Modelling Transport Energy Demand and Emissions:

Development of A Global Passenger Transport Model

Coupled with Computable General Equilibrium Model

Runsen Zhang

National Institute for Environmental Studies (NIES), Japan

21st June, 2017

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The 40th IAEE International Conference

Background

• Transport-related emissions

• With levels of urbanization and motorization increasing rapidly worldwide,carbon emitted in the transport sector, especially passenger traffic, isprojected to keep growing.

• Decarbonization of transport sector

• Because the continuing growth in traffic activities could outweigh allmitigation measures unless transport emissions can be stronglydecoupled from GDP growth, decarbonizing the transport sector will bemore challenging than for other sectors.

• Long-term emissions pathways

• The key factors influencing global passenger transport, including travelmode and technological details, need to be taken into account to estimatelong-term transport-related emission pathways.

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Problem

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The barrier of linkage of global integrated assessment modeland transport model:

• IAMs such as Asia-Pacific Integrated Model/Computable GeneralEquilibrium (AIM/CGE) represents transport at a highly aggregatedlevel, but technological details and behavioral determinants such astravel cost, travel time, modal split, and modal preference are notincorporated.

• Transport model fails to capture the dynamic feedback and interactionbetween transport sector and economic system.

Coupled CGE-Transport model ?

IAM

Transport model

Objectives

• To demonstrate how to couple a transport model within a CGE model;

• To provide detailed transport representation for a global CGE model;

• To create a better understanding of the interactive mechanismbetween the transport sector, energy, and macro-economic system.

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Transport sector

Macro-economy

Energy

AIM/CGE

AIM/Transport

Methodology

• A global passenger transport model, AIM/Transport, was developed to analyzethe transport sector representation by incorporating travelers’ mode choiceand technological details, and then estimate the resulting energy consumptionand emissions

• AIM/Transport was coupled with AIM/CGE, which is a one-year intervalrecursive-type, dynamic, general equilibrium model that covers 17 regions ofthe world.

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Code Region Code Region Code Region

BRA Brazil TUR Turkey XME Middle East

CAN Canada USA United States XNF North Africa

CHN China XAF Rest of Africa XOC Oceania

CIS Former Soviet Union XE25 EU25 XSA Rest of Asia

IND India XER Rest of Europe XSE Southeast Asia

JPN Japan XLM Rest of South America

Regional codes

Regions for AIM/Transport model

Model structure

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AIM/CGE

ENETRS=ENECGE?

Yes

End

No

AIM/Transport

GDP Population

Energy price Carbon price

Travel demand Energy

Capital cost

Structure of AIM/Transport Iterative algorithm

Scenario setting

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• GDP

• Population

Socioeconomic dimensions (SSP2)

Climate policy dimension• No climate mitigation efforts (BaU)

• “Two-degree target”: a carbon price is imposed approximately for achieving450 ppm CO2 equivalent concentration (2.7 W/m2) in 2100 (Mitigation)

Convergence

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𝑀𝐴𝑃𝐸𝑟,𝑓 = 1

𝑛𝑦∈𝑌 𝐸𝑁𝐸𝑇𝑅𝑆𝑟 ,𝑦 ,𝑓−𝐸𝑁𝐸𝐶𝐺𝐸𝑟 ,𝑦 ,𝑓

𝐸𝑁𝐸𝐶𝐺𝐸𝑟 ,𝑦 ,𝑓

Regional mean MAPE (%)

Deceasing discrepancy (MAPE)

Mean Absolute Percentage Errors:

Iteration Coal Oil Electricity Gas Biomass

1 12.79 2.35 3.69 2.55 15.12

2 0.80 0.62 3.12 3.01 15.05

3 0.62 0.66 3.14 3.63 4.99

4 0.50 0.39 2.06 2.33 6.84

5 0.30 0.46 2.13 2.61 3.18

6 0.26 0.24 1.27 1.51 4.34

7 0.12 0.32 1.44 1.85 2.08

8 0.10 0.14 0.75 0.94 3.07

9 0.05 0.22 0.97 1.34 1.43

10 0.03 0.07 0.45 0.61 2.45

11 0.02 0.15 0.65 0.96 1.11

12 0.01 0.05 0.29 0.42 1.87

13 0.01 0.09 0.40 0.63 0.91

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Model integration

Before coupling

After coupling

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Updated transport representation

• The feedback from AIM/Transport improves the transport representation in AIM/CGE.

