phoenix - cgd

Phoenix

Ian Sue Wing, Boston University

Karen Fisher Vanden, Penn State

Katie Daenzer, Penn State

Phoenix

• Partners : Boston University, Joint Global Change Research Institute (JGCRI), and Penn State University

• Goal : construct a community-based, open-source CGE model capable of modeling both sectoral and economy-wide climate policies

• The model :

– Recursive dynamic simulation of world economy

– 26 regions, 26 sectors (5 energy commodities), 3 primary factors

– Static sub-model calibrated on GTAP 7.1 database and IEA energy balances

– Dynamic process on a 5-year time step for 2005-2100, capturing regional capital accumulation; cumulative fossil fuel resource depletion; carbon dioxide emissions; price-driven renewable, nuclear and hydro resource supply expansion

– Core CGE structure written in GAMS using MPSGE

Phoenix Regions

Phoenix Sectors

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Industrial Sectors

Fishing

Agriculture

Forestry

Coal*

Oil*

Gas*

Transport Equipment

Mining & Quarrying

Construction

Machinery & Equipment nec

Clothing

Non-durable Goods

Food & Tobacco

Paper Products & Publishing

Wood Products

Refined Oil Products*

Chemicals, Rubber, Plastics

Non-metallic Minerals

Iron & Steel

Non-ferrous Metals

Electricity*

Transport (other)

Water Transport

Air Transport

Unspecified Other

Services

• Homogeneous Output

• Nested CES production structure varies across commodities, but not regions

Example of CES nesting in the non-energy material sectors.

*Energy commodities

Phoenix Trade Detail

• Heckscher-Ohlin Trade : crude oil & natural gas commodities

– Track each region’s exports and their imports from the global pool

• Armington Trade : remaining 24 commodities

– Track the flow of each commodity from an exporting region to each of the remaining 25 importing regions

5

Energy Technology Detail

• Electricity: nine types of electric power generation: coal, oil, natural gas, biomass, nuclear, hydro, geothermal, solar, and wind

• IEA electricity data is used to disaggregate and calibrate the single GTAP electric sector

• Backstop: Four backstop energy supplies: NGCC-CCS, IGCC-CCS, coal-syngas, biofuels

• Transportation: Fossil-, biofuel-, and electricity- powered household own-supplied and road/other transportation subsectors

Phoenix Activities

• Inter-Model Comparisons

• Participation in the Asian Modeling Exercise (AME), Energy Modeling Forum 27, and the Latin America Modeling Project (LAMP)

• Publications • Fisher-Vanden, K., K. Schu, I. Sue Wing, and K. Calvin, 2012,

“Decomposing the impact of alternative technology sets on future carbon emissions growth,” Energy Economics (34): S359-S365

• Daenzer, K. I. Sue Wing, K Fisher-Vanden, 2014, “Coal’s medium-run future under atmospheric greenhouse gas stabilization,” Climatic Change (123): pp763-783.

Coal’s Medium-Run Future

• Assess the future of coal under alternative climate stabilization regimes

• Investigate how the quantity and location of production, trade, and use depends upon:

• Energy-saving structural change

• Resource depletion

• Diversification and deepening of international trade

• Economic growth

• Availability of carbon capture and storage technology


• EMF 27’s BAU, 550 ppm & 450 ppm stabilization scenarios


• Energy-saving structural change



• Economic growth


Red scenarios come from the EMF 27 exercise. Black scenarios were generated by the PHX team.




• AEEI × 1.85 & AEEI ÷ 1.85



• Economic growth






• AEEI × 1.85 & AEEI ÷ 1.85

• Supply-side constraint of resource depletion


• Economic growth

• CCS on & CCS off





• AEEI × 1.85 & AEEI ÷ 1.85

• Remove depletion penalty

• Double & halve Armington elasticity

• ± 10% changes in labor productivity growth rates

• CCS on & CCS off


Coal’s Medium-Run Future Results

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• Consequential to our analysis is the large increase in the AEEI growth rate under the required EMF LowEI scenarios, which exceeds the plausible amplitude of variation in other input parameters.

