gws Global resource use in a business as usual world until Updated results from the GINFORS model by Gesellschaft für Wirtschaftliche Strukturforschung mbH Heinrichstr. 30 ° D – Osnabrück, Germany Tel.: + 49 (541) ° Fax: + 49 (541) gws-os.de ° Internet: International Wuppertal Colloquium on „Sustainable Growth, Ressource Productivity and Sustainable Industrial Policy“, September 17-19, 2008 at the University of Wuppertal Dr. Christian Lutz Institute of Economic Structures Research (GWS)

 2008 GWS mbH Page 2 gws 1. Introduction CONTENTS 2. GINFORS: Data sources and coverage 3. GINFORS: Model structure 4. Baseline results of the MOSUS projects 5. Ongoing work in the petrE project

 2008 GWS mbH Page 3 gws 1.Introduction:  GINFORS model developed and applied in different projects  MOSUS (EU FP 5 project), (  AGF petrE project, (  INDI-LINK (EU FP 6 project), (  Economic criteria for post-2012 regimes, (  Literature:  Model description: Lutz et al. 2009; Meyer, Lutz 2007, Meyer et al  MOSUS results: Giljum et al. 2008

 2008 GWS mbH Page 4 gws Introduction  Targets of the MOSUS project Identification of policy strategies for a sustainable development in Europe considering the interrelations of:  resource and land use, energy consumption,  economic development  and fundamental social indicators  Targets of petrE, WP 3 To identify, using the two EU-wide European macro-econometric models (E3ME from Cambridge Econometrics and GINFORS) projecting to 2020, what might be the impacts on…  labour and resource productivity  resource use, employment and economic output  the energy and environmental impacts of major ETRs in the UK, Germany and the EU and  to identify reasons for any differences in the models’ projections

 2008 GWS mbH Page 5 gws Introduction: Oil price and GDP  GINFORS: (1) Global multi-country approach (2) Multi-sector approach (3) Disaggregated bilateral international trade (4) Endogenous explanation of economic development and its linkage with the environment (5) Agents behave under conditions of bounded rationality: econometrically estimated parameters  Business as usual: Socio-economic and economic-environmental relations of the past will continue in the future  Raw material extraction data linked to socio-economic drivers

 2008 GWS mbH Page 6 gws 2.GINFORS: Data Sources and Coverage  Data sources

 2008 GWS mbH Page 7 gws  Country Coverage GINFORS: Data Sources and Coverage country modelsOPEC ex. IndonesiaROW

 2008 GWS mbH Page 8 gws GINFORS: Data Sources and Coverage  Material database:

 2008 GWS mbH Page 9 gws Global database on resource extraction Online portal for material flow data Data sets on resource extraction for 188 countries Time series 1980 – 2005 Free download of 12 aggregated categories GINFORS: Data Sources and Coverage

 2008 GWS mbH Page 10 gws 3.GINFORS: Model Structure  Wheel of GINFORS: General architecture

 2008 GWS mbH Page 11 gws GINFORS: Model Structure  Country Model

 2008 GWS mbH Page 12 gws GINFORS: Model Structure  General architecture Bilateral multisector trade model (25 sectors + services) input-output models - final demand - intermediate demand - primary inputs macro models - balance of payment - SNA totals - budget of the government & private sector - labour market energy-emission models - final consumption - transformation - primary energy supply - emissions material models Bilateral multisector trade model (25 sectors + services) export demand import prices import demand export prices land-use models

 2008 GWS mbH Page 13 gws GINFORS: Model Structure  Trade model:  Export of good i in country k explained by:  Share of country k in the imports of good i in all other countries  Imports of good i in all other countries  Import price of good i explained by:  Weighted average of the export for good i of all countries  Weights: Trade shares  Shares are automatically estimated for  price dependency  time trends 

