The prediction of CO2 emissions up to 2020 in Japanese economic activities JIDEA team Japan 1

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1 18 th INFORUM World Conference held at Hkone, Sga Prefecture, Japan September 5 th -11 th, 2010 The predcton of CO2 emssons up to 2020 n Japanese economc actvtes JIDEA team Japan 1 1. The method of estmaton of CO2 emsson and t s forecast 1-1. Necessty of dynamc model based on I-O table The dynamc econometrc model based on I-O table s the most sutable method for forecastng the amount of CO2 emsson caused by economc actvtes. We can pont out the three reasons. The frst; the CO2 emsson s closely lnked wth Industral producton. To forecast the ndustral producton sector by sector, the I-O based dynamc model s ndspensable. The second; the amount of CO2 emsson depends on the consumpton of each energy source. Accordngly, t s necessary to know the ndustres amount of energy consumpton by energy source. For ths purpose, I-O based model lnked to the materal I-O table can delver necessary data detaled enough for our study. The thrd; t s necessary that the evoluton of ndustral structure correspondng to economc growth should be properly ncluded n the model. Our estmaton of CO2 emsson s performed wth two smulatons. Wth the frst smulaton, we want to clarfy how much amount of CO2 would be emtted by each ndustral sector or household, what s the relaton of prmary and secondary sector of energy consumpton. In ths smulaton, we assume the sector of electrc power generaton consst of only two sectors; Commercal electrc power and Electrc power self generated. The second smulaton focuses on Commercal electrc power (columns) whch s conssted of three sectors; nuclear energy, thermal energy and water and other energy. In ths smulaton, we want to clarfy, f thermal power generaton substtuted by nuclear power generaton, how much t affects the CO2 emsson. As the method to calculate CO2 emsson, we appled almost same calculaton process for these two smulatons, but they dffer only at the fnal step where the ntermedate coeffcent of Commercal electrc power sector s altered because of the substtuton of thermal power wth nuclear power. It should be noted that the total demand for electrcty s always same before and after the substtuton of thermal power generaton wth nuclear power Outlne of the procedure of CO2 emsson estmaton The outlne of procedure to estmate the CO2 emsson s shown n Fg.1-1. By JIDEA model, we can obtan how much energy wll be necessary for each ndustry over the comng 15 years; the necessty of energy consumpton s expressed n monetary term. To estmate the CO2 emsson, t s necessary to know the quantty of energy consumed 1 Yasuhko Sasa (assocate economst, I.T.I.), Takesh Imagawa (professor emertus of Chuo Unv.), Toshak Hasegawa (professor of Chuo Unv.) and Mtuhto Ono (chef economst, I.T.I.)

2 by energy source measured n materal unt. For ths purpose, we can use the materal matrx whch Japanese government statstcal offce publshes every 5 years 2. The materal matrx works as the brdge table between the monetary terms and physcal terms. In the materal matrx table, each row expresses quantty of goods as well as value. Each row has ts own unt dependng on ts materal nature. The columns are classfed by ndustres same as normal I-O table. As the unt of quantty s dfferent n each row, the column total s meanngless. A part of the materal matrx s shown n Table 1-1. From ths table, we can get each ndustry s materal coeffcent dvdng quantty by value. Fg. 1. The outlne of mechansm to estmate CO2 emsson Orgnal data Converter CO2 emsson for makng table calculaton converter process Materal Matrx: Value Orgnal Materal Matrx: Value 8 68 Materal Matrx: Value Materal Matrx: Quantty Petroleum Consumpton Structure: Quantty share Convert Matrx: JIDEA energy Value coeffcent 8 68 Value 8 66 Convert Matrx: JIDEA energy Value 8 68 Value coeffcent 8 68 to JIDEA energy Value Convert Matrx: Value to Quantty JIDEA energy Quantty Fossl fuel: The porton of energy source not used for energy JIDEA energy Adjusted Quantty CO2 emsson by source of fuels JIDEA CO2 emsson amount Step 1 Step 2 Step 3 Step 4 Step 5 The 1 st step: the two columns of JIDEA model such as Electrcty and Cty gas should be dvded nto more detaled classfcaton. If we want to calculate the precse CO2 emsson, the sector of Commercal Electrc generaton should be dvded nto Electrc power generaton and Electrcty self generated because these two sectors have dfferent nput structure. Cty Gas sector should be also dvded nto Cty gas supply and Hot water supply. Ths dvdng rato can be obtaned from the orgnal I-O table whch has more detaled classfcatons. 2 Source: Mnstry of Internatonal Affars and Communcatons, Statstcal Bureau, Drector-General for Polcy Plannng & statstcal Research and Tranng Insttute 2