• For this reason the magnitude of changes in model outputs must be normalized with respect to the parameter perturbations.

Production Exports

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• Nordhaus (1994) calculates the Euclidean distance of the target output variable from its level under baseline parameter assumptions

Production Exports

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• We extend this approach by calculating the arc-elasticity, using the change in output variables to both the high and low input values, which are normalized by the percentage change in input variables relative to the baseline.

Production Exports

BAU


GHG Tax Labor Prd. AEEI Trade

Depl. Penalty

Production

BAU - 0.11 -0.08 0.001 0.07

Policy, CCS -0.81 (-0.73) 0.13 -0.06 0.002 0.03

No CCS -0.85 (-0.81) 0.13 0.06 0.002 0.02

Exports

BAU - 0.10 -0.07 0.01 0.009

Policy -0.45 (-0.55) 0.13 -0.06 0.01 0.004

No CCS -0.48 (-0.59) 0.13 -0.06 0.01 0.000

BAU Regional Profile

• Regional analysis focused on the three largest cumulative producers and exporters of coal.

Region Cumulative Production

Cumulative Exports

Export Growth

Resource Depletion

Australia/NZ 483.9 (5%) 397.6 (25%) 2.35% 5%

China/TWN 3909.5 (42%) 186.0 (12%) 1.27% 26%

India 736.3 (8%) 7.1 (<1%) 2.54% 22%

Russia 366.6 (4%) 192.9 (12%) 3.8% <1%

USA 1201.0 (13%) 138.5 (9%) 4.14% 2.3%

World 9413.3 1604.9

Share of world total in parenthesis.

BAU Regional Profile

• Inter-regional differences in rates of depletion drive shifting regional shares of world coal production & exports.

Region Cumulative Production

Cumulative Exports

Export Growth

Resource Depletion

Australia/NZ 483.9 (5%) 397.6 (25%) 2.35% 5%

China/TWN 3909.5 (42%) 186.0 (12%) 1.27% 26%

India 736.3 (8%) 7.1 (<1%) 2.54% 22%

Russia 366.6 (4%) 192.9 (12%) 3.8% <1%

USA 1201.0 (13%) 138.5 (9%) 4.14% 2.3%

World 9413.3 1604.9

Share of world total in parenthesis.

BAU Regional Sensitivity Results

• Aside from trade diversification, the top producers’ production responses mirror the global results

• Export responses do not -

% Change in Exports

Scenario Labor AEEI Armington Elas. Depl.

Australia/NZ ±4% -30%, +22% -5%, - -17%

China/TWN ±4% -9%, + 4% -20%, +2% 27%

India ±2% -24%, +17% -17.8%, -2.3% -29.9%

Russia +9%, -8% -34%, +25% +40%, -25% -23%

USA +10%,-8% -37%, +38% +31.2%, -18.1% -23%

World +5%, -4% -25%, +20% ±4% 1%

High and low sensitivity runs for the BAU scenario.

Regional Policy Results

• CO2 tax increases consumer coal prices, depressing demand & extraction below BAU levels in all regions.

• Interesting region-specific import results that are dependent upon trade and technology specification

Region Production Consumption Exports Imports

China/TWN -46%, -48% -46%, -58% +9%, -16.2% +29%, -7%

India -81%, -70% -61%, -69% +68%, +2% +112%, +39%

Change in cumulative values for the 550ppm and 450ppm scenarios relative to BAU


• Highlights the interactions between the penetration of IGCC-CCS and regions’ relative rates of depletion

• Coal is traded and purchased by IGCC-CCS tech at pre-tax prices

Region Imports

IGCC-CCS Coal Share

Pre-tax Price Growth Rate

China/TWN 550ppm +29% 20% 0.6%, 0.8%

450ppm -7% 47% 0.6%, 0.7%

India 550ppm +112% 28% -0.05%, 0.05%

450ppm +39% 56% 0%, 5%

Domestic, Import


• Highlights the interactions between the penetration of IGCC-CCS and regions’ relative rates of depletion

