The Example of the German Energiewende

Transcription

1 Modelling Employment and Nuclear Power in a CGE Model: The Example of the German Energiewende CEEM Conference Effets sur l emploi des choix dans le secteur électrique Université Paris-Dauphine 26 October 2015 Robert Beestermöller () University of Stuttgart

2 Content 1. Overview 2. The CGE model NEWAGE Modelling nuclear power Modelling (un)employment 3. Results of selected -studies 4. Summary and outlook 26 October 2015 Robert Beestermöller () / CEEM Conference

3 The Energiwende goals The German Energiewende The German Energiewende comprises long-run goals and measures in order to Reduce GHG emissions Promote renewable energies Increase energy efficiency Phase-out nuclear power until GHG emissions: -40% -55% -70% -80% to -95% Electricity consumption: -10% % Primary energy consumption: -20% % Final energy consumption: -10% % RES-share in gross final energy consumption: 18% 30% 45% 60% RES-share in gross electricity consumption: 35% 50% 65% 80% Number of electric vehicles: 1 M 6 M - - EU-wide CO 2 emissions standards for cars: 95 gco 2 /km Primary energy consumption in buildings: % Heat demand in buildings: -20% CO 2 neutral new buildings Buildings renovation rate: Double from 1 % to 2 % p.a. base year 1990 base year October 2015 Robert Beestermöller () / CEEM Conference

4 Assessing employment effects with CGE models Modelling interactions of economic agents on markets in a closed circle of income Economic activities, prices and income as variables General equilibrium conditions: Zero profits (firms) Market clearance Budget restriction (households) Neoclassical assumptions (perfect competition) can be waved in special markets e.g. labor market allowing for unemployment Modeling employment effects of energy technology investments Where does the funding come from? What are alternative uses of the funding? No forecasts, but ex-ante assessment of different policy interventions (e.g. Energiewende) within a consistent framework 26 October 2015 Robert Beestermöller () / CEEM Conference

5 Diverse gross effects complicate statements about net effect Gross effects include price effects, supply and demand effects (quantities), investment effects, foreign trade effects, substitution and income effects : Possible economic effects of phasing-out nuclear power [Fahl & Ellersdorfer, 2004] ) ) p ele = Electricity price x ele = Electricity generation p = Consumer prices w = Wages EX = Exports IM = Imports E = Employment level INV = Investments C = Consumption GDP = Gross Domestic Product What is the size of the resulting net effect regarding employment levels? Need for a methodology that covers a closed circle of income 26 October 2015 Robert Beestermöller () / CEEM Conference

6 Content 1. Overview 2. The CGE model NEWAGE Modelling nuclear power Modelling (un)employment 3. Results of selected -studies 4. Summary and outlook 26 October 2015 Robert Beestermöller () / CEEM Conference

7 NEWAGE: Concept and composition Hybrid features: Imperfect Market: o Wage curve differentiation by qualification (skilled, unskilled) o Rigid wages Electricity Generation: Technology based modeling: portfolio with 18 generation options Resources Carbon Fossil Fuel Production Aggregation Pool (Armington) Sectoral Production Exports Internat. Transport Imports Current resolution (18x18x4): 18 sectors: Coal, Natural gas, Crude oil, Petroleum, Electricity Iron & Steel, Non-ferrous metals, Non-metallic minerals, Paper, pulp & print, Chemicals, Food & Tobacco, Motor vehicles, Machinery, Rest of industry, Household Energy Demand 11 vehicle technologies + 16 buildings technologies Factor markets Production Foreign trade Buildings, Transport, Agriculture, Services 18 regions: Main data sources: GTAP8, IEA, BoUp-models Dynamics: Recursive-dynamic, , 5-year steps Technological Change: Autonomous energy efficiency index (AEEI) Savings Investments Households and Government Representative Agent Consumption Closed circle of income Tax Revenue Implicit tax system Germany, Baden- Württemberg (separate) France, Austria, Eastern EU-28, Northern EU-28, Southern EU-28, Switzerland USA, Rest of OECD Brazil, Russia, India, China, South Africa Rest of OPEC, Arabian World, Rest of the World 26 October 2015 Robert Beestermöller () / CEEM Conference

