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ET2050 European Territorial Scenarios modelled by SASI

ET2050 European Territorial Scenarios modelled by SASI. Klaus Spiekermann and Michael Wegener ET2050 Project Group Meeting Barcelona, 25-27 September 2013. The SASI Model. SASI. The SASI model. There are three methods to model the impacts of policies on regional economic development:

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ET2050 European Territorial Scenarios modelled by SASI

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  1. ET2050European Territorial Scenariosmodelled by SASI Klaus Spiekermann and Michael Wegener ET2050 Project Group Meeting Barcelona, 25-27 September 2013

  2. The SASI Model

  3. SASI The SASI model There are three methods to model the impacts of policies on regional economicdevelopment: • Multiplier effects of infrastructure invest­ ments (Aschauer, 1993) • Regional production functions incorporating infrastructure as production factor (Jochimsen, 1966; Biehl, 1986, 1991) • Interregional trade flows as a function of interregional transport costs (Peschel, 1981; Bröcker, 1995) andinput­output linkages (Echenique, 1990) and economies of scale (Krugman, Venables,1995)

  4. The SASI model The SASI model is a recursive­-dynamicsimulation model of socio­economic development of regions in Europe under assumptions about • European economic development and external net migration, • European transport policies (TEN-T), • regional subsidies (ERDF, EAFRD, ESF, CF). The SASI model differs from other regional economic models by modelling not only production (the demand side of regional labour markets) but also population (the supply side of labour markets) and travel and freight transport flows.

  5. Regional production function In state-­of-­the-­art models of regional development based on production functions the classic production factors land, labour and capital are replaced by location factors, such as: • Economic structure • Productivity • Accessibility • Labour supply • Services • Settlement structure • Research and development • Education • Quality of life

  6. Land Accessibility Production Others Labour Capital Destinations in regionj Travel cost between regions i andj Accessibility of regioni Regional production function Extended production function: where Ai is potential accessibility:

  7. Regional net migration function Net migration function: where • qi(t–3) is GDP per capita of region i • q(t-3) is average European GDP per capita • vi(t–3) is quality of life of region i • v(t-3) is average European quality of life … all lagged by three years Net migration of region i in year t Attractiveness as place to work Attractiveness as place to live

  8. Transfer policies Transport policies Production function Migration function Accessibility Population GDP Income Unemploy­ ment Labour force Employment SASI model

  9. Regions Regions SASI model

  10. The SASI Model in ET2050

  11. Model developments for ET2050 • Conversion of the region system to the 2006 NUTS­3 classification • Extension of forecasting horizon from 2030 to 2050 • Extension of study area to the ESPON Space (EU27+4) • Development of a simple model of regional and long-­distance travel and freight transport • Calculation of environmental indicators as energy consumption and CO2 emissions of transport

  12. Model integration in ET2050 • Adjustment of exogenous assumptions to those of MASST and MULTIPOLES. • Translation of the NUTS-2 typology of regions pro-posed in the MASST to NUTS-3 regions. • Adoption of the exploratory scenarios A, B and C defined for MASST and MULTIPOLES. • Provision of NUTS-3 model results for the three exploratory scenarios to METRONAMICA.

  13. Questions answered How will different spatial orientations of European • infrastructure investments (TEN­-T) • regional subsidies (ERDF, EAFRD, ESF, CF) affect • regional economic development, • regional population/migration, • interregional travel and freight flows, • territorial cohesion and polycentricity, • energy consumption/CO2 emissions?

  14. Baseline Scenario

  15. Baseline Scenario The Baseline Scenario for 2030 and 2050 is based on BAU assumptions about • European economic development, • European net migration, • European regional subsidies, • European transport policies. and produces forecasts of: • regional economic development, • regional population/migration, • interregional travel and goods flows, • energy consumption/CO2 emissions, • territorial cohesion and polycentricity.

  16. Baseline Scenario Population maximum in 2035: Baseline Scenario assumption: population 1981-2051

  17. Baseline Scenario Immigration constrained: Baseline Scenario assumption: EU27 net migration per year (1,000) 1981-2051

  18. Baseline Scenario "Sluggish recovery": Baseline Scenario assumption: GDP (Euro of 2010) 1981-2051

  19. Baseline Scenario Subsidies grow with EU GDP: Baseline Scenario assumption: Structural Funds (billion Euro of 2010) 1981-2051

  20. Baseline Scenario Subsidies mainly to poorer regions: Baseline Scenario assumption: Structural Funds as % of GDP v. GDP per capita 1981-2051

  21. Baseline Scenario Rising energy prices: Baseline Scenario assumption: Oil price per barrel (Euro of 2010) 1981-2051

  22. Baseline Scenario Growing transport energy efficiency: Baseline Scenario assumption: MJ per pkm/tkm 1981-2051

  23. Baseline Scenario Cleaner vehicles and more renewable energy: Baseline scenario assumption: CO2 emission of transport per MJ 1981-2051

  24. Exploratory Scenarios

  25. Exploratory Scenarios The definition of the SASI exploratory scenarios is based on the same region typology as used by the MASST and MULTIPOLES models but translated into NUTS-3 regions: • In the MEGAs Scenario A large European metro-politan areas are promoted in the interest of com-petitiveness and economic growth. • In the Cities Scenario B major European cities are promoted in order to strengthen the balanced poly-centric spatial structure of the European territory. • In the Regions Scenario C rural and peripheral regions are promoted to advance territorial cohesion between affluent and economically lagging regions.