• The global passenger travel demand and transport-related energy consumption in theCGE model were modified with the updated parameters estimated based on thefeedback from AIM/Transport.

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BaU scenario: travel demand

• It is evident that the United States, European Union, India, China, Southeast Asia, and Rest of Africa account for large proportions of passenger travel demand in the world.

• The annual growth rates of travel demand from 2005 to 2100 in developed regions displayed stable tendencies, whereas developing regions constantly increased over the coming decades.

BaU scenario: modal split

• Changes in mode share of passenger transport were characterized as the shift fromthe mass transit modes (bus and railway) toward personalized modes (car).

• Because car ownership has reached the high levels, developed regions had relativelystable modal structures.

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BaU scenario: modal split

• Modal shares in developed regions, which had a higher GDP per capita, wererelatively unchanged, except for slight increases in the share of international aviation.In contrast, modal shares changed dramatically in developing regions where the GDPper capita was low.

• The major impacts of economic development on changes in the modal structure indeveloping regions can be summarized as increased person trips by car and a declinein bus usage.

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BaU scenario: energy and emissions

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• Although oil has been replaced by electricity and biomass to some extent, it stillplays a dominant role in transport energy consumption.

• The contribution of travel modes on emissions proved that cars were the majoremission source, followed by aviation.

Mitigation scenario: impacts of carbon tax

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• Travelers tended to cut down on trips with the higher transport cost caused by thecarbon tax and, therefore, the global passenger travel demand decreased by 4.38% in2010.

• A carbon tax policy would motivate travelers to choose electrified transport andtransport powered by biofuel for personal trips instead of travel modes that relied onoil.

• The goal of GHG emission reduction could be achieved by implementing a carbon taxpolicy, due to the shift from the use of fossil fuels to electricity and biofuel in thetransport sector.

Mitigation scenario: mitigation cost metrics

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• The long-term economic costs and benefits of mitigating climate change over the longterm can be estimated using a coupled CGE-Transport model.

• Without travel mode and technological details, AIM/CGE tends to underestimate thecontribution of the transport sector to the overall mitigation cost.

• The transport sector makes an important contribution to global GHG emissions andthe de-carbonization of the transport sector deserves more attention.

Discussions

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• The coupled CGE-Transport model can give balanced consideration toboth the technological details of transport and its economic impact.

• The key finding was that the mitigation cost could be modified withdetailed information regarding the transport sector. Theunderestimation of GDP and welfare loss by AIM/CGE without detailedtransport information indicates that appropriate model representationis needed in the transport sector.

• Such treatment enables a broader sense of policy analysis, which mightdecrease macroeconomic loss (e.g., transport specific policies). Not onlydoes the transport sector have considerable potential for emissionreduction, but a low-carbon transport policy could also help to limit theeconomic losses caused by climate change mitigation.

Conclusions

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• Methodology• The numerical computation proved the model feasibility and offers a

methodology of how to conduct a model integration between AIM/CGEand AIM/Transport.

• Global transport energy demand pathways• The travel demand, energy, and emissions differ among regions and

transport modes. Cars and oil still play dominant roles in energyconsumption and GHG emissions. A carbon tax would have a significantinfluence on the technology and fuel choice, which helps reduce emissionsand mitigate global warming.

• Interplay between the transport sector and macro-economy• Changes in mitigation costs with the feedback from AIM/Transport

revealed that the importance of the transport sector was underestimatedby AIM/CGE. Since the contribution of transport sector to global climatechange mitigation, the de-carbonization of the transport sector deservesfurther investigation.

Roadmap for future works

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1.0

• Coupling/Feedbacks

• Interaction between transport sector and economic system

• Transport policy assessment

2.0• Endogenous congestion

• Transport infrastructure (road, high-speed railway, etc.)

3.0• Freight

• 1.5 degree scenario

Asia-Pacific Integrated Modelhttp://www-iam.nies.go.jp/aim/index.html

Runsen ZHANG

zhang.runsen@nies.go.jp