3 Table 1-1. Example of Materal Matrx of Input-Output table n 2000 row-code row-tem columncode column-tem Unt-code Unt Quantty Value coal Coal, Crude ol, Natural gas 060 t coal Tobacco 060 t coal Spnnng 060 t coal Dyng 060 t coal Cord, Net 060 t coal Other textle products 060 t coal Other clothes 060 t coal Pulp 060 t coal Paper 060 t coal Corrugated paper 060 t coal Santary paper 060 t coal Chemcal fertlzer 060 t coal Inorganc pgment 060 t coal Salt 060 t coal Other norganc chemcals 060 t coal Basc petro-chemcals 060 t coal Petroleum based aromatc 060 t coal Alphatc ntermedate 060 t coal Cyclc ntermedate 060 t coal Synthetc rubber 060 t : : : : : : : : (Source: 2000 Materal Input-Output Table) The 2 nd step: JIDEA model has only 8 sectors related to energy source. For more precse estmaton of CO2 emsson, the 8 sectors should be dvded nto 19 sectors 3 as shown n Table 1-2. As can be seen n Table 1-6, the CO2 emsson amount per energy source s qute dfferent by energy. Fortunately the Materal I-O matrx has dstngushed energy sources nto 19 sectors. Accordngly, 8 sectors of JIDEA model can be extended nto 19. The JIDEA code correspondng to Materal I-O code s ndcated n Table 1-2. CO2 s emtted not only from hydrocarbon fuels but also from some knd of chemcal reacton. The most mportant reacton s calcum carbonate reacton n whch calcum carbonate changes nto calcum doxde and CO2. CaCO3 CaO + CO2 Ths reacton takes place n furnace when the lme stone (CaCO3) s heated more than 900 Centgrade. CaO acts as reducng agent n the furnace. Accordngly we assumed that when lmestone s used as ntermedate nputs n Iron & Steel, Cement and Glass ndustry, lmestone becomes a source of CO2 emsson. 3 Lme stone s the source of CO2 emsson n spte of ts non energy character. 3

4 Table 1-2. The Correspondng Table for Materal I-O code and JIDEA code Item Materal matrx JIDEA model Orgnal-c Energy-c unt JIDEA Model tem Model-c Lme stone t Non-metalc or 3 Coal t Coal 4 Crude ol kl Petro & gas exploraton 5 Natural gas m3 5 Gasolne kl Petroleum products 21 Jet fuel kl 21 Kerosene kl 21 Lght ol kl 21 Heavy ol A kl 21 Heavy ol B and C kl 21 Naphtha kl 21 LPG t 21 Other petro products Cokes t Coal products 22 Other coal products Power staton mlon kw Electrc power 54 Housemade electrcty mllon kw 54 Cty gas m3 Cty gas & hot water 55 Self Generated Electrcty G joule 55 (Source: 2000 Materal Input-Output Table and JIDEA model) The 3 rd step: values of energy n 19 sectors extended from 8 sectors of JIDEA model are converted nto 19 sectors of quanttes by the Value to Quantty Coeffcent Matrx. A part of Coeffcent Matrx convertng Value to Quantty s shown n Table 1-3. Table 1-3 contans also 4 sectors related to Iron & Steel whch are used to calculate the amount of Lme stone requred to produce the steel products. Table 1-3. Example of Coeffcent Matrx convertng Value to Quantty Item or Industry Agrculture, Fshery, Forestry Metal mnng Non- Metal mnng Coal Crude ol, Naturl gas Food Beverage Textle Clothng Wooden products Energy-c unt Lme stone 1 t coal 2 t crude ol 3 kl natural gas m gasolne 5 kl jet fuel 6 kl kerosene 7 kl lght ol 8 kl heavy ol A 9 kl heavy ol B and C 10 kl naphtha 11 kl LPG 12 t cokes 14 t pg ron 16 t feroarroy 17 t converter steel 18 t steel 19 t power housemade staton 21 mlon kw electrcty 22 mllon kw cty gas m heat supplyer 24 G joule (Source: calculated by JIDEA team Japan).. The 4 th step: the fossl fuels are not always used as energy but as a materal requred to produce other materals. The porton of fossl fuels not used for energy dffers by sector. How much porton of fossl fuels used as energy s publshed n The 4