  26. Exploratory Scenarios In the SASI exploratory scenarios A, B and C the assumptions about total European development and European net migration remain the same as in the Baseline Scenario. However, the exploratory scenarios differ in their assumptions about • the allocation of EU Structural Funds subsidies (see next slide), • European transport policies (see three following slides).

  27. Exploratory scenarios: Structural Funds A (MEGAs) B (Cities) C (Regions) 1.0 % 0.5 0.25% of total EU Structural Funds Baseline Scenario The

  28. Scenario A: Network improvements (if necessary) MEGA Connections between MEGAs not more than 500 km apart. Minimum speed: Road: 90 km/h Rail: 200 km/h

  29. Scenario B: Network improvements (if necessary) City Baseline Scenario Connections between cities not more than 300 km apart. Minimum speed: Road: 80 km/h Rail: 160 km/h

  30. Scenario C: Network improvements (if necessary) Region Baseline Scenario Connections between regions not more than 200 km apart. Minimum speed: Road: 65 km/h Rail: 80 km/h

  31. Exploratory scenario results

  32. Baseline Scenario: Accessibility travel road/rail 2036 Baseline Scenario: Accessibility travel road/rail 1981 Baseline Scenario: Accessibility travel road/rail 1986 Baseline Scenario: Accessibility travel road/rail 1991 Baseline Scenario: Accessibility travel road/rail 1996 Baseline Scenario: Accessibility travel road/rail 2001 Baseline Scenario: Accessibility travel road/rail 2006 Baseline Scenario: Accessibility travel road/rail 2011 Baseline Scenario: Accessibility travel road/rail 2016 Baseline Scenario: Accessibility travel road/rail 2021 Baseline Scenario: Accessibility travel road/rail 2026 Baseline Scenario: Accessibility travel road/rail 2031 Baseline Scenario: Accessibility travel road/rail 2041 Baseline Scenario: Accessibility travel road/rail 2046 Baseline Scenario: Accessibility travel road/rail 2051

  33. Baseline Scenario: GDP per capita 2051 GDÜ per capita (1000 € of 2010)

  34. Scenario A: GDP per capita Difference to Baseline Scenario 2051 Difference to Baseline Scenario (%) 2051

  35. Scenario B: GDP per capita Difference to Baseline Scenario 2051 Difference to Baseline Scenario (%) 2051

  36. Scenario C: GDP per capita Difference to Baseline Scenario 2051 Difference to Baseline Scenario (%) 2051

  37. Baseline Scenario: Population density 2051 Population density (pop/sqkm) Results (2)

  38. Scenario A: Population Difference to Baseline Scenario 2051 Difference to Baseline Scenario (%) 2051

  39. Scenario B: Population Difference to Baseline Scenario 2051 Difference to Baseline Scenario (%) 2051

  40. Scenario C: Population Difference to Baseline Scenario 2051 Difference to Baseline Scenario (%) 2051

  41. Baseline Scenario: CO2 emission 2051 CO2 emission (t/capita/year)

  42. Scenario variants

  43. Scenario variants In addition, the Baseline Scenario and the exploratory scenarios A, B and C are combined with alternative framework conditions: Economic decline. Globalisation and growth of emerging economies will lead to stagnation and almost decline of the European economy Technology advance. New innovations in pro- duction and transport technology will result in significant growth in labour and transport productivity. Energy/climate. Rising energy costs and/or greenhouse gas emission taxes will lead to strong increases of production and transport costs.

  44. Scenario variants The combination of the exploratoy scenarios and the variants leads to nine additional scenarios:

  45. Scenario variants Economic decline It is assumed that in Scenarios A1, B1 and C1 total GDP of EU27+4 will grow by only 0.62 per cent p.a. on average between 2011 and 2051 compared to 1.50 per cent in the Baseline. As in the Baseline Scenario, it is assumed that growth rates will gradually decrease after 2030.

  46. Scenario variants Technology advance It is assumed that in Scenarios A2, B2 and C2 labour productivity, i.e. GDP per worker, will grow by 1.94 per cent p.a. on average between 2013 and 2051 compared to 0.94 per cent in the Baseline Scenario. It is assumed that productivity will gradually con-verge between countries towards 2051. It is assumed that energy efficiency of transport will increase by 0.75 % per cent p.a. compared to 0.45 % per cent in the other scenarios.

  47. Scenario variants Energy/climate It assumed that in Scenarios A3, B3 and C3 fuel costs of road vehicles will increase by 5 % per cent on average between 2013 and 2051 compared to 1.5 per cent in the Baseline Scenario. This will result in an average fuel price of 10.20 Euro of 2010 in 2051 compared with 3.00 Euro in the Baseline Scenario. Energy cost of rail transport is assumed to increase by 2 per cent p.a. between 2013 and 2051.

  48. Scenario variants Scenario variant assumtions: summary 1 withour generative effects

  49. Scenario variants results

  50. Scenario comparison Transport networks & travel cost: Accessibility of travel by road/rail 1981-2051

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