Thailand CGE Model Thailand CGE Model AI M/ Material AI M/ - - PowerPoint PPT Presentation

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Thailand CGE Model Thailand CGE Model AI M/ Material AI M/ Material

Sunil Sunil Malla Malla Wongkot Wongkot Wongsapai Wongsapai

Asian I nstitute of Technology Dec 2, 2004 APEI S Training Workshop NI ES/ Japan

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Outline Outline

• Thailand CGE model;

Thailand: At-a-glance Model characteristics in Static and dynamic

model

Data input and definition Policy simulation

• Results and Policy implications
• Modeling experiences
• Proposed Activities
• Conclusions

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Population:

63.0 Millions

GDP: 140.1 Billion US$; 8.9% growth 10.4%@2004q1-2 Status on KP:

Non-Annex I (Ratified: August 28, 2002)

Final Energy Consumption:

56,289 kTOE

Energy-Related Carbon Emissions: 48.5 million metric

tons of carbon (0.7% of world)

Energy I ntensity: 8,126 Btu/US$1995 Carbon I ntensity: 0.14 metric tons /thousand US$1995

Thailand: At a Glance [End of 2003] Thailand: At a Glance [End of 2003]

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Economic Growth, Energy Use & CO Economic Growth, Energy Use & CO2

2 Emission

Emission

• AAGR:
• TPES: 5.9%
• GDP: 6.4 %
• CO2 emission: 8.0 %
• CO2 emission from energy

use accounts for more than 70% of the total CO2 emission.

Data source: IEA, 2002

1 2 3 4 5 6 7 8 9 10 1970 1975 1980 1985 1990 1995 2000

TPES CO 2 Em ission G DP M ER

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100 150 200 250 300 350 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001

Growth index (1985=100% ) Thailand USA Japan China India

Economic growth of Thailand and other countries Economic growth of Thailand and other countries

GDP GDPPPP

PPP at 1995 prices; from ADB, NESDB, OECD

at 1995 prices; from ADB, NESDB, OECD

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100 150 200 250 300 350 400 450 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 Growth index (1985=100%)

Thailand USA Japan China India

Primary Energy Consumption (1985= 100) Primary Energy Consumption (1985= 100)

Growth rate (1985 = 100) 1997 Economic Crisis

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Static and Dynamic CGE model with nested C-D functions of production and consumer structures, 27* 27 sectors/commodities with 8 energy-related sectors (Coal, Crude oil and natural gas, petroleum (4), Electricity, Gas distribution) from 61 sectors of 1998 SAM for Thailand,

Model Characteristics Model Characteristics

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Sector Classifications Sector Classifications

27 Sectors/ commodities 27 Sectors/ commodities with 19 Non-Energy sectors

1 Agriculture, livestock, forestry, fishery 23 Construction 4 Other non-energy mining 24 Trade 5 Food, beverage and tobacco 25 Hotels & Restaurants 6 Textile, leather, and the products 26 Transport & Communications 7 Timber and wooden products 27 Services 8 Pulp, paper and printing

8 Energy sectors

9 Chemical products 2 Coal and lignite 14 Plastic and rubber products 3 Crude petrol and natural gas 15 Non-metallic mineral products 10 Gasoline 16 Metal products 11 Diesel 17 Machinery 12 Aviation fuel 18 Transport equipment 13 Fuel oil 19 Other manufacturing products 20 Electricity 22 Water 21 Gas distribution Natural gas Distribution Production e.g. Ceramics e.g.Cement

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Main data input:

• Base year 1998 forecast to 2030
• U- and V-Matrix data are disaggregated from

1998 SAM for Thailand by IFPRI,

• Population data are taken from national forecast

from 2001 to 2030,

• From 2000 to 2016, GDP growth rate are taken

from national GDP forecast data (current prices), by sector. After 2016 to 2030, 5% GDP growth rate in all sectors was assumed,

Model Characteristics Model Characteristics

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Main data input:

• Fixed Capital Formation data are estimated from

the proportion of Capital data in U-Matrix,

• All Energy data, in both consumption and prices,

are taken from 1999 MoE data,

• Based on I-O table, crude oil and Natural gas

production are aggregated into only one sector,

Model Characteristics Model Characteristics

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• 1. Reference or BAU Scenario

Based on 5% CO2 increase per year Economic and population based on country

data

• 2. Energy Efficiency (EE) Scenario

Assume 10% increase in EE investment in

energy-intensive manufacturing sectors (Cement, Basic metal, Paper sector)