5 Statstcs on Consumpton Structure of Petroleum and Other Energy Materals 4. The part of ths statstcs s shown n Table 1-4. From ths statstcs, we can derve the table; The rato of fossl fuels not used as energy. The part of ths table s shown n Table 1-5. Table 1-4. The Statstcs on Consumpton Structure of Petroleum and Other Energy Materals Industra l classfcaton Consumpton Item Fuel code Fuel tem Unt Input Materal Drect Cogeneraton Output Total for other Boler Other products heatng : : : : : : : : : : : : : : 0 Total 2010 Crude Ol kl Chemcal Industry 2010 Crude Ol kl Organc Chemcal 2010 Crude Ol kl Basc Petro-Chemcal 2010 Crude Ol kl Alphatc Chemc. Intmed Crude Ol kl Cyclo-ntmed Chem Crude Ol kl Other Inorg. Chem Crude Ol kl Ceramc & Stone 2010 Crude Ol kl Other Ceramc & Stone 2010 Crude Ol kl Calcum Sulfate 2010 Crude Ol kl Total 2110 Gasolne kl Food Mnfg Gasolne kl Anmal Husband 2110 Gasolne kl Meat Prod Gasolne kl Mlk Prod Gasolne kl Other Anmal Husband Gasolne kl Fshery Prod Gasolne kl : : : : : : : : : : : : : : (Source: METI, The Statstcs on Consumpton Structure of Petroleum and Other Energy Materals) Stock End of the year Table 1-5. The rato of fossl fuels not used as energy Pulp & Prntng & norganc Petro Organc Synthetc Synthetc Fnal Pharmath Petro paper publshng chemcals chemcals chemcals Resne fber chemcals utcs products Lme stones Heavy ol A Heavy ol B and C Gasolne Gas as bproducts of cokes Naphtha LPG LNG Converted ol Lght ol Crude ol Furnace gas Coal Cokes from coal Cokes from petroleum Hydro-carbon gas from petro Hydro-carbon ol Natural gas Converter gas Electrcfurnace gas Cty gas Keroscene * Lme stone value s always 1 except Steel ndustry, Cement and Glass ndustry. (Source: calculated by JIDEA team Japan) The 5 th step: we apply the rato of carbon contaned n each hydrocarbon fuels to calculate CO2 emsson amount by ndustry. The calorfc rato and CO2 emsson rato by fuels are shown n Table The statstcs s publshed by METI but the publcaton of ths seres has been stopped snce

6 Table 1-6. The calorfc rato and CO2 emsson rato by fuels Quantty Calorfc value CO2 Emsson per Calory (kg) CO2 Emsson per Quantty (t) Fuel Unt MJ/Unt kg- t-co2/unt Coal for cokes t Coal t Crude ol kl Natural gas 1000m LNG* t Gasolne kl Kerosene kl Jet fuel kl Lght ol kl Heavy ol A kl Heavy ol B/C kl Naphtha kl LPG t Reformed ol kl Hydro-carbon ol t Hydro-carbon gas 1000m Petro cokes t Cokes t Cokes furnace gas 1000m Blast furnace gas 1000m Revolver furnace gas 1000m Electrc furnace gas 1000m Coal pt gas 1000m Coal tar t Commercal Electrc powermllon Kwh Self generated electrcty mllon Kwh Cty gas 1000m Heat supply gga joule (Source: Center for Global Envronmental Research; Emboded Energy and Emsson Intensty Data for Japan Usng Input-Output Tables Inventory Data for LCA-) 2. Results of Predcton of CO2 Emssons by Japanese Economc Actvtes 2-1. Overvew of the predcton of CO2 emsson The result of estmaton and predcton of Japanese CO2 emsson up to 2020 are summarzed n Fg.2-1. CO2 emsson leaped up n 2004 and 2007, and from 2008 to 2010, affected by the sub-prme loan shock, Japanese economc actvtes stagnated and CO2 emsson shrunk accordngly. After that, CO2 emsson wll ncrease slghtly. The man player of ths ncrease wll be the household sector, whle the CO2 emsson by ndustral actvtes s keepng almost constant level (see also Table 2-1). It goes wthout sayng that the CO2 emsson s correlated to the ndustral output, and nversely related to the ndustral energy effcency. To present these relatons more clearly, the ndces of CO2 emsson per GDP and CO2 emsson per capta were calculated and put n the rght hand sde of Table 2-1. Fg CO2 Emsson by household and Industres (unt: mllon ton) CO2 Emsson (Mll. ton) Industry Household Total (Source: prepared by JIDEA team Japan) 6

7 Table 2-1. Japanese CO2 Emsson by Economc Actvtes CO2 CO2 CO2 Relatve GDP n CO2 CO2/GDP CO2/ Emsson Emsson Emsson Share by Real TermsEmsson Populaton by Industry by HousehoTotal Household Year Quantty (100 Mll. Ton) (%) Index (2000 = 100) (Source: prepared by JIDEA team Japan) Comparng wth the fgure n 2000, total CO2 emsson wll slghtly decrease to 99.3% n 2020, whle real GDP wll ncrease to n 2020 (Table2-1 or Fg.2-2). Consequently CO2 emsson per GDP n real term wll decrease to 94% n Ths means that the energy effcency of Japan measured by CO2 emsson per GDP n real term wll declne rapdly n ths perod (Table2-1 or Fg.2-3). On the other hand, the CO2 emsson per capta wll ncrease by 3.3% pont and especally after As the result, share of the household relatve to the total amount of CO2 emsson wll decrease from 19.6% to 17.6% n 2010, then ncrease to 20.0% n In spte of populaton declne, the up-gradng n lvng standard or endless pursut of comfort of lvng wll be a cause to augment energy consumpton, especally electrcty by household. Fg.2-2. Indces of GDP and CO2 Emsson (2000 = 100) Index (2000 = 100.0) GDPr CO2 Emsson (Source: prepared by JIDEA team Japan) Fg.2-3. Indces of CO2 Emsson per Real GDP and per Capta (2000 = 100) Index (2000 = 100.0) CO2/GDPr CO2/Pop (Source: prepared by JIDEA team Japan) 7