• Coal is traded and purchased by IGCC-CCS tech at pre-tax prices

Region Imports

IGCC-CCS Coal Share

Pre-tax Price Growth Rate

Gross-of-tax Growth Rate

China/TWN 550ppm +29% 20% 0.6%, 0.8% 4.9%, 4.1%

450ppm -7% 47% 0.6%, 0.7% 6.2%, 5.3%

India 550ppm +112% 28% -0.05%, 0.05% 6.7%, 3.7%

450ppm +39% 56% 0%, 5% 8.2%, 4.9%

Domestic, Import

Key Findings

• In the absence of a climate policy, coal remains the dominant energy source, being most sensitive to assumptions about economic growth and energy intensity.

• Imposing taxes on GHG emissions causes coal extraction to decline significantly at first and then rebound, but only if CCS technology is available. Global exports are much less responsive.

• Interregional differences in the rates of depletion are the fundamental driver shifting regional shares of production over time.

• Under alternative stabilization regimes, coal’s future in major producing and consuming regions is highly dependent upon the penetration of IGCC-CCS.

Ongoing Work

• Climate Impacts • Initial phase motivated by the LAMP exercises, with a focus on changing

agricultural yields, hydro capacity, and final energy demand

• Requires model restructuring – breaking our one agriculture sector into six, for example

• Non-CO2 Emissions

• Update Resource Base Data

Funding & Documentation

• EPA, Office of Air and Radiation, Office of Atmospheric Programs, Climate Change Division

• Detailed Model Documentation http://www.globalchange.umd.edu/models/phoenix/

http://www.globalchange.umd.edu/models/phoenix/







ANZ -19%, -25% -42%, -54% -13%, -20% +28%, -15%

China/TWN -46%, -48% -46%, -58% +9%, -16.2% +29%, -7%

India -81%, -70% -61%, -69% +68%, +2% +112%, +39%

Russia -56%, -54% -53%, -58% -44%, +55% -17%, -43%

USA -46%, -44% -40%, -54% -36%, -52% -37%, -58%





ANZ -19%, -25% -42%, -54% -13%, -20% +28%, -15%

China/TWN -46%, -48% -46%, -58% +9%, -16.2% +29%, -7%

India -81%, -70% -61%, -69% +68%, -2% +112%, +39%

Russia -56%, -54% -53%, -58% -44%, -55% -17%, -43%

USA -46%, -44% -40%, -54% -36%, -52% -24%, -50%

550ppm, 450ppm

Publications

• Fisher-Vanden, K., K. Schu, I. Sue Wing, and K. Calvin, 2012, “Decomposing the impact of alternative technology sets on future carbon emissions growth,” Energy Economics (34): S359-S365

• Daenzer, K. I. Sue Wing, K Fisher-Vanden, 2014, “Coal’s medium-run future under atmospheric greenhouse gas stabilization,” Climatic Change (123): pp763-783.

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Phoenix Regions

Australia & New Zealand

Rest of World

China & Taiwan

Japan

Korea

South Asia

Indonesia

India

Canada

USA

Mexico

Other Latin America

Columbia

Venezuela

Brazil

Central America & Caribbean

European Union 15

Other European Union 27

Western Other Europe

Eastern Other Europe

Russia

Central & Other Asia

Middle East

North Africa

Sub-Saharan Africa

South Africa

Industrial Sectors

Fishing

Agriculture

Forestry

Coal*

Oil*

Gas*

Transport Equipment

Mining & Quarrying

Construction

Machinery & Equipment nec

Clothing

Non-durable Goods

Food & Tobacco

Paper Products & Publishing

Wood Products

Refined Oil & Coal Products*

Chemicals, Rubber, Plastics

Non-metallic Minerals

Iron & Steel

Non-ferrous Metals

Electricity*

Transport (other)

Water Transport

Air Transport

Unspecified Other

Services

phoenix - cgd

Documents