United Nations
Commission on Sustainable Development

Background Paper

                    The role of models and scenario analysis


                                                       Paragraph       Page

I.       INTRODUCTION.................................... 1 -  5       1 - 2

II.      ASSESSING LONG-TERM TRENDS THROUGH MODELS ....... 6 - 41      2 -16

          A.  Global energy consumption perspectives .... 6 - 18       2 - 7

          B.  Motor vehicles and road transportation ....19 - 24       7 -10

          C.  World demand for metals and minerals ..... 25 - 34      10 -13

          D.  Agriculture and food security ...........  35 - 41      14 -16

III.      METHODOLOGICAL APPROACHES TO MODELING ........ 42 - 74      16 -23

          A.  Structure of models .....................  43 - 63      16 -21

          B.  Assumptions and perspectives of models ..  64 - 69      21 -22

          C.  Limits and limitations ..................  70 - 74      22 -23

IV.       CONCLUSIONS..................................  75 - 78        23

                              I.  INTRODUCTION

1.  Recently, there has been growing recognition of the need for an integrated
approach to inter-locking social, economic and environmental issues.  Such an
approach is especially useful to inform international debate on sustainable
development issues which should take account of differences among various
world regions in socio-economic conditions and priorities.  A typical example
is global climate change.  Over the past few years, multi-disciplinary teams
of scientists around the world have been working in close collaboration on
various aspects of climate change in order to analyze the causes, mechanisms
and impacts of climate change in an integrated fashion.

2.  Work by the Commission on Sustainable Development (CSD) on changing
unsustainable consumption patterns has provided further momentum for the
ongoing efforts at integrated assessment, in particular integrated long-term
assessment.  The deliberations at the CSD have raised a key question - on
today's consumption trends, will our planet be cleaner and healthier in
future, and will future consumption patterns satisfy needs for all while
protecting the environment?  In trying to answer this question, policy-makers
find themselves faced with uncertainties and risks.  While expert judgments
may provide some insights, a more systematic and consistent effort is clearly
required in order to answer the question with an adequate confidence level.

3.  In this regard, recent experience in climate change research suggests that
modeling and scenario analysis can be meaningful tools in helping advance
systematic enquiries.   Models are structured frameworks for organizing
knowledge and enquiries into complex relationships and processes.  For
producing assessment of sustainable development trajectories, there are
several advantages in using models, including i) dynamic analysis of the
interactions between the components of the system under consideration,
following the Pressure-State-Impact-Response (P-S-I-R) mechanism; 1/ ii)
the development of projections and early warnings: models allow for extending
analysis in time and space and implicitly show the dynamics of environmental
processes in relation to social and economic processes and thus may lead to
better informed priority setting; and iii) the translation of uncertainties
into risk analysis in order to assist decision-makers in decision-making under
conditions of uncertainty.  Making uncertainties explicit in the model
projections facilitates the communication of the results to decision-makers
and helps them in identifying major gaps in knowledge and in anticipating the
unexpected. 2/

4.  Scenarios are descriptive images of the future, which are not meant to be
predictions of the future but are hypothetical sequences of events intended to
focus attention on causal processes and decision points.  Scenarios are always
developed for a particular purpose in a particular context and are never
value-free because they reflect the visions of the scenario authors.  The
primary objective of scenarios is to offer a structured basis for debate about
key issues, opportunities and threats with respect to sustainable development,
taking into account different regional and sectoral perspectives and
interests.  While scenarios can be generated by models, they may often be
produced by experts using qualitative judgments. 

5.  As a contribution to the upcoming work on long-term trend assessment
carried out in preparation for the 1997 Special Session of the General
Assembly, this background report serves as an introduction to models and 
scenarios in trend assessment.  The report is not intended to provide in-depth
technical analysis.  Rather, it summarizes selected results so as to give some
ideas of what models can do.  This is followed up by a brief discussion of the
methodologies of models and of their inputs and assumptions.  For the sake of
clarity, a glossary is attached to explain some technical terms. 3/ 


                    A. Global energy consumption perspectives

6.  World energy demand increased at an average annual rate of 2.5 per cent 
between 1970 and 1993.  Commercial energy consumption grew faster in
developing countries than in either developed countries or economies in
transition.  In 1970, developing countries consumed 604 million tonnes of oil
equivalent (toe); by 1993, consumption had risen to 2,317 million toes.  In
developed market economies, demand increased from 2,888 million toes in 1970
to 4,124 million toes in 1993.  Total world consumption of commercial energy
reached some 7,800 million toes in 1993.