8 2-2. Predcton of energy consumpton by source Needless to say, CO2 emsson s closely lnked wth the fossl fuel consumpton. Fg.2-4 shows consumpton of energy by source n terms of tera joule ncludng secondary energes of electrcty and cty gas. The electrcty, 30% of whch comes from nuclear energy n Japan, 5 wll ncrease rapdly. In contrast to the declne of crude ol and gas consumpton after 2005, coal consumpton wll ncrease gradually. One cauton should be noted that the prces of coal, crude ol and natural gas are fxed at the level of 2006 n ths predcton 6. Fg.2-4. Consumpton of Energy by Source (unt: tera joule) Energy Consumpton by Source (tera Joule) Petroleum Prdct Electrcty Coal Crude Ol & Gas Coke Cty Gas (Source: prepared by JIDEA team Japan) The household energy consumpton by source s presented n Fg.2-5. The consumpton of petroleum products, decreasng n 2005 and 2010 because of the economc recesson, wll ncrease up to 2020, whle the consumpton of electrcty, though slghtly decreasng n 2010, wll also contnue to ncrease. Fg.2-5. Household Energy Consumpton by Source (unt: tera joule) Household Energy Consumpton by Source (tera Joule) Petroleum Prdct Electrcty Cty Gas Coal Total (Source: prepared by JIDEA team Japan) 5 Detaled dscusson wll be gven n secton 3. 6 Foregn exchange rate was also fxed to 2006 level. 8

9 2-3. Predcton of CO2 emsson by ndustry There are two sources of CO2 emsson by ndustry, namely, one s secondary energy producng sectors such as electrc power (commercal and self generatng), cty gas and heat supply, and the other s a group of ndustres excludng secondary energy producng sectors, or non-secondary energy producng sectors. Total amount of CO2 emsson by ndustry s the sum of the CO2 emssons of these two sectors. Table 2-2 descrbes the estmaton and predcton of CO2 emsson by secondary and non-secondary energy producng sectors n the form of ndex. Table 2-2. Secondary Energy Producng Sectors: CO2 Emsson Index and Relatve Share Secondary Energy Producng Sectors Non- Secondary Non- Secondary Energy Secondary Year Electrc Electrc Cty Gas Heat Energy Total Producng Energy Power Power (Self Supply Prducng Sctors Producng (Commercal)Generatng) Sectors Sctors Index (2000 = 100.0) Share (%) (Source: prepared by JIDEA team Japan) The share of CO2 emsson by the secondary energy producng sectors relatve to total amount of CO2 emsson, shown n the rght hand sde of Table 2-2, was 29.4% n 2000 and s predcted to be 36% n Especally the electrc power (commercal) sector s clearly expandng as the ndex of electrc power (commercal) wll be n What s much more nterestng s the detaled pcture of CO2 emsson by ndustres excludng secondary energy producng sectors. In ths study the ndustral actvtes are composed of 66 sectors. In calculatng the amount of CO2 emtted by ndustres, there s a problem how to deal wth the emsson of CO2 by the sector of electrc power. Each ndustral sector uses electrc energy, but electrc energy s a secondary energy produced from fossl fuels or from other prmary energes. An ndustry whch uses electrc energy only, emts no CO2, whle generatng electrcty tself nevtably emts consderable amount of CO2. Who should be responsble for emsson of CO2, the producer or the consumer of electrc energy, or both? In ths analyss the amount of CO2 emsson by electrc power ndustry, whch s one of the secondary energy producng sectors, was mputed to the amount of CO2 emtted by non-secondary energy producng sectors, the end-user of electrcty generated. The benefcary-pays prncple wll be most approprate. Table 2-3 presents the amount of CO2 emsson predcted up to 2020 by top 20 sectors selected by the descendng order of the amount of CO2 emsson n The share of these 20 sectors relatve to total CO2 emsson was calculated and put n the last row of the table. It was 80.6% n 2000, and clmbng up to the level of 83% n 2005, ts share wll be 82.3% n As Table 2-3 shows, bg three sectors measured by the level of CO2 emsson are 9