• 3. Tax Scenario

Based on 4 types of taxes (K, L, C, and I) Results from the tax are limited to the year

2016 due to the data problem

Scenarios Simulations Scenarios Simulations

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Results from the model Results from the model BAU Scenario BAU Scenario

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Economic data from BAU

5 10 15 20 25 30

1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030

Trillion Baht

Investment Export Import GDP Consumption

5% Economic growth every year Based on REAL economic forecast

2016

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GDP Forecast

5 10 15 20 25 30 35

1 9 9 8 2 0 0 0 2 0 0 2 2 0 0 4 2 0 0 6 2 0 0 8 2 0 1 0 2 0 1 2 2 0 1 4 2 0 1 6 2 0 1 8 2 0 2 0 2 0 2 2 2 0 2 4 2 0 2 6 2 0 2 8 2 0 3 0

T rillio n B a h t (C u rre n t p ric e s )

National Forecast BAU Scenario

2005: 9.8% diff 2030: 8.4% diff 2015: 10.9% diff 5.89% avr. growth 5.67% avr. growth

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Difference btw. BAU forecast with Real Data

• 30
• 25
• 20
• 15
• 10
• 5

5 10

1998 1999 2000 2001 2002

P e rce n t d iffe re n c e CO2 GDP Import Export Consumption

Sensitivity Analysis Sensitivity Analysis

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Compared with the real data, CO2 emission and GDP during 1999 to 2001 is less than 5% error, while import and export data is ~ 10% error, Note; During 2029-2030, the GDP decreases while consumption is equal to zero.

BAU Scenario BAU Scenario

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Results from the model Results from the model

BAU compare with BAU compare with Energy Energy Efficency Efficency and Tax Scenario and Tax Scenario

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Change in GDP

0.000 1.000 2.000 3.000 4.000 5.000 6.000 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028

Growth rate

BAU EE

Change in Consumption

0.000 0.500 1.000 1.500 2.000 2.500 1 9 9 8 2 1 2 4 2 7 2 1 2 1 3 2 1 6 2 1 9 2 2 2 2 2 5 2 2 8

Growth rate (1998=1)

BAU EE

Change in CO2

0.000 0.500 1.000 1.500 2.000 2.500 3.000 1 9 9 8 2 1 2 4 2 7 2 1 2 1 3 2 1 6 2 1 9 2 2 2 2 2 5 2 2 8

Growth rate (1998=1)

BAU EE

BAU and EE Results BAU and EE Results

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Change in Investment

0.000 5.000 10.000 15.000 20.000 1 9 9 8 2 1 2 4 2 7 2 1 2 1 3 2 1 6 2 1 9 2 2 2 2 2 5 2 2 8

G r o w th r a te (1 9 9 8 = 1 )

BAU EE

Change in Export

0.000 1.000 2.000 3.000 4.000 5.000 6.000 1 9 9 8 2 1 2 4 2 7 2 1 2 1 3 2 1 6 2 1 9 2 2 2 2 2 5 2 2 8

Growth rate (1998=1)

BAU EE

Change in Import

0.000 1.000 2.000 3.000 4.000 5.000 6.000 7.000 1 9 9 8 2 1 2 4 2 7 2 1 2 1 3 2 1 6 2 1 9 2 2 2 2 2 5 2 2 8

Growth rate (1998=1)

BAU EE

BAU and EE Results BAU and EE Results

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EE Scenario Results under BAU and EE scenarios are almost similar The model results for consumption seems to have a problem while the other variables (GDP, import, export, investment, and CO2) have the similar trends, The reasons behind this may be :

• the restricted flexibility of elasticity of

substitution in the model, and

• The limited impacts from selected three

manufacturing sectors

• the labor is assumed as exogenous in the model

while capital is assumed as endogenous

Result Result

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0.000 0.500 1.000 1.500 2.000 2.500 3.000 1 9 9 8 2 2 2 2 4 2 6 2 8 2 1 2 1 2 2 1 4 2 1 6

Growth rate (1998=1)

BAU Tax

Change in CO2

0.000 0.200 0.400 0.600 0.800 1.000 1.200 1.400 1.600 1 9 9 8 2 2 2 2 4 2 6 2 8 2 1 2 1 2 2 1 4 2 1 6

Growth rate (1998=1)

BAU Tax

Change in Consumption

0.000 0.500 1.000 1.500 2.000 2.500 1 9 9 8 2 2 2 2 4 2 6 2 8 2 1 2 1 2 2 1 4 2 1 6

