very often to evaluate national macro-economic impacts by GHG reduction targets of Japan. Also, we applied this model to many Asian countries, such as China, India, Indonesia, Thailand, Malaysia, Philippine, Vietnam, Taiwan and Korea.

There is potential to reduce GHG emissions by 69% compared to the reference case in AsiaG

HG

em

issi

ons

(GtC

O2e

/yea

r)

Action1: Urban TransportAction2: Interregional TransportAction3: Resources & MaterialsAction4: BuildingsAction5: BiomassAction6: Energy SystemAction7: Agriculture and LivestockAction8: Forest & LanduseOthers (CH4 and N2O emissions from other than agriculture and livestock

Reductions by

Asia (LCS)

• The global emissions will become 1.8 times larger compared to the 2005 level and emissions in Asia will be doubled under the reference scenario.

• It is feasible to reduce GHG emissions in Asia by 69% by introducing ten actions and Others (CH4 and N2O emissions from other than agriculture and livestock) appropriately compared to the reference scenario in 2050.

GHG Emissions in

the world (LCS)the world (Reference)

Structured Compact City

Mainstreaming trains and water transportation

Technology and finance to facilitate achievement of LCS

Transparent and Fair Governance that Supports LCS Asia

Urban Transport 

Interregional Transport

Resources & Materials

Buildings

Biomass

Energy System

Agriculture & Livestock

Technology & Finance 

Governance

Spread of high yields and low emission agricultural technologies

Smart material use that realizes the full potential of resources

Low carbon energy system with local resources

Smart buildings that utilize natural systems

Local production and local consumption of biomass

Forest & Landuse

Sustainable forest management

Ten Actions toward Low Carbon Asia are examined

Action 1

Action 2

Action 3

Action 4

Action 5

Action 6

Action 7

Action 8

Action 9

Action 10

Actions 1 & 2: TransportAction 1: Hierarchically Connected Compact Cities Compact cities with well-connected hierarchical urban centers A seamless and hierarchical transport system

Action 2: Mainstreaming Rail and Water in Interregional Transport• Formulation of industrial

corridors using a low carbon transport system

• Establishment tof an intermodal transport system incorporating rail and water

• Reduction of CO2 emissions from vehicles and aircraft

Low carbon vehicles with efficient road-traffic systems

Hierarchically Connected Compact City

Central Business District

Action 3:Smart Ways to Use Material that Realize the Full Potential of Resources

Production that dramatically reduces the use of resources Use of products in ways that extend their lifespan Development of systems for the reuse of resources

Consumption of Iron and steel

Lower per capita stock (8 t/cap), the saturation level of France and the UK, would decrease the steel demand in China significantly to the lower level of 0.3 Gt in 2050

Source: Mûller and Wang, 2009

Transition to low carbon emissions and low‐resource consumption societies, while simultaneously improving the economic standards of living is vital for sustainabledevelopment. Asia has many opportunities to realize an LCS by leapfrogging.

Key MessagesAchieving 2oC target is feasible

If all the actions proposed here are applied appropriately, 69% of the emissions in the Reference scenario can be reduced in Asia in 2050. This is in line with a global pathway with the 2oC target.

Early actions are  neededWhatever pathways are followed, GHG emissions should be reduced to zero in the long run to keep the climate at the corresponding level. More the actions are delayed, larger the reduction rates become and higher the stabilization level will be.GHG emissions need to be below zero to lower temperature. To realize negative emissions is very tough. 

Leapfrogging development in Asia leads to a Low Carbon Society

There is a danger that socio-ecosystem will not be recovered even if GHG concentrations are returned to the lower level.

Thank you very much!

The Low-Carbon Asia Research project is supported by the Environment Research and Technology Development Fund (S-6) of the Ministry of Environment, Japan

http://2050.nies.go.jp/COP/COP19