10 sectors of Iron & Steel (1 st ), Transportaton (2 nd ) and Trade (3 rd ). In 2000, 34.1% of total amount of CO2 emsson was ascrbed to these three sectors, and ths fgure wll slghtly clmb up to 35.2% n Iron & Steel sector wll ncrease CO2 emsson up to 2020, though ts 2010 level wll be lower than the 2005 level. Both Transportaton sector and Trade sector wll acheve to reduce ts CO2 emsson to 94% and 74% of 2000 level n 2020 respectvely. Table 2-3. CO2 Emsson by Non-Secondary Energy Producng Industres (Upper 20 sectors) (unt: mllon ton) Sector No. Sector's Name 29 Iron & Steel Transportaton Trade Educaton & Research Mscll. Manufacturng Personal Servces Petro Products Government Servces Glass Pulp&Paper Organc Chem Constructon Advertzng Food Products Water & Sewage Cement Inorganc Chem Other Vehcles Fnance&Real Estate Agr., Forestry&Fshery Sub Total Grand Total Share of Upper 20 Sectors (%) (Source: prepared by JIDEA team Japan) In the sectors ranked n 11 th to 20 th level n ths CO2 emsson table, Food products sector (14 th ), Cement (16 th ) and Agrculture, forestry and fshery sector (20 th ) are reducng the CO2 emsson, whle Organc chemcals (11 th ) and Inorganc chemcals (17 th ), though reachng to the lower level n 2005, are constantly ncreasng CO2 emsson up to Other sectors wll be more or less ncreasng the level of CO2 emsson by 2020 ownng to the gradual recovery of the Japanese economy after 2010, though some of them are temporally lowerng the level of CO2 emsson n Table 2-4 presents the annual average rate of CO2 emsson from 2010 to 2020 by ndustry excludng secondary energy producng sectors. The left hand sde of the table ndcates upper 20 sectors ranked by the order of the annual average rate of CO2 emsson, whle n the rght hand sde, lower 20 sectors are lsted. 7 From Table 2-3, the relatve share of these bg three sectors can be easly calculated. 10

11 Table 2-4. Annual Average Rate of CO2 Emsson by Industry from 2010 to 2020 Upper 20 sectors (unt: %) Lower 20 sectors (unt: %) Sector Sector's 2020/ Sector Sector's 2020/ No. Name 2010 No. Name Semconductor & IC Clothng Water & Sewage Metal Ore Electronc Parts Petro Chemcal Plastc products Coal Other Transportaton Agrculture, Forestry & Fshery Organc Chemcals Computer Medcnes Non-Metal Ore Motor Vehcle Prntng & Publshng Communcaton & Broadcastng Wood Products Other Vehcles Pottery Educaton & Research Furnture Non-Ferrous Metal Cvl Engneerng (Pub) Metal Constructon Electrc Mach. Household Offce Supply & N.E.C Crude Ol & Ntrl Gas Heavy Electrc Cement Plastc products Precson Machnery General Mach. Others Other Ceramcs Iron & Steel Beverages and Tabacco Other Lght Metal Products Appled Electronc Devces Transportaton (Source: prepared by JIDEA team Japan) Comparng these two groups wth each other, some of the ndustres ranked n the upper 20 sectors seem to be ndustres much more compettve n the nternatonal market than the ndustres n the lower 20 sectors whch can be categorzed as the declnng ndustres Typology of ndustry; emttng less CO2 or more n 2020 As already mentoned n the frst page of ths paper, the CO2 emsson s deeply correlated to the ndustral output and nversely related to the ndustral energy effcency (or the nverse of energy per output). Relatons among the annual rate of ncrease n CO2 emsson, the growth rate of ndustral output and the rate of ncrease n energy per output can be tactcally descrbed usng a knd of 3D graph. Fg. 2-6 s a coordnate graph showng postve and negatve numbers. Out of 66 sectors, ndustres ranked n the upper 30 sectors of CO2 emsson excludng secondary energy producng sectors are represented n ths graph. The vertcal axs n Fg. 2-6 ndcates the growth rate of real output by ndustry (b) from 2010 to 2020 and by the horzontal axs the rate of ncrease n energy per output (c) (or the nverse of energy effcency) n the same perod s ndcated. The more ncreased the energy per output s, the more deterorated s the energy effcency. On the dagonal lne of 45 degrees uprsng towards the left hand sde n the graph, the followng relaton s always mantaned. Addng up the growth rate of output (b) and the rate of ncrease n energy per output (c) comes to zero, whch means the rate of ncrease n CO2 emsson (a) s zero 8. Therefore, ndustres placed over the dagonal lne 8 CO2 emsson = CO2 emsson rato * real output*energy per output 11

