SUSTRUS: TML tasks Christophe Heyndrickx [e-mail]

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SUSTRUS TML tasksChristophe Heyndrickx
christophe_at_tmleuven.be
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Outline

• Introduction to TML
• TML in the SUSTRUS project
• Experience in model construction
• Policy indicators
• Linking the three dimensions of sustainability

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Outline

• Introduction to TML
• Experience in model construction
• Policy indicators
• Linking the three dimensions of sustainability

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Introduction to TML

• Transport and Mobility Leuven
• 14th February 2002
• Multidisciplinary Team (13 employees)
• Civil Engineers
• Economists
• Environmentalists
• Computer Scientists
• Urban Planners
• General Manager Griet De Ceuster
• 50 of shares University of Leuven, other 50
  are held by TNO

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Introduction to TML

• Quantitative modelling
• Supporting Government Policy
• (European commission, national and regional
  governments, lobby groups)
• Domains of Expertise
• Transport Economics
• Traffic Engineering
• Transport Analysis
• Environment
• Logistics
• Spatial Economics

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TML in SUSTRUS

• Preparation of the proposal
• WP3 model methodology, model callibration and
  construction
• WP4 determining valuable economic indicators,
  implementation of policy assessment framework
• WP6 construction of the international module
• WP8 integration of the international module, the
  social module and the environmental module into
  the general structure

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Outline

• Introduction to TML
• Experience in model construction
• Policy indicators
• Linking the three dimensions of sustainability

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Model construction

• Models developed and used by TML
• Transport economic models
• -TREMOVE Road transport and emissions (partial
  equilibrium model)
• General equilibrium models
• -EDIP general equilibrium model for 31 European
  countries, modeling road transport, emissions,
  social policies and inequality in detail
• Regional general equilibrium models
• -RAEM regional equilibrium model for the
  Netherlands
• -ISEEM regional equilibrium model for Belgium
  (similar to RAEM)

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RAEM model

• 15 commodities and 15 production sectors (1
  sector, 1 product)
• 17 production factors (commodities labour
  capital)
• Leontief in value added and intermediate inputs
• Capital and labour are mobile among sectors
• Small-open economy assumption (Armington)
• Government sector with Federal and Local levels,
  collects different taxes and makes transfers
  (Cobb-Douglas utility function)
• Migration between regions according to generation
  distribution function
• Trips (business, shopping, other, education)
  according to generation distribution function
• Commuting trips according to attraction function
  (based on work of Mark Thissen on RAEM 2.0)

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ISEEM model

• Similar to RAEM, but extended with new elements
• 26 sectors and 26 commodities (dropped 1 sector-1
  product assumption)
• 30 production factors capital, labour, land and
  buildings
• Wage bargaining on labor market (national level),
  combined with Pissarides approach
• Emissions per sector in different industries,
  services sectors and residential sector
• Welfare of households associated with emissions
  and pollution
• Energy inputs are explicitly modelled difference
  between fossile fuels (coal, oil and gas) and
  other energy inputs
• Construction sector and land use
• Innovation and RD

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EDIP model

• 31 European countries (EU27 NO HR SE TR)
• 60 sectors and related commodities
• 62 production factors (commodities land
  capital)
• Detailed modeling of the transport sector and
  energy sector
• Emissions by sector and by energy type
  (coal/oil/gas)
• Detailed labour market modelling different
  household types, with different occupations and
  educations.
• But, not a regional model !

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Model methodology and construction

• Some basis can be provided by ISEEM, RAEM and
  EDIP models, applied to Russian datasets and the
  literature review worked out in WP1
• RAEM/ISEEM regional equilibrium modelling
  EDIP more attention to social policies and
  environment
• Amount of sectors remains to be specified,
  sufficient detail will be necessary for
  sustainability issues.
• In the Russian context we will have to put more
  attention to land use and natural resources
• Modelling of the labour market, commuting,
  transport trips should be simplified
• More attention to dynamic part of the model

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sec1 Agriculture, Forestry, Fisheries
sec2 Mining and Quarrying
sec3 Manufacturing of Food, Drinks, Tobacco
sec4 Manufacturing of Clothing and Footwear
sec5 Manufacturing of Wood Products
sec6 Manufacturing of Paper and Print Media
sec7 Manufacturing of Cokes, Refined Oil Other
sec8 Manufacturing of Chemicals, Pharmaceutics
sec9 Manufacturing of Plastics
sec10 Manufacturing of Glass, Ceramics and Building Materials
sec11 Manufacturing of Basic Metal products
sec12 Manufacturing of Machinery
sec13 Manufacturing of Electronical Equipment
sec14 Manufacturing of Transportation Equipment
sec15 Energy, Water Supply
sec16 Construction
sec17 Wholesale and Retail Trade
sec18 Hotels, Restaurants, Cafés
sec19 Transport
sec20 Communication
sec21 Banking and Finance
sec22 Business Services
sec23 Government Services
sec24 Education
sec25 Health
sec26 Leisure Services
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Model construction