Growth rate (1998=1)

BAU Tax

BAU and Tax results BAU and Tax results

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Change in Investment

0.000 2.000 4.000 6.000 8.000 10.000 1 9 9 8 2 2 2 2 4 2 6 2 8 2 1 2 1 2 2 1 4 2 1 6

Growth rate (1998=1)

BAU Tax

Change in Export

0.000 0.500 1.000 1.500 2.000 2.500 3.000 3.500 1 9 9 8 2 2 2 2 4 2 6 2 8 2 1 2 1 2 2 1 4 2 1 6

Growth rate (1998=1)

BAU Tax

Change in Import

0.000 0.500 1.000 1.500 2.000 2.500 3.000 3.500 4.000 1 9 9 8 2 2 2 2 4 2 6 2 8 2 1 2 1 2 2 1 4 2 1 6

Growth rate (1998=1)

BAU Tax

BAU and Tax results BAU and Tax results

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Tax Scenario

Results from the tax are limited to the year 2016 due to the data problem, The values of import is lower due to the import tax (which is 1/ 4 of the total tax), The values of investment is lower due to the labor tax (which is more than 1/ 4 of the total tax), For the case of consumption, the results seems to be against the economic theory ??? (Consumption should decrease when tax is imposed…)

Result Result

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Data Limitations Data Limitations

• Fixed capital formation and labor tax data,
• Oil and gas production data from I-O are

presented in the same sector,

• All energy related conversion data (CO2/ktoe,

extraction cost, etc.) are taken from Japan database,

• Limited exposure to MPSGE
• SAM to V- and U-Matrix concept

Modeling Experiences Modeling Experiences

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Proposed Activities Proposed Activities

(1) Disaggregate the Electricity sector into 7 sub-sectors particularly for energy related environmental issues ;

Increase the share of biomass power

plant to 5% by 2010 (RPS) Thai policy

Natural gas import and infrastructure ?

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Special treatment: Electricity Generation Special treatment: Electricity Generation

1 2 3 4 5 6 7

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Proposed Activities Proposed Activities

(2) Extend the energy efficiency issues to measure the Rebound effect from the National Energy Conservation Promotion Act; (3) Carbon reduction policy

• Carbon tax (distributional effects)
• Energy tax (Btu)
• Tax revenue recycling schemes

(4) Reduce energy consumption by 10%Thai policy

• Through energy efficiency improvement
• Through innovative technologies (SDB)

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Looking Forward Looking Forward

• Understanding the linkage of top down and

bottom up models within AIM models family

• Additional works need to be carried out

particularly on Database for Thailand

• The policy options (energy security, CDM)

should be coherent with national policies

• In Thailand, local & regional pollutants are

important as well (AIM/air??)

• Working towards IPCC Scenarios in modeling
• Linking information from SDB as a future policy

that can be used in AIM family of models

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ASI AN I NSTI TUTE OF TECHNOLOGY “To develop highly qualified and committed professionals w ho w ill play a leading role in the sustainable development of the region and its integration into the global economy"

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School of Environment Resources and Development (SERD) School of Environment Resources and Development (SERD) School of Civil Engineering (SCE) School of Civil Engineering (SCE) School of Advanced Technologies (SAT) School of Advanced Technologies (SAT) School of Management (SOM) School of Management (SOM)

Asian Institute of Technology (AIT) Asian Institute of Technology (AIT)

• Agricultural Systems and Engineering
• Aquaculture and Aquatic Resources Management
• Environmental Engineering and Management
• Food Engineering and Bioprocess Technology
• Gender and Development Studies
• Natural Resources Management
• Pulp and Paper Technology
• Regional and Rural Development Planning
• Urban Environment Management
• Agricultural Systems and Engineering
• Aquaculture and Aquatic Resources Management
• Environmental Engineering and Management
• Food Engineering and Bioprocess Technology
• Gender and Development Studies
• Natural Resources Management
• Pulp and Paper Technology
• Regional and Rural Development Planning
• Urban Environment Management
• Electric Power System

Management Electric Power System Management Energy Economics and Planning Energy Economics and Planning Energy Technology Energy Technology

Interdisciplinary Interdisciplinary

Cleaner Production Cleaner Production

Areas of Specialization Areas of Specialization Fields of study Fields of study Schools Schools

ENERGY Gas-Fired Power Plant Technology Gas-Fired Power Plant Technology New Energy Management Energy Management New

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Thanks you Thanks you