Lutz MFA Berlin

OECD Workshop on Material Flow Indicators
and related Measurement Tools

23-24 May 2005, Berlin
Modelling MF in multi-sector
economy-environment models
by
Christian Lutz
GWS mbH (Institute for Economic Structures Research)

Weissenburgerstrasse 4
D-49076 Osnabrück
Phone: +49 541 409 3312
Fax: +49 541 409 3311
Internet: www.gws-os.de
lutz@gws-os.de
Contents
1. Model PANTA RHEI: An Information Tool for the

Analysis of Sustainable Development in Germany
2. Baseline Forecast
3. Program for Growth of Material Productivity:

The “Aachen” Scenario
4. Global Model GINFORS
5. MFA requirements from a modeling perspective
2005 GWS mbH Page 2

1 Model PANTA RHEI: An Information Tool for the
Analysis of Sustainable Development in Germany
² Main features:
ð Bottom up structure:
§ modelling at the level of 59 homogenous economic
sectors/branches (2 digit NACE classification)
§ macroeconomic variables by aggregation
ð Full integration:
§ interindustry connections
§ consistent linkage of the industry accounts with the
generation, distribution, redistribution and use of income
ð Empirical validation of parameters and model
§ econometric estimation of parameters
§ historical simulation (ex post)
§ ex ante simulation
ð Ability to explain structural change
ð Solution year by year with a Gauss-Seidel algorithm

Model PANTA RHEI
² Database from 1991 to 2000:

ð System of National Accounts (SNA)
ð Monetary IO tables (MIOT)
ð NAMEA-type accounts of the GEEA
(59 or more branches)
§ energy
§ air emissions
§ built-up and traffic area
§ transport
ð Socio-Economic Accounts (SEA)
ð MFA (Wuppertal Institute):
§ 59 branches – 5 materials
§ domestic extraction used – unused
§ imports
§ indirect flows associated with imports

Model PANTA RHEI
The Structure of the Model PANTA RHEI
global model demographic

GINFORS model for Germany
economy transport dwelling
material Energy land-use
PANTA RHEI

Model PANTA RHEI
² Forecasts and policy simulations:

Interdependent calculation of economic, social and
environmental development allows for:
ð Business as usual or other forecasts
ð Policy simulations:
Change of model parameters can be traced back to a
single or a few changes of policy parameters
ð Conducted policy simulations:
§ Energy and air emission taxes
§ Ecological tax reform
§ Policy measures to reduce transport (incl. road pricing)
§ Policy measures to reduce land-use
§ Support of renewable energy
§ Material input tax
§ Induced innovation
§ Information and planning policy

2 Baseline Forecast
2.1 Assumptions
² Economic and social policy:

ð state of 2004,
ð no labour market reforms
² Environmental policy:
ð climate policy instruments are calibrated to meet the
Kyoto target
ð no business as usual

Baseline Forecast
2.2 Results
² Economy:
ð GDP: slow recovery
baseline: growth rates of real GDP in %

3,0
2,0
1,0
0,0
1995 2000 2005 2010 2015 2020
-1,0
baseline

Baseline Forecast
ð unemployment: in the long run economic structural

change and demographic change will help
baseline: unemployment ratios (ILO concept)

10,0
9,0
8,0
7,0
6,0
5,0
4,0
3,0
2,0
1,0
0,0
1995 2000 2005 2010 2015 2020
baseline

Baseline Forecast
ð net lending of the government:

Maastricht criterion will remain a problem till 2010
baseline: net lending of the government

in billion € and in percent of nominal GDP
2005 2010 2015 2020
0 0,0
-20 -1,0
-40 -2,0
-60 -3,0
-80 -4,0
-100 -5,0
net lending of the government (left scale)
net lending of the government in percent of nominal GDP (right scale)

Baseline Forecast
² Environment:
ð CO2 emissions: Kyoto target will be met
baseline: CO2 Emissions in mill. tons and target

1000
900
800
700
1995 2000 2005 2010 2015 2020
CO2-Emissions Kyoto target

Baseline Forecast
ð land use: the target will not be reached
baseline: change of land use for settlement and traffic

in hectares per day and target
140
120
100
80
60
40
20
0
1995 2000 2005 2010 2015 2020
land use for settlement and traffic
target of the German sustainability council

Baseline Forecast
ð total material requirement: fossil fuels are falling, but

imported metals are rising stronger
baseline: total material requirement in mill. tons
8000 others
erosion (imports)
7000
biomass (imports)
6000
metals (imports)
5000
fossil fuels (imports)
4000 erosion (domestic)
3000 excavation & dredging (domestic)
2000 biomass (domestic)
construction minerals (domestic)

1000
industrial minerals (domestic)
0
1991 2000 2010 2020 fossil fuels (domestic)

Baseline Forecast
ð total material productivity: the target will not be

reached
Baseline: Total Material Productivity, Index 1993=100 and Target
250,0
200,0
150,0
100,0
50,0
0,0
1990
1995
2000
2005
2010
2015
2020
material productivity, baseline target