8 NEWAGE: CES Production functions Y KLEM σ KLEM Y = f (K, L, E, M) σ KLE KLE Material σ E E KL σ KL Electricity Fossils σ FE Skilled Unskilled Liquids σ LIQ σ = Substitution elasticities σ GAS σ OIL σ COL Oil CO 2 Gas CO 2 Coal CO 2 26 October 2015 Robert Beestermöller () / CEEM Conference

9 BIOMASS COAL NUCLEAR BIOMASS COAL GAS NUCLEAR SOLAR WIND GAS BIOMASS COAL NUCLEAR GAS SOLAR WIND PEAKOIL Chemicals Coal Coal Chemicals Coal Chemicals Petroleum Gas Gas Gas Agriculture Agriculture Agriculture NEWAGE: Modelling electricity generation 100% CES nesting of electricity generation technologies 90% Each technology 80% is represented as a CES 80% production function demanding KLEM inputs 70% 70% (interdependency with the rest of the economy) 60% 60% Electricity 50% generation takes place in extant and new power plants 50% 40% 30% 20% 10% 0% Electricity 100% 90% σ E 40% 30% 20% 10% 0% σ GAS E Liquids σ KLE σ LIQ 100% 90% 80% 70% 60% KLE 50% 40% 30% Fossils 20% 10% 0% σ OIL Y = f (K, L, E, M) σ FE Y KLEM Services Agriculture Transport Dwellings Construction Rest of ind. Food&Tob. Motor Material veh. σ KLEM Y = f (K, L, E, M) σ COL Manufacturing Machinery Paper&pulp NM-minerals NF-metalsKL Iron&steel Skilled Chemicals Unskilled Electricity Petroleum Gas Crude oil Coal K L Intermediates (M) Energy (E) σ KL Oil CO 2 Gas CO 2 Coal CO 2 26 October 2015 Robert Beestermöller () / CEEM Conference

10 Content 1. Overview 2. The CGE model NEWAGE Modelling nuclear power Modelling (un)employment 3. Results of selected -studies 4. Summary and outlook 26 October 2015 Robert Beestermöller () / CEEM Conference

11 Modelling (un)employment in NEWAGE 2 degrees of labor qualification: skilled and unskilled labor Corresponding wage functions: Unskilled labor: Real wage remains constant (minimum wage) Skilled labor: Wage curve following Blanchflower & Oswald (1995) ln w real = β lnur+ Unemployment through wage rigidities: Unemployment related to a wage curve: 26 October 2015 Robert Beestermöller () / CEEM Conference

12 Content 1. Overview 2. The CGE model NEWAGE Modelling nuclear power Modelling (un)employment 3. Results of selected -studies 4. Summary and outlook 26 October 2015 Robert Beestermöller () / CEEM Conference

13 Selected studies Küster, R. (2009): Climate protection, macro-economy and employment Analysis of the German and European climate policy strategies using a CGE model, Dissertation, Mensch und Buch Verlag, Berlin /ZEW (2010): Energy market developments until 2030 The energy forecast 2009, a Study for the German Federal Ministry for Economic Affairs and Technology (BMWi) (2011): Effects of changing operational lives of German nuclear power plants scenario analysis until 2035, the Rational Use of Energy (), University of Stuttgart, Working paper No. 10, June 2011 Beestermöller, R. (2012), Net employment effects of renewable energy expansion in Germany, Presentation to the Symposium EnergieCampus, Stiftung Energie & Klimaschutz Baden-Württemberg, Stuttgart, November 2012 Beestermöller, R., Macroeconomic cost-effectiveness of climate policy instruments in household energy demand, ongoing PhD project 26 October 2015 Robert Beestermöller () / CEEM Conference

14 Macroeconomic effects of changing operational lifetimes of German nuclear power plants (, 2011) (2011): Effects of changing operational lifetimes of German nuclear power plants scenario analysis until 2035 [in German], (), University of Stuttgart, Working paper No. 10, June October 2015 Robert Beestermöller () / CEEM Conference