12 n Fg. 2-6 such as Glass, Busness servces, Non-ferrous metal, Iron & Steel, Plastc products and Inorganc chemcals, etc are categorzed n the ndustres wth ncreasng CO2 emsson, whle ndustres placed under the dagonal lne n the graph are denoted as the ndustry wth less CO2 emttng. They are Constructon, Trade, Transportaton, Food products, Cement, and more. Industres n the frst quadrant of Fg. 2-6 are ndustres both wth ncreasng growth rates of output and wth ncreasng rate of energy per output, whch wll be man actors escalatng CO2 emsson, though only two sectors of Plastc products and Iron & Steel are classfed n ths group. Industres n the second quadrant of the graph are those wth ncreasng output but decreasng energy per output, contrbutng to lower the level of CO2 emsson, though dependng on the poston placed on whch sde of the dagonal lne of 45 degree. 22 sectors selected and placed n ths quadrant are Busness servces, Constructon, Trade, Fnance & Real estate, Transportaton, Government servces, Personal servces, Organc chemcals, Glass, Non-ferrous metal, Food products, Inorganc chemcals, Pulp & Paper, Processed non-ferrous metal, Cvl engneerng (publc), Fnal chemcals, Communcaton, Informaton servces, Coal products and Other vehcles, Other publc servces and Water & Sewages. Fve ndustres n the thrd quadrant of the graph are ndustres wth both declnng output and decreasng energy per output, whch nclude Agrculture, Forestry & Fshery, Other ceramcs, and Metal others, Cement and Mscellaneous manufacturng. Especally reducton n the agrcultural energy per output s remarkable. Ths s manly because of the lastng downward tendency n agrcultural output. Hstorcal pcture wll gve some help. Reducton n agrcultural producton n Japan was about 2% from to , 9 whle the drect on-farm energy consumpton was decreased by 5% from to , though Japan s share n total OECD on-farm energy consumpton was 10% n , next to the U.S.A. of whch share was 23% 10. Only one sector located n the fourth quadrant of the graph s Petroleum products wth decreasng output but ncreasng energy per output. Accordng to the projecton of domestc demand for petroleum products up to 2014 by METI (Mnstry of Economy, Trade and Industry), demands for fuel ol such as gasolne, naphtha, kerosene, lght ol and heavy ol are supposed to declne from (mllon kl) n 2008 to (mllon kl) n 2014, though the reason s not shown n the report. 11 Assumng rates of ncrease n CO2 emsson, real output and energy per output as a, b and c, the followng formula wll be ntroduced, snce CO2 emsson rato s constant. a = b + c. On the dagonal lne of 45 degrees n Fg. 2-6, b and c has the same value wth opposte sgn. Therefore a, rate of ncrease n CO2 emsson should be zero. 9 Calculated from the data avalable n the agrcultural producton statstcs table by MOAFF (Mnstry of Agrculture, forestry and Fshery) 10 See Fgure , p.79 n OECD (2008), Envronmental Performance of Agrculture n OECD Countres Snce1990, 575p. OECD Publcaton, Pars

13 Fg Relatons between the Growth Rate of Real Output and the Rate of Increase n Energy per Output (unt: %) 2.5 Water & se 2.0 Busnes se Growth Rate of Output (b) (%) Oth publc 1.5 Organc ch Plastc pr Glass Communcat Construct Trade Other veh Nonfer met Inform ser 1.0 Fnal chem Transport Proce Nonf Fnance Iron & ste 0.5 Inorg chem Government Food prod Persnl Ser Coal prod Cvl eng Pulp&paper Mfg mscel Oth ceram Cement -0.5 Metal othe Petro prod -1.0 Agr,fshe -1.5 Rate of Increase n Energy per Output ( c ) (%) -2.0 (Source: prepared by JIDEA team Japan) 2-5. Remanng problems revealed from the comparson CO2 emsson n Japan s also estmated by two other nsttutons. One s by Natonal Insttute for Envronmental Studes, Japan (NIES) and the other s by Keo Economc Observatory of Keo Unversty (KEO). Though smple comparson of these three results ncludng JIDEA s s not frutful snce the methods and databases used are 13

14 certanly dfferent from each other, f the estmates n the year 2000 are compared, JIDEA s estmate s the hghest, the second s KEO s and NIES s s the lowest (see Table 2-5). In other words, snce NIES s s regarded as the offcal fgure of CO2 emsson of Japan, both JIDEA s and KEO s are overestmated. Table 2-5. CO2 Emsson Estmated by 3 Insttutes NIES*1) KEO*2) JIDEA*3) RealGDP*3) NIES KEO JIDEA RealGDP Year (2010) (2001) (2009) (2000 prce) (2010) (2008) (2009) (2000 prce) (2008) Mllon ton Trllon. yen Index (2000=100) (Sources: *1) From Table 1, p.2 n Natonal Insttute for Envronmental Studes, Japan (2010), Natonal Greenhouse Gas Inventory Report of Japan, Aprl. JPN_2010_v3.0E.pdf (2010/08/14) *2) Kechro Asakura Htosh Hayam, et al (2001), The Input-Output Table for Envronmental Analyss, Keo Unversty Press. Satosh Nakano, Htosh Hayam, Nasao Nakamura and Masayuk Suzuk (2008), The Input-Output Table for Envronmental Analyss and ts Applcaton, Keo Unversty Press. *3) Data prepared by JIDEA team Japan.) Reasons of overestmatng CO2 emsson by JIDEA team seem to be the followng; 1) The converson coeffcent of value to quantty The data of I-O table are expressed n value term. To estmate CO2 emsson, as already mentoned n secton 1, t needs to convert the value to quantty n the materal table. JIDEA s converson table s based on the materal I-O table of the year 2000 and fxed up to Ths s manly because the materal matrx s publshed every 5 years and the base year of JIDEA model s also the year Snce the relaton between materal and quantty n the materal I-O table changes year by year, t may cause relatvely large dstorton n JIDEA s estmaton of CO2 emsson. 2) The aggregaton of ndustral sectors JIDEA model s composed of 66 ndustral sectors and has 8 sectors related to energy, whle the I-O base table has 19 energy related sectors. Therefore these 8 sectors n JIDEA model should be dvded nto19 sectors consstent wth the I-O base table of These dvdng ratos n 2000 were kept constant and appled to the data from 1990 to Ths may be one of the causes of some dstortons n the predcton. 3) Import and export defnton The mport and the export n the fnal demand components are not ncluded as the 14