7.  Because of its essential role in our economy and its impact on the
environment, energy has been the subject of many modelling efforts.  For
instance, under the Energy Modeling Forum convened at Stanford University,
models with various time horizons were used to explore alternative energy
demand and CO2 emission scenarios.  Most of these models were energy-sector
equilibrium models, although some were aggregate economic equilibrium models.
In addition, some integrated assessment models (IAM) contained sub-models
addressing energy demand.  These IAMs were concentrated on - though not
exclusively confined to - capturing the system impact of climate change. 
Below we present the scenarios generated by some selected models.

     1. The WEC/IIASA perspective study

8.  Building on their earlier efforts, the World Energy Council (WEC) and the
International Institute for Applied Systems Analysis (IIASA) recently
developed six scenarios of energy demand in 2050 and 2100, using 1990 as the
base year. 4/  The analysis was based on the use of several models, and
the six scenarios were grouped into three cases.  Case A depicts a high-growth
scenario; Case B represents a more modest but more realistic outcome; whereas
Case C is "ecologically driven" and assumes unprecedented international
cooperation.  Case A also includes three scenarios addressing key developments
in energy supply, depending on whether oil and gas, coal or renewable will be
the dominant source of supply.  A summary of the results of the three cases is
presented below.

9.  As shown in Table I.1 below, the three cases share the same assumption
about world population.  They also envisage economic growth, though growth
rates are higher in Case A 5/.  The three cases also provide for
continuing progress in energy efficiency, as expressed in declines in energy
intensity.  While improvement rates in Cases A and B are primarily due to
economic growth, Case C incorporates progress achieved through demand side
management and economic instrument, including substantial increases in energy
prices and taxes. 6/ As a result, there are considerable variations in
primary energy demand, with the "ecologically driven" case (Case C) depicting
a scenario of considerably lower demand.  In terms of energy supply and
technology change, Case C also differs from Cases A and B in that it assumes
low availability of fossil fuels and high technology dynamics of non-fossil
fuels.  In addition, Case C assumes the existence of a CO2 constraint and
advocates environmental taxes.  Carbon emissions are consequently much lower
under Case C.

10.  Here it may be interesting to compare the WEC/IIASA CO2 emissions
scenarios with those of the IPCC.  In 1992, the Working Group II of the
Intergovernmental Panel on Climate Change (IPCC) using global models developed
a range of scenarios (IS92 a-f) of future CO2 and other greenhouse gas
emissions based on assumptions concerning population and economic growth, land
use, technological changes, energy availability and fuel mix.  Unlike the
scenario cases developed by the WEC/IIASA study, the IPCC scenarios were
Business-as-Usual scenarios, assuming no mitigation policies and no
significant technological advances.  However, there were considerable
variations in the exogenous assumptions of population and economic growth
underlying the six scenarios.  By the year 2100, CO2 emissions could range
from 6 billion tonnes of carbon per year (IS92c), with low population growth,
to as much as 36 billion tonnes of carbon per year (IS92e), with high
population and economic growth. 7/

           Table I.1:  A summary of three cases in 2050 and 2100
                        (with 1990 as the base year)

                                A              B                  C
                           High Growth   Middle Course  Ecologically Driven

Population a/
  2050                        10.1            10.1             10.1
  2100                        11.7            11.7             11.7

GWP b/
  2050                         100             75               75
  2100                         300             200              220

Energy intensity
improvement c/               medium            low             high
  1990-2050                   -1.0            -0.7             -1.4
  1990-2100                   -1.0            -0.8             -1.5

Primary energy demand /d
  2050                         25              20               14
  2100                         45              35               21

Resource availability
  Fossil                      high           medium             low
  Non-fossil                  high           medium            high

Technology costs
  Fossil                       low           medium            high
  Non-fossil                   low           medium             low

Technology dynamics
  Fossil                      high           medium           medium
  Non-fossil                  high           medium            high

CO2 emission constraint        no              no               yes
Carbon emissions e/
  2050                        9-15             10                5
  2100                        7-22             14                2

Environmental taxes            no              no               yes

Source: WEC/IIASA.