15 Net employment effects of extending lifetime of nuclear plants from 32 to 40 years in Germany (/ZEW, 2010) /ZEW (2010): Energy market developments until 2030 The energy forecast 2009 [in German], a study for the German Federal Ministry for Economic Affairs and Technology (BMWi) Change of employees in 2020 when extending lifetime of nuclear plants from 32 to 40 years in Germany Economy total Thousands 130 non-ferrous metals iron and steel chemical industry construction industry agriculture nonmetallic mineral substance paper transport services rest of industry mechanical engineering 0,1% 0,5% 0,4% 0,4% 0,4% 0,4% 0,4% 0,3% 0,3% 0,8% 1,5% 26 October 2015 Robert Beestermöller () / CEEM Conference

16 Net employment effects of the renewable energy expansion in Germany Beestermöller, R. (2012), Net employment effects of the renewable energy expansion in Germany [in German], Presentation to the Symposium EnergieCampus, Stiftung Energie & Klimaschutz Baden-Württemberg, Stuttgart, November 2012 Renewable energies share of gross electricity generation Reference scenario 28% 37% Expansion scenario 35% 50% 1% 0% -1% Employment effects of selected industries in Germany (relative to the reference scenario) Chemicals Machinery Iron & Steel Services Electricity TOTAL 2% -0,3% 0,4% Total net employment effect in Germany until 2030 in the expansion scenario (Difference to the reference scenario in person years) 2010 to 2030 Cumulative sum On average per year % -3,5% -5,3% -7,0% October 2015 Robert Beestermöller () / CEEM Conference

17 Change of the unemployment rate in the EU under different climate policy regimes (Küster, 2009) Küster, R. (2009): Climate protection, macro-economy and employment Analysis of the German and European climate policy strategies using a CGE model [in German], Dissertation, Mensch und Buch Verlag, Berlin DEU EU-15 NMS-10 Germany EU-15 (w/o Germany) EU New Member States 26 October 2015 Robert Beestermöller () / CEEM Conference

18 Macroeconomic cost-effectiveness of climate policy instruments in household energy demand (ongoing PhD project) 1/2 26 October 2015 Robert Beestermöller () / CEEM Conference

19 Natural Gas Electricity Biomass Fuel oil Natural Gas Electricity Biomass Fuel oil Natural Gas Electricity Biomass Fuel oil Natural Gas Electricity Biomass Fuel oil Natural Gas Electricity Biomass Fuel oil [Bill. ] Macroeconomic cost-effectiveness of climate policy instruments in household energy demand (ongoing PhD project) 1,5 1 0,5 0-0,5-1 -1,5-2 Change in household demand for new building types in Germany (difference to the reference scenario) Refurbished New (standard) New (passive house) 2/2 REF Energy standards CO2 tax (household) CO2 tax (space heating) Emissions trading GDP change in Germany (relative difference to REF, in %) Unemployment rate changes in Germany (relative difference to REF, in %) Emissions trading CO2 tax (space heating) CO2 tax (household) Energy standards REF Emissions trading CO2 tax (space heating) CO2 tax (household) Energy standards REF TOTAL Unskilled Skilled -0,5% -0,4% -0,3% -0,2% -0,1% 0,0% 0% 1% 2% 3% 4% 5% 6% 26 October 2015 Robert Beestermöller () / CEEM Conference

20 Content 1. Overview 2. The CGE model NEWAGE Modelling nuclear power Modelling (un)employment 3. Results of selected -studies 4. Summary and outlook 26 October 2015 Robert Beestermöller () / CEEM Conference

21 Summary and outlook The CGE model NEWAGE has the following hybrid features: 18 electricity generation technologies 11 vehicle technologies 16 buildings technologies Imperfect labor markets (unemployment) The closed-circle-of-income-approach allows to conduct macroeconomic ex-ante comparisons of different policy interventions (e.g. taxes/subsidies, emissions trading) on a global scale assess competing investment projects (endogenous financing investments = savings) account for relative price changes (e.g. wages) quantify net effects (e.g. net employment effects) Ongoing research projects Competitiveness effects and macroeconomic impacts of carbon leakage options in ETS phase IV Distributional impacts of European energy and climate policies 26 October 2015 Robert Beestermöller () / CEEM Conference