15 sources of CO2 emsson. I-O table used n JIDEA model s the competng mport type, namely, mported goods and domestcally produced goods are of no dfference as nput goods. Thus the mported materals are mxed n the ntermedate nput and household consumpton. Another problem unsolved s how to calculate CO2 emsson caused by energes suppled to foregn shps or arplanes and to the Japanese ones n the foregn country. Accordng to the defnton of domestc nput n the I-O table, to whch JIDEA s database s followng, the former s counted n the export and the latter s categorzed as the mport. 4) Iron and steel ndustry Iron & Steel ndustry, one of the man sectors emttng enormous amount of CO2, has very complcated mechansm n ts energy consumpton and CO2 emsson. The process to make ron from ron ore, coke and lmestone, and steel from ron are very complcated and dfferent accordng to the method of producton. To calculate CO2 emsson more precsely, emsson of CO2 gas should be measured n every stage of the process. JIDEA model has a smplfed process n estmatng CO2 emsson from the amount of nput materals of coke and lmestone, whle the other nsttutons employ more sophstcated calculaton process. Ths dfference may be crucal to obtan better estmaton of CO2 emsson. 3. Smulaton for reducton of CO2 emsson usng nuclear power We forecast Japanese economy and ts CO2 emsson up to 2020, whch s shown n the prevous secton. In ths secton, we wll make two smulatons how much we can reduce ts emsson n 2020 by substtutng thermal power generaton wth nuclear power. The frst case s assumng to have the current expanson plan of nuclear power generaton realzed by We call ths as the practcal case. The second case s how we can accomplsh the md-long term target of 25% reducton of her CO2 emsson n 2020 aganst 1990, whch was advocated by former Prme Mnster Yuko Hatoyama. We name t the extreme case. For the methodology, please refer to the techncal note at the end of ths sesson The Practcal case The assumptons 12 for smulaton are shown below and Table The nuclear power generaton capacty wll be ncreased by mllon kw13 from mllon kw n FY2007 to mllon kw n FY The average utlzaton rate s 88.0 % 14, whch s hgher than that of 12 Though assumpton fgures are expressed n fscal year (FY), our model data are n calendar year (CY). We neglect the dfferences as they are not so much. 13 Ths s the total capactes of planned nuclear power generators whch are to go nto operaton by the end of FY Ths rate s supposed to be derved by assumng that the stoppage of the plant by regular nspecton should be some 38 days, whch s the average of USA. 15

16 60.9% n FY2007. (see Fg. 3-1) 3. The total amount of power generaton by nuclear energy wll be bllon kwh n FY2010. Ths s a 77.7% ncrease aganst the level n FY2007. These presumptons are based on Natonal Insttute for Envronmental Studes of Japan s assumptons for the md-long term projecton of Japanese natonal greenhouse gas emssons 15. Table 3-1. The trends of Japanese nuclear power generaton factors and ther projecton n 2020 (unt:no.,mllon KW, bllon kwh, %) FY No. of generators (CY) Total capactes of generators Annual outputs of electrc power generated by nuclear power Utlzaton rate Share of nuclear generaton Note: Utlzaton rate = Annual outputs of electrc power generated by nuclear power dvded by(total capactes of generators*24h*365days) (Source: METI; Energy Whtepaper of INFOBASE of nuclear power p.11for the No. of Generators (as of August 11, 2010) 16

17 Fg Utlzaton rate % FY (Source: calculated by JIDEA team Japan) The results of CO2 reducton by substtutng thermal power generaton to nuclear power generaton s shown n Table 3-2. In the practcal case, whch assumes the current constructon plan for nuclear power plant materalzed by 2020 wth a hgh utlzaton rate, we can expect only 8.0% 16 reducton of CO2 emsson aganst the baselne fgure n Table 3-2. The results of CO2 reducton (unt: mllon ton, %) CY CO2 emmsson Estmated fgures Reducton rate , Baselne 1,357 Practcal case 1, Note: 1. Practcal case: Substtutng thermal power generaton to atomc one by scheduled plan as of Reducton rate s calculated aganst the baselne fgure of (Source: JIDEA Team Japan's estmate) 3-2. The Extreme case In ths subsecton, we calculated how much of thermal power generaton should be replaced by the nuclear power to materalze the md-long term targets of 25% reducton of CO2 n 2020 aganst As our model uses the CY data aganst the observaton data of FY, there s a dscrepancy observed n the CO2 emsson volume even n the base year. In order to elmnate the resdual 17, we created adjusted data by reducng the error of the observaton and estmated data n We wll use ths adjusted data for ths smulaton as we have to compare wth the hstorcal fgure n We admt that ths reducton rate may be overestmated as we assumed ncreasng trends of nuclear power generaton n ths model. 17 Ths may be derved by 1) the dfference of CY and FY, 2) the coarseness of Materal matrx, and 3) the correspondence wth value and Materal matrx s fxed n 2000, and so forth. 17

