Dr. Christian Lutz Institute of Economic Structures Research (GWS)

1. International Wuppertal Colloquium on „Sustainable Growth, Ressource Productivity and Sustainable Industrial Policy“, September 17-19, 2008 at the University of Wuppertal Global resource use in a business as usual world until 2030. Updated results from the GINFORS modelby Dr. Christian Lutz Institute of Economic Structures Research (GWS) Gesellschaft für Wirtschaftliche Strukturforschung mbHHeinrichstr. 30 ° D – 49080 Osnabrück, Germany Tel.: + 49 (541) 40933-12 ° Fax: + 49 (541) 40933-11Email: lutz @ gws-os.de ° Internet: www.gws-os.de

2. CONTENTS • Introduction • GINFORS: Data sources and coverage • GINFORS: Model structure • Baseline results of the MOSUS projects • Ongoing work in the petrE project

3. 1. Introduction: • GINFORS model developed and applied in different projects • MOSUS (EU FP 5 project), 2002-2006(www.mosus.net) • AGF petrE project, 2006-2009(www.petre.org.uk) • INDI-LINK (EU FP 6 project), 2006-2009(www.indi-link.net) • Economic criteria for post-2012 regimes, 2006-2007 (www.bmwi.de) • Literature: • Model description: Lutz et al. 2009; Meyer, Lutz 2007, Meyer et al. 2005 • MOSUS results: Giljum et al. 2008

4. 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

5. Introduction: Oil price and GDP • GINFORS: • Global multi-country approach • Multi-sector approach • Disaggregated bilateral international trade • Endogenous explanation of economic development and its linkage with the environment • 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

6. 2. GINFORS: Data Sources and Coverage • Data sources

7. GINFORS: Data Sources and Coverage • Country Coverage country models OPEC ex. Indonesia ROW

8. GINFORS: Data Sources and Coverage • Material database: www.materialflows.net

9. Global database on resource extraction www.materialflows.net 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

10. 3. GINFORS: Model Structure • Wheel of GINFORS: General architecture

11. GINFORS: Model Structure • Country Model

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

13. 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 • 1994 - 2004

14. GINFORS: Model Structure • Global coverage: e.g. fossil fuels

15. 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 • CO2 emissions • Constant relation to Total Primary Energy Supply (TPES)

16. GINFORS: Model Structure • Material-Input-Models

17. 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

18. 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

19. 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

20. 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

21. 6 5 4 3 Percent 2 1 0 UK US Italy India China Spain EU-25 EU-15 Japan Poland Russia Turkey France ACC-10 Germany 4. Baseline results of the MOSUS project • See Giljum et al. (2008) • Annual average growth of real GDP per capita 2005-2020 in the baseline (business as usual) scenario.

22. MOSUS results Total Primary Energy Supply (TPES) per capita (Baseline in 2020)

23. MOSUS results Used domestic extraction in the EU-25, (Baseline)

24. MOSUS results Worldwide used extraction, 1980-2020 (Baseline)

25. MOSUS results Shares of country groups in used extraction, 1995-2020 (Baseline)

26. MOSUS results EU-25: Material Intensity by Country(Baseline)

27. 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