 2008 GWS mbH Page 14 gws GINFORS: Model Structure  Global coverage: e.g. fossil fuels

 2008 GWS mbH Page 15 gws GINFORS: Model Structure  Energy-Emission-Models  Total final consumption (TFC) of industries and households explained by  Industry production  Relative prices  Trends  Shares of energy carriers for electricity production, services, residential explained by  Relative prices  Trends  CO 2 emissions  Constant relation to Total Primary Energy Supply (TPES)

 2008 GWS mbH Page 16 gws GINFORS: Model Structure  Material-Input-Models

 2008 GWS mbH Page 17 gws GINFORS: Model structure  Material-Input-Models (MOSUS)  National raw material extraction data aggregated: from more than 200 categories into 6 groups  Explanatory parameters for the six material categories in the material input models  Decoupling factors: representing historic increase in resource productivity

 2008 GWS mbH Page 18 gws GINFORS: Model structure  Material-Input-Models in petrE (except energy)  8 raw material groups:  Metal ores: iron ore – non-ferrous metals:  Biomass: agricultural products – forestry products  Raw material extraction linked to the second stage of production (for countries with IO models): Monetary IO coefficients  Intermediate input of agriculture/forestry/fishing to food  Intermediate input of agriculture/forestry/fishing to wood  Intermediate input of mining and quarrying to iron and steel (iron ore)  Intermediate input of mining and quarrying to non-ferrous metals  etc.  more realistic drivers

 2008 GWS mbH Page 19 gws GINFORS: Model structure  Raw material prices in petrE  Exogeneous world market prices (HWWI database)  Raw material prices define prices of corresponding IO coefficients (see above):  World market price of iron ore drives intermediate input of mining and quarrying to iron and steel etc.  Price changes fully translate into the economic IO model  Direct (iron and steel) and indirect (cars etc.) price effects  Possibility to introduce material input taxes  Price elasticities of demand from detailed German studies: < 0.1 for most cases; i.e. doubling of raw material prices will decrease raw material input by less than 10%  Effectiveness of price instruments (e.g. material input taxes) limited  World market prices can explode in case of supply shortages

 2008 GWS mbH Page 20 gws GINFORS: Model Structure  Model assumptions:  Biomass and other mining and quarrying: domestic extraction  Metals: Extracting countries deliver global demand, no bilateral relations due to missing data:  Extraction data available (materialflows.net)  Consumption data related to industries/households not available for most important consuming countries  Bilateral trade relations still missing  EU FP6 EXIOPOL project will deliver additional detail (130 sectors / 42 countries or regions) until 2010  Material balances (as IEA energy balances) needed for all important extracting and consuming countries

 2008 GWS mbH Page 21 gws  See Giljum et al. (2008)  Annual average growth of real GDP per capita in the baseline (business as usual) scenario. 4. Baseline results of the MOSUS project China Poland Turkey ACC-10 Russia India JapanEU-25EU-15 Germany UKUS France Italy Spain Percent

 2008 GWS mbH Page 22 gws MOSUS results Total Primary Energy Supply (TPES) per capita (Baseline in 2020)

 2008 GWS mbH Page 23 gws MOSUS results Used domestic extraction in the EU-25, (Baseline)

 2008 GWS mbH Page 24 gws MOSUS results Worldwide used extraction, (Baseline)

 2008 GWS mbH Page 25 gws MOSUS results Shares of country groups in used extraction, (Baseline)

 2008 GWS mbH Page 26 gws MOSUS results EU-25: Material Intensity by Country (Baseline)

 2008 GWS mbH Page 27 gws 5. Ongoing work in the petrE project  Material extraction data: Update (historic data until 2005) from materialflows.net  Preliminary results:  Economic drivers probably underestimated in MOSUS:  GDP: Higher pressure on raw material extraction  International trade: Bigger gap between production and consumption  Price increases on the world markets since 2005:  Low price elasticities of material demand indicate only small impact on business as usual trends  Long-term impacts on GDP growth small  Business as usual trends in petrE will probably be close to shown MOSUS results