18 The estmated fgures are calculated by fxng rato of fossl fuels not used as energy and the convert matrx of value to quantty at 2000 level. Therefore the fgures shown here are theoretcal one. The result s shown n Table 3-3. Our smulaton shows that almost all of ts thermal power generaton should be substtuted wth the nuclear power even we assume the 88% utlzaton rate to accomplsh the 25% cuts of CO2 n Ths means that we should make use of 2.25 tmes of nuclear power generators whose capacty s 11, mllon kw, aganst the end of 2009 n number. Table 3-3. The trends of CO2 emmsson n Japan (unt:mllon ton) CY CO2 Emsson 1 Estmaton 2 Adjusted ,313 1, ,330 1, ,350 1, ,204 1, ,448 1, ,381 1, ,899 1, ,246 2, ,546 1, ,532 1, ,366 1, ,409 1, ,372 1, ,409 1, ,430 1, ,383 1, ,378 1, ,416 1, ,385 1, ,336 1, ,317 1, ,315 1, ,319 1, ,323 1, ,327 1, ,331 1, ,336 1, ,342 1, ,347 1, ,352 1, Baselne 1,357 1,244 Extreme Rato aganst Note; 1. CO2 emsson (FY) announced by the Mnstry of Envronment 2. Estmaton by Model (CY 2000= base) 3. Adjusted; applyng the constant term adjustment n (Source: Japan Center for Clmate Change Actons' Web ste ( and estmaton by JIDEA team Japan.) 18

19 Techncal note: Substtutng nuclear power for thermal power For the electrc power sector, JIDEA model only dstngushes one sector, but n the detaled I-O table, t conssts of 4 sectors; Nuclear power, Thermal power, Water and other powers and Electrc power self generated. Accordngly, to make smulaton to substtute Thermal power wth Nuclear power, we need to calculate these 4 sectors ntermedate nputs separately and after the calculaton we unfy these 4 sectors nputs nto one coeffcent, namely, electrc power total coeffcent. In the frame work of I-O table, the flow of calculaton expressed n equaton s as follows: assumng Electrc power total as E, Electrcty produced by Nuclear power N, Thermal power T, Water and other power O and Electrc power self generated H, the ntermedate nput of each power generaton by nput materals s notated as E, N, T, O and H, then, E = N + T + O + H n = 1 E = n = 1 N + n = 1 E = N + T + O + H T + n = 1 O + n = 1 Dvdng E, A, F and O by ther total and makng them coeffcent as e, n, t and o, then, H e h = E = H n n n n / E n = N / N t = T / T o = O / = 1 = 1 = 1 = 1 / n = 1 H O Then we can calculate, N = n N, T = tt, O = oo, H = h H, E = e E e = ( N + T + O + H ) / E Now, we assume that the producton of electrcty by Nuclear power s ncreased wth the rate α and the same amount of electrcty substtutes that of Thermal power. The total electrcty has not changed but the weght of above mentoned 4 sectors are changed. Accordngly Unfed Electrc power coeffcent should be changed. If changed amount of electrcty by Nuclear power s named as N, by Thermal power as T, then, 19

20 N = ( 1+ α)n, T = T αn, After substtuton of Thermal power by Nuclear power, f the coeffcent of total unfed electrc power named as e, the followng dentty s obtaned. e = ( n N + tt + oo + h H ) / E Table 3-4. The changes of nput coeffcents accordng to the cases Sector No. Item Baselne Practcal case Extreme case 4 Coal mnng Petro & gas exploraton Clothng Tmber Furnture Prntng & publshngng Inorganc basc chemcals Fnal chemcals Petroleum refnery products Coal products Other ceramc, stone & clay produc Non-ferrous metals refnery produc Processed non-ferrous metal produ Other metal products Communcaton equpment Electronc Parts Electrc llumnator, batteres & oth Mscellaneous manufacturng prod Constructon Electrc power Gas & hot water supply Water supply & treatment Trade Fnancal & nsurance servces Transportaton servces Communcaton & Broadcastng Educaton, research & Medcal serv Informaton servce Busness Servce Personal Servce Offce Supply & N.E.C Intcoltot Note: When the value of nput coeffcent s 0, the sector s not lsted n the table. (Source: Calculated by JIDEA team Japan) 20