3 Program for Growth of Material Productivity:
The “Aachen” Scenario
² Research work induced and sponsored by the
Aachen foundation “Kathy Beys”
² Assumptions, based on consulting experience of
A. D. Little and others:
ð 20 % reduction of material and energy costs of
manufacturing sectors, construction and public
administration in 11 years (linearly from 2005 to
2016),
ð savings of material inputs induce for one year
additional consulting and capital costs of the same
magnitude,
ð in the case of energy inputs the induced costs equal
the savings of six years,
ð one third of the additional costs are consulting costs,
two third are capital costs.
Program for Growth of Material Productivity: The “Aachen” Scenario
² Results:
ð direct effects:
§ winners: receivers of material inputs
- domestic firms
§ losers: deliverers of material inputs
- domestic firms
- firms from foreign countries
è rising GDP (rebound effect!)
ð indirect effects:
§ rising productivity
§ falling prices
§ rising production, income and employment

ð GDP: growth rate expands by 1 point per year
GDP growth rates in the baseline

and in the “Aachen” scenario
4
0
2005 2010 2015 2020
baseline "Aachen" scenario

ð employment: rises up to 1 million persons in 2016
“Aachen” scenario: effects on employment

difference from the baseline in 1000
1.000
800
600
400
200
0
2005 2010 2015 2020
employment effects

ð net lending of the government: zero in 2014, plus 60

billion € in 2020
net lending/borrowing of the government in the baseline

and in the „Aachen” scenario in billion €
100
50
0
2005 2010 2015 2020
-50
-100

ð material productivity: growth rate during the program

about 2.9% per year
250,0
200,0
150,0
100,0
50,0
0,0
1990 1995 2000 2005 2010 2015 2020
material productivity, baseline target "Aachen" Scenario

ð total material requirement: rise of material productivity

is just strong enough to disconnect economic total
material requirement from economic growth
total material requirement in the baseline

and in the „Aachen“ scenario in mill. tons
7.000
6.500
6.000
5.500
2005 2010 2015 2020

4 Global Model GINFORS
² EU-funded project MOSUS (www.mosus.net)

National models similar but simpler than
PANTA RHEI linked via monetary trade flows
for 25 goods and services
ð Importance of imported material flows
ð Material flows are explicitly calculated
for 6 materials and all countries/regions
ð Evaluate policy measures in EU (OECD)
§ in the economic, social and environmental dimension
§ in a global context
§ use country specific data for the extracting countries
§ catch effects in countries outside Europe (leakage)
ð Quantification of resource use indicators

Global Model GINFORS
² Data sources
model type data sources global coverage

OECD, 40 countries,
trade
UN 2 regions (OPEC, ROW),
OECD,
country models
input-output Eurostat, 24 countries

national sources
macro OECD/IMF 53 countries
energy IEA 53 countries
material SERI 53 countries
land-use IIASA 20-30 countries

Global Model GINFORS
² Country Coverage
country models OPEC ex. Indonesia ROW

5 MFA requirements from a modeling perspective
² Branch data according to MIOT is needed

ð to forecast material flow development
ð to evaluate policy measures to reduce material flows
² If monetary branches are not homogeneous in a

physical sense, additional information is needed
² OECD data (bilateral trade data, MIOT) is very suitable

for international analysis and should be extended to
top extracting countries

Lutz MFA Berlin

Uploaded by

Document Information

Original Description:

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Lutz MFA Berlin

Uploaded by

Copyright:

Available Formats

OECD Workshop on Material Flow Indicators

and related Measurement Tools

GWS mbH (Institute for Economic Structures Research)

1. Model PANTA RHEI: An Information Tool for the

3. Program for Growth of Material Productivity:

4. Global Model GINFORS

5. MFA requirements from a modeling perspective

2005 GWS mbH Page 2

2005 GWS mbH Page 3

² Database from 1991 to 2000:

2005 GWS mbH Page 4

The Structure of the Model PANTA RHEI

global model demographic

economy transport dwelling

material Energy land-use

2005 GWS mbH Page 5

² Forecasts and policy simulations:

2005 GWS mbH Page 6

² Economic and social policy:

2005 GWS mbH Page 7

baseline: growth rates of real GDP in %

2005 GWS mbH Page 8

ð unemployment: in the long run economic structural

baseline: unemployment ratios (ILO concept)

2005 GWS mbH Page 9

ð net lending of the government:

baseline: net lending of the government

2005 GWS mbH Page 10

baseline: CO2 Emissions in mill. tons and target

CO2-Emissions Kyoto target

2005 GWS mbH Page 11

ð land use: the target will not be reached

baseline: change of land use for settlement and traffic

2005 GWS mbH Page 12

ð total material requirement: fossil fuels are falling, but

baseline: total material requirement in mill. tons

3000 excavation & dredging (domestic)

2000 biomass (domestic)

construction minerals (domestic)

2005 GWS mbH Page 13

ð total material productivity: the target will not be

Baseline: Total Material Productivity, Index 1993=100 and Target

2005 GWS mbH Page 14

2005 GWS mbH Page 16

ð GDP: growth rate expands by 1 point per year

GDP growth rates in the baseline

2005 GWS mbH Page 17

ð employment: rises up to 1 million persons in 2016

“Aachen” scenario: effects on employment

2005 GWS mbH Page 18

ð net lending of the government: zero in 2014, plus 60

net lending/borrowing of the government in the baseline

2005 GWS mbH Page 19

ð material productivity: growth rate during the program

material productivity, baseline target "Aachen" Scenario

2005 GWS mbH Page 20

ð total material requirement: rise of material productivity

total material requirement in the baseline

2005 GWS mbH Page 21

² EU-funded project MOSUS (www.mosus.net)

2005 GWS mbH Page 22

model type data sources global coverage

input-output Eurostat, 24 countries