• Detail depends on collected data, should at least
  have the necessary detail to be able to have
  different energy inputs and model natural
  resources
• First build a simple model, based on earlier work
  for Russia and the modelling experience of the
  partners
• Add the newly constructed environmental, social
  and international modules on the way
• Focus on aspects that are specific on the chosen
  regional level
• Sufficient focus on the exogeneous parameters, to
  balance trade flows, production and consumption,
  migration, etc

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Outline

• Introduction to TML
• Experience in model construction
• Policy indicators
• Linking the three dimensions of sustainability

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Sustainability indicators

• The concepts of sustainability indicators
• Toolkits to guide policy makers.
• Foundation for improved information and data
  collection
• Comparative analysis on national and regional
  state of and progress towards sustainable
  development
• Characteristics of an effective indicator
• Quantitative or qualitative measure derived from
  a series of observed facts
• Point out the directions of change across
  different units and through time
• Identify trends and draw attention to particular
  issues.
• Helpful in setting policy priorities and in
  benchmarking or monitoring performance

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Sustainability indicators

• Scientific
• Measurable and quantifiable they should
  adequately reflect the phenomenon intended to be
  measured
• Meaningful appropriate to the needs of the user
• Clear in value positive or negative
• Clear in content measure in understandable units
• Functional
• Relevant for all stakeholders involved
• Possible to influence Indicators must measure
  parameters that may be modified
• Comprehensive the indicator set should
  sufficiently describe all essential aspects under
  study
• Pragmatic
• Feasible measurable at reasonable effort and
  cost

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Sustainability economic indicators

• Basic indicators
• GDP country, region, sector
• Unemployment country, region, household type
• Consumption per capita, by region, by specific
  class of good, by household type
• Inflation changes in price level
• Other important indicators
• Openness of trade (exports imports) / GDP
• Trade balance (exports - imports)/(exports
  imports)
• FDI as share of total investments, as share of
  GDP
• Government revenues on national, regional level
  by government

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Sustainability enviromental indicators

• Emissions and waste in tonnes (by emission
  type), monetary value (damages), as share of GDP,
  by sector, per capita,
• Resources
• - Land use change in land types, land as
  input to production
• - Stocks of oil and gas available in tonnes,
  monetary value, share of GDP, etc..
• - Other resources forest, minerals, water,
  etc..
• Other environmental/sustainability indicators
• Ecological footprint (CO2 emissions, compared
  to available land for sequestration)
• Environmental pressure index
• Barometer of sustainability

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Sustainability social indicators

• Welfare
• - Equivalent variation based on utility of
  the different consumers, household types
• Income inequality
• - Gini coefficient broad indicator for
  inequality
• - Atkinson index set degree of inequality
  aversion
• - Theil index or related easily decomposable in
  subgroups, on regional level, by household, etc..
• Poverty
• - Monetary poverty always based on a
  pre-defined poverty line (for example 60 of mean
  income, or 50 of median income)
• - 3 Is of poverty (Incidence, Intensity and
  Inequality)
• Progressivity of tax scheme
• Kakwanis index (or variant)

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Outline

• Introduction to TML
• Experience in model construction
• Policy indicators
• Linking the three dimensions of sustainability

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Linking sustainability indicators

• Should we derive a composite indicator for
  sustainability?
• Experience shows that this is really hard
• Different approaches ISEW, Genuine Progress,
  HDI, etc..
• Very difficult to weight different indicators
  (different results for different weights)
• Often not all variables can be calculated from
  the model
• Calculate basic indicators that are easy to
  interpret and can be easily compared to each other

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Linking sustainability indicators

• Which indicators should we certainly use
• GDP
• Unemployment
• Government budget/revenues
• International/interregional trade (openness of
  trade, trade balance)
• Welfare of households (equivalent variation or
  extended index, more relevant to sustainability)
• Environmental indicator or set of indicators,
  focusing on (health) damages from pollution
• Related to land use (change in land types, land
  based production/employment)

Will always be in interest of policy makers
Literature review
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Thank you
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