Note: a) billions; b) trillions; c) primary energy/GDP, per cent/yr; d)billion
tonnes of oil equivalent; e) billion tonnes of carbon.

11.  In addition to CO2 emissions, the WEC/IIASA study also calculated
scenarios of sulfur deposition in Europe and South and East Asia, using the
Regional Acidification INformation and Simulation model (RAINS) developed at
IIASA.  Under Case A, a coal-intensive scenario with no abatement, sulfur
emissions in Europe would increase by some 50 per cent over the next 30 years,
and sulfur deposition would exceed 16 g S/m2 per year in large areas of
Central, Western and Northern Europe. 8/ In the rapidly growing economies
in Asia, the coal-intensive scenario suggests that if no abatement measure is
implemented, SO2 emissions in South and East Asia would triple by 2020 and
deposition would exceed critical loads in most of the ecosystems in the
region.  In some areas, the sulfur deposition would exceed the critical loads
of the ecosystems by a factor of ten, with serious implications for food
crops. 9/

12.  Under the policy-intensive ecologically-driven scenario (Case C),
however, sulfur emissions would be much lower, as energy demand would be
lower, and the supply structure would shift to less sulfur containing fossil
fuels. In Asia, for instance, increase in unabated sulfur emissions in the
next two decades would be kept below a factor of two, as compared with the
tripling under the coal-intensive scenario.

     2. The TARGETS/IMAGE energy model

13.  Integrated assessment models usually contain sub-models on energy.  The
TARGETS/IMAGE energy sub-model developed at the National Institute of Public
Health and Environmental Protection (RIVM), the Netherlands is such an
example. 10/The energy model is currently a globally aggregated system
dynamics simulation model.  It has five sub-models: energy demand; supply of
solid, liquid and gaseous fuels and electric power generation.  The model
includes the following features:

     (a)    activity-related demand for heat (in five sectors) and
            incorporating structural economic change;

     (b)    autonomous and price-induced change in energy intensity (energy

     (c)    exploration and exploitation dynamics of fossil fuels, including
            depletion and learning dynamics;

     (d)    price-based substitution of biofuels which are assumed to be
            subject to learning as well as depletion dynamics;

     (e)    electric power generation in thermal power plants, with a non-
            thermal alternative (nuclear, solar) penetrating the market based
            on relative costs and learning.

14.  The TARGETS/IMAGE energy model has been calibrated for the world from
1900 to 1990 and for the USA from 1950 to 1990.  All parameter values are
supposed to be entered for the period 1990-2100.  Currently, the RIVM group is
in the process of analyzing a number of scenarios, including the Business-As-
Usual IPCC IS92a scenario, the Reference scenario of the World Energy Council,
the Sustained Growth (SG) scenario by Shell and the alternative
Dematerialization (DM) Scenario by Shell and the Fossil-Free Energy Scenario
developed by the Stockholm Environment Institute.  Preliminary findings
obtained from simulating some of the scenarios suggest that while scenarios
can individually depict an internally consistent picture of global energy
supply, their perspective-driven assumptions about key variables may lead to
different results.  For instance, the most evident difference between the
IS92a and Sustained Growth scenarios is the reliance on fossil fuel (notably
coal) after 2050 in IS92a and a switch to renewables in the Sustained Growth
scenario.  This difference is mainly caused by a number of perspective-based
key assumptions with respect to renewable energy technologies and power
generation technologies. 11/

     3. Renewables-intensive global energy scenario

15.   In contrast to fossil-fuel based scenarios, exponents of renewable
sources of energy have constructed a renewables-intensive global energy
scenario, with 1985 as the base year. 12/ Using the population and GDP
growth assumptions adopted in IPCC high economic growth scenario, they derived
renewables-intensive scenarios of future electricity generation and direct
fuel use.

16.  In 1985, the world generated 9,239 TWh of electricity from commercial
fuels, of which hydropower generated 1,880.1 TWh of electricity, while nuclear
power generated 1,399.3 TWH of electricity.  Geothermal sources produced a
much smaller amount of electricity - 15.0 TWh.  Expecting global electricity
production to more than double by 2025 and more than triple by 2050 as against
the base year 1985, the scenario producers projected that the share of
renewable energy in power generation would increase from 20 per cent in 1985
(mostly hydroelectric power) to about 60 per cent in 2025, with roughly
comparable contributions from hydropower, intermittent renewables (wind and
direct solar power), and biomass. 13/

  Figure 1: CO2 emissions from fossil fuel use (million tonnes of carbon)
   Comparison of developing countries, industrialized countries, former
            USSR and Eastern Europe, World (1985, 2025, 2050)

                            * Figure here *

17.  The use of fuels for purposes other than electricity generation would
grow by less than one-third.  Contributions by renewables to direct fuel use
could reach nearly one-fourth by 2025 and two fifths by 2050, with most of the
contributions coming from biomass-derived fuels - methanol, ethanol, hydrogen,
and biogas (contribution by renewables to direct fuel use in 1985 was
negligible).  It was also expected that methanol and hydrogen might prove to
be biofuels of choice, as they would be the most adaptable energy carriers in

18.  As a direct result of the penetration by renewables into the energy
systems, global CO2 emissions were expected to decline.  As shown in Figure 1
above, CO2 emissions under the renewables-intensive scenario would be reduced
by 12 per cent by 2025 and 26 per cent by 2050 from its base year level.  In
2050, world CO2 emissions would be 4.2 billion tonnes, somewhat less than
WEC/IIASA scenario (Case C).  Emissions from industrialized countries,
including the reforming economies, would be reduced nearly by half by 2025 and
nearly two-thirds by 2050.  Their share of global emissions would decline from
three-fourths in 1985 to about two-fifths in 2025 and one-third in 2050 (this
holds for nearly all scenarios).  While the relative contributions by
developing countries would rise, their per capita emissions in 2050 would
still be only one-third of those by developed countries.

                   B. Motor vehicles and road transportation

19.  Analysis of the energy sector normally incorporates the transport sector,
since its energy use accounts for a significant share of total energy
consumption.  Recent studies indicate that the transport sector as a whole
(including passenger travel and freight movement by all modes of transport)
accounted for about a quarter of world primary energy use in 1990.  It was
also responsible for 22 per cent of CO2 emissions from fossil-fuel use. 
Prospects for energy demand and emissions by the transport sector depend on a
number of variables, notably GDP growth, income, industrial structure, vehicle
fuel efficiency, lifestyles, and geographic features.

20.  In road transportation, studies of historical relationships suggest that
there would be faster growth in developing regions in the coming two decades,
especially in middle-income and fast growing economies, although in terms of
fleet size and fleet density they would continue to lag behind the high-income
developed countries.

21.  Such projections are reinforced by results of model runs and scenario
analysis, such as the IPCC scenarios, the TARGETS/IMAGE energy-related
scenario and models based on input-output analysis.  Here we introduce one of
the studies using input-output analysis, the World Model. 14/

22.  The World Model was based on the original version of the input-output
model developed by Wassily Leontief. 15/  The model describes the
economy as a system of inter-dependent activities.  It aims at producing
internally consistent multisectoral projections of economic trends and
provides detailed quantitative assessments of both the direct and indirect
effects of policy actions.  In this regard, it also provides specific
scenarios of the environment in the context of economic growth and
technological dynamics.

23.  The World Model divides the world into sixteen regions linked by
commodities trade and flows of capital and aid.  Each region in turn is
described in terms of some fifty interacting sectors.  In the sector of road
transportation, the World Model analyzes relevant trends in 1980-1988 and
generates projections to 2020 (see Table I.2 below).  The Model anticipates a
significant increase in motor vehicle densities (defined as motor vehicles per
100 people) in developing regions, ranging from 2.1 per cent per year in newly
industrializing Latin America, to 5.2 per cent per year in centrally planned
Asia.  Because of population growth these increases will translate into large
percentage increases in motor vehicle fleet.  For instance, between 1988-2020,
motor vehicles are expected to increase by 3.7 per cent a year in newly
industrializing Latin America and 6.2 per cent a year in centrally planned
Asia.  In contrast, little increase is projected for developed regions in
vehicle density or fleet.  But in terms of the sales and fleet sizes,
developed regions will continue to possess more than half of the world
vehicles (55 per cent), as against 78 per cent in 1988.

          Table I.2:  Motor vehicle fleet and density, 1988 and 2020
            (millions of units and motor vehicles per 100 people)

                           1980 a/ and
                           1988/1990 b/          2020           1988-2020 c/
                         Fleet   Density   Fleet    Density   Fleet    Density
North America    (169.1)201.8  (66.3)72.2   243.2    73.2      0.6        0.0

Oceania             (9.5)11.3  (40.1)40.8    22.8    56.9      2.2        1.1

Western Europe   (104.8)133.9  (35.8)45.1   148.8    50.2      0.3        0.3

Japan              (37.9)52.4  (32.4)42.5    66.4    51.1      0.7        0.6

Western Europe     (15.4)23.0  (12.3)16.4    53.0    30.0      2.6        1.9

Eastern Europe     (11.0)16.6   (9.8)14.3    25.4    20.0      1.3        1.1

Southern Africa      (3.5)4.3  (10.8)10.5    10.0    13.7      2.7        0.8

 Latin America     (21.7)29.0   (9.4)10.1    91.9    20.0      3.7        2.1

Former Soviet
 Union             (15.5)24.7    (5.8)8.6    54.9    16.0      2.5        2.0

Major oil
 producers          (6.0)11.9    (3.5)4.8    68.4    12.0      5.6        2.9

 Asia               (4.4)10.8    (1.6)3.3    70.4    15.5      6.0        5.0

 Latin America       (3.5)4.6    (3.2)3.3    12.1     5.1      3.1        1.4

N.Africa and
 other Middle East   (2.5)3.4    (1.4)1.5    13.3     3.0      4.3        2.2

Low-income Asia      (3.4)5.0    (0.3)0.4    44.8     2.0      7.1        5.2

Sub-Saharan Africa   (2.1)2.6    (1.1)1.0     7.2     1.1      3.3        0.5

Centrally planned
 Asia                (0.9)4.3    (0.1)0.4    30.1     2.0      6.2        5.2

World            (411.1)539.8              962.53              1.8

Source: Institute for Economic Analysis based on various studies, as quoted in
Faye Duchin et al, op.cit. 

Note:  a) 1980 figures are provided in brackets for comparison; b) Density is
understated because fleet figures are for 1988, while the population figures
are for 1990; c) 1988-2020 are projections of growth rates expressed as
percentage changes per year.

24.  Average fuel efficiencies are expected to continue to make headway.  By
2020, trucks in developed countries can run 20 miles per gallon, compared with
9.6 miles per gallon in 1987.  Fuel efficiency for cars will improve to 39.8
miles per gallon as against 19.1 miles per gallon in 1987.  If consumers
accept changes in vehicle size and performance, transport energy intensity
could decline by 60-80 per cent in the next thirty years.  For the transport
sector as a whole, improved vehicle efficiency might reduce greenhouse gas
emissions per unit of transport activity by 20-50 per cent in 2025 relative to
1990.  These projections lead to the statement that transport, in particular
public transport is one area where government policies could make a big
difference. 16/

                                               C. World demand for metals and

25.  In addition to energy, commodities represent one sector where there has
been a tradition of forecasts and projections, mainly geared to demand and
supply conditions and possible paths of price fluctuations.  In the 1980s,
consumption of metals in industrialized countries registered further declines,
whereas demand in developing countries kept growing.  The picture at the
global level for most major metals is that of continuing growth (see Table I.3

     Table I.3: World primary production of metals (in 1000 tonnes)

                              1980             1985               1990

Aluminum                     16,064            16,568           19,347
Crude steel                 716.500           386.741          769.800
Copper                        7,540             8,221            8,561
Lead                          3,343             3,181            2,761
Zinc                          6,147             6,466            6,685
Nickel                          757               780              858

Source: As compiled in Detlef van Vuuren.

26.  As regards long-term projections, both economic and integrated system
assessment models have been applied.  For instance, the integrated assessment
model TARGETS includes a Minerals sub-model which models mineral resource use
on a global scale.  The mineral resource is not represented as one group in
the model, but is divided into metals of abundant supply and medium scarce
supply, with each group modelled separately.  In addition, recycling and waste
material fluxes are built into the model. 17/

27.  Essential for the Minerals model is that it is not an independent model
but is functionally linked up with the TARGETS model through an interactive
process, following the Pressure-State-Impact-Response scheme generally used
with the TARGETS model.  The interactive representation scheme allows the
Minerals model to show the possible inputs and outputs of the model to the
rest of the TARGETS, as well as the most important parameter assumptions (see
Figure 2 below) 

28.  The Minerals model has a strong focus on the United States, for which
more historical data are available, thus making it possible to calibrate the
model for this country.  However, there is also a world version in which
mineral resource use is analyzed in regional perspective, and the results of
the United States calibration are translated into the world version, following
the compilation of the world data set.

29.  The world version generates projections of production and consumption of
lead.  The results suggest that in developed countries, lead production and
consumption started to increase from the beginning of the century and surged
after 1945.  After 1975, production and consumption began to stabilize and
even started to fall.  This trend is projected to continue into 2000.  In the
case of developing countries, the picture is somewhat different.  Up till now,
lead production and consumption have been on the rise and are expected to
stabilize before 2000. 

30.  In addition to the integrated assessment models, input-output models were
also used to assess long-term trends and relationships. 18/ In its metal
sector study, the World Model described above derived region-specific input
coefficients of metals, taking into account such variables as future energy
prices, technological changes, economic growth and materials
substitution. 19/

31.  For the developed regions, the Model assumes that the trend toward lower
input coefficients for materials will continue due to product substitution,
improved production processes, materials-saving designs and innovative use of
traditional materials.  The exception is the aluminum coefficients which are
assumed to increase slowly since aluminum is expected to continue to
substitute for steel and copper (See Table I.4 below for detailed breakdowns).

32.  For developing regions, a less uniform picture is expected to emerge. 
For those more advanced developing countries, the copper and steel
coefficients are expected to decline.  For those less industrialized
countries, their materials input structures is likely to move toward the
present input structures of the developed regions.  In some areas, such as
cable communication, they may benefit from the most advanced technology, such
as optical fibers, and see their copper coefficient decline in the coming

33.  For the formerly centrally planned economies, the Model assumes that
there will be a major shift from steel-intensive heavy industry toward
patterns of metal use more typical of consumer goods production.  It is also
assumed the technological gap with the developed market economies will narrow
and there will be increasing incentives to avoid wasting materials.  Steel
coefficients are thus projected to decline rapidly, while the input
coefficients for aluminum will increase more rapidly than in most other

34.  As regards virgin materials, the Model expects their share to continue to
decline relatively slowly.  Much of the metals is used for construction and
infrastructure, and has a long life cycle. The increasing use of composite
materials and alloys also reduces the potentials for recycling.  The Model
therefore expects the share of virgin materials in total metal consumption to
decline at an annul rate of 0.5 per cent for all regions and all metals.

       Table I.4: Changes in gross metal input coefficients, 1990-2020
                     (average annual per cent change)

                      Copper     Aluminum     Nickel    Zinc     Lead    Steel
 North America        -1.50         0.50     -1.00     -0.50    -0.50   -1.00

Newly industrializing
 Latin America        -1.50         0.50     -0.50     -1.00    -1.00   -2.00

 Latin America        -1.00         1.50      0.50     -1.00    -1.00   -2.00

 Western Europe       -1.50         1.00     -1.00     -0.50    -0.50   -1.00

 Western Europe       -1.50         0.50     -0.50     -0.50    -0.50   -2.00

Eastern Europe        -1.50         1.50     -0.50     -0.50    -0.50   -2.00

Former Soviet
 Union                -1.50         1.00     -1.00     -1.00    -1.00   -2.50

Japan                 -1,50         0.50     -1.00     -0.50    -0.50   -1.00

Centrally planned
 Asia                 -1.50         1.00     -0.50     -1.00    -1.00   -2.75

Newly industrializing
 Asia                 -1.50         1.00     -0.50     -1.00    -0.50   -2.00

Low-income Asia       -0.50         1.50     -0.50      0.00     0.00   -1.50

Major oil
 producers            -1.50         0.00      3.00      0.00    -0.50   -2.75

N.Africa and other
 Middle East          -0.50         1.00      4.00      0.00    -0.50   -1.00

 Africa               -1.50         0.00      0.00     -1.00     0.00   -2.00

Southern Africa       -1.50         0.50     -0.50     -0.50    -0.50   -1.00

Oceania               -1.50         0.50     -0.50     -0.50    -0.50   -1.00

Source: Institute for Economic Analysis projections, as cited in Faye Duchin
et al, op. cit.

                      D.  Agriculture and food security

35.  For planning and food security purposes, models have also been used in
assessing prospects for future food and agricultural production and supply. 
The 20 year perspective study by FAO represents one such effort. 20/

36.  The overall approach under the FAO study was to start projections using
Engel demand functions and exogenous assumptions of population and GDP growth,
with 1988/1990 as the base year. This was followed by projections of
production using provisional targets for each commodity and country.  For
cereals, livestocks and oilseeds sectors, a formal flex-price model (the FAO
World Food Model) was used to provide starting levels for iterations and to
keep track of changes in variables.  The World Food Model itself is composed
of country modules and world market feedbacks leading to market clearing
through price adjustments.  Throughout this process, specialists for specific
commodities, countries and disciplines were consulted for expert judgment. 
The results of the perspective study may be described as a set of projections
which meet conditions of accounting consistency and reflect views expressed by
country and commodity specialists.

37.  Under the FAO perspective study, world availability of food and
agricultural products (expressed as calories/caput/day) will increase from
2700 cal/caput/day in 1988/90 to 2800 cal/caput/day in 2010 and 3000
cal/caput/day in 2025.  In 2010 considerable gaps in food consumption will
remain between developed (3470 cal/caput/day) and developing countries (2740
cal/caput/day). 21/  By 2025, the consumption level in developed
countries is expected to remain at the 2010 level while that of developing
countries will increase to 2900 cal/caput/day.  However, this scenario will
materialize only if the developing regions with low per caput food
availability succeed in increasing their food production substantially or
other regions have surplus and trade flows can be generated to match regional
surpluses and deficits.

       Figure 3:  Consumption of forest products, 1990 and 2010
            Comparison of developed and developing countries

                             ** Figure here **

38.  The FAO study projects only marginal increases in marine fish captures. 
As a result of overfishing in recent years and the declines in fish stocks,
total marine catches are not likely to exceed 100 million tonnes in 2010, as
compared with 86 million tonnes in 1989/91.  Fisheries differ from other
sectors of agriculture in that it is more difficult to relax the production
constraints by merely investing in technology and exploration.  This means
that increases may have to come from aquaculture, which may become very
important to sustaining growth.  Assuming the growth rate of the last few
years continues, the study expects world aquaculture production to increase to
20 million tonnes in 2010 from the 1990 level of 12 million tonnes.

39.  For forest products, projections for consumption are based on the
estimated relationships between economic and population growth and growth in
demand for forest products.  For developing countries, growth is projected to
be approximately equal to their economic growth (5 per cent per annum), while
consumption in developed countries is likely to lag behind economic growth,
given the high average consumption level prevailing now.

40.  Developed countries are likely to increase industrial roundwood
consumption from 1,270 million m3 in 1990 to 1,900 million m3 in 2010.  For
developing countries, roundwood consumption is expected to increase from 380
million m3 in 1990 to 800 million m3 in 2010.  Similar growth rates are
projected for paper consumption, with developed countries increasing paper
consumption from 196 million tonnes in 1990 to 310 million tonnes in 2010. 
Paper consumption in developing countries is expected to grow to 130 million
tonnes in 2010, up from a low level of 42 million tonnes in 1990 (See Figure 3

41.  The growing demand for forest products, combined with the expected
expansion of agricultural land into forest areas, is expected to accelerate
deforestation in developing countries.  Driven by worsening incidence of rural
poverty, landless farmers may claim land from forest areas at a higher rate
than warranted by the required growth in production.  In addition,
deforestation is projected to continue, aggravating land degradation.  Of the
1.2 billion hectare of degraded land worldwide, deforestation and overgrazing
are estimated to account for two-thirds.


42.  The preceding section presented scenarios of selected consumption trends
generated by different models.  In this section we take a look at the models
themselves, and examine their differences in methodological approaches by
focusing on their structures and input assumptions.

                              A.  Structure of models

43.  The last two decades have witnessed much progress in modeling, especially
in the macroeconomic, environmental, energy, agriculture and transportation
sectors.  One way of comparing these models is to divide them into two large
categories - "top-down" and "bottom-up" models. 

     1. "Top-down" models

44.  "Top-down" models are econometric models of the aggregate economy.  They
usually contain rather aggregate sectoral demand functions based on economic
indices of prices and elasticities.  They aim at capturing the overall
macroeconomic impact of policy variables.  Their key structural features
include endogenization of behavioral relationships and incorporation of large
economic components (such as investment, trade, consumption and income
distribution). 22/ But their description of specific sectors, such as
energy or agriculture, is limited.  Consequently, while "top-down" models have
strong orientations toward economy-wide effects, they are considered weak in
exploring technological options and potentials at the sectoral level.

45.  In the IIASA/WEC energy perspective study, an energy-economy interactions
model called 11R was used to check for consistency between macroeconomic
development and energy demand.  11R is a modified version of Global 2100 model
originally developed by Manne and Richels in 1992 and subsequently widely used
in energy studies throughout the world. 23/ However, the "top-down"
models have been criticized for failing to describe adequately the underlying
determinants of sectoral demand dynamics.  

  2. "Bottom-up" models

46.  Traditionally "bottom-up" models have been used to study the dynamics of
a given sector, such as agriculture or energy.  They adopt a more 
disaggregated approach to demand and supply and provide for technological
changes.  They contain more detailed and precise descriptions of parameters,
such as end use patterns and technological alternatives, but no treatment of
feedbacks between the parameters and underlying economic variables.  Because
of this lack of economic behavioral feedbacks, "bottom-up" models are
considered best suited for simulation analyses to explore, for instance, the
efficiency effects of the introduction of a given set of new technologies.

47.  "Bottom-up" models can more easily be prescriptive because they examine
the dynamics of introducing alternative technologies or practices, including
"best practice" or "state-of-the-art".  Models that explore the system-wide
introduction of renewable sources of energy normally fall under this approach.

In contrast, a "bottom-up' model that adopts a descriptive approach will
explore technological alternatives and individual practices that result from
actual decisions.  They tend to be less optimistic about normative policy

48.  In the WEC/IIASA study, a "bottom-up" model called MESSAGE III was used
to generate detailed estimates of energy demand and supply.  MESSAGE III is a
dynamic linear optimization model, calculating cost-minimal supply structures
under the constraints of resource availability, given technologies and demand
for energy.  The WEC/IIASA study used both the "top-down" and "bottom-up"
models in order to capture the benefits arising from different model
structures and perspectives.

49.  Another "bottom-up" model that has been applied for policy purposes is
the ESCAPE model, developed for the European Union through a collaborative
effort involving experts from Britain and the Netherlands. 24/  The
ESCAPE (Evaluation of Strategies to address limate change by Adaption to and
Preventing Emissions) model consists of suite of models (modules) which
enables scenarios of greenhouse gas emission to be constructed and their
impact on global and regional climate and sea level and sectors of the
European economy to be assessed.  The default time step is five years and the
projection extends from 1900 to 2100. 

50.  The ESCAPE model comprises four inter-linked modules, including an
emissions module, two integrated climate modules and a climate change impacts
module, all developed by RIVM in the Netherlands and institutes from UK. The
results of the model calculations highlighted three important characteristics
of the global climate change problem: past emissions of greenhouse gases and
the inertia of the global development path have committed the world to future
warming irrespective of current and near-future policy interventions; the
efficacy of a climate policy implemented solely within the EC on altering the
course of future climate change is very small; and the impacts of climate
change on the economy and environment of the EU differ markedly between
northern and southern Europe.

     3.  Integrated Assessment Models (IAM) 

51.  Despite the progress in econometric and sectoral modelling, the search
for a comprehensive grasp of the natural and human systems gave rise to
integrated assessment models (IAM).  The practice of separating human and
natural systems as embodied in traditional economic and sectoral modelling has
proved inadequate to capture the dynamics of global changes. 25/

52.  IAMs provide a framework for co-ordinating research in different
disciplines.  The exercise may generate unique insights about key policy
questions that are hard to come by through aspect-compartment oriented
research.  The integration process itself allows researchers to coordinate
assumptions from different fields and introduce feedback mechanisms
unavailable in individual discipline-based assessments.  This can be achieved
by linking relevant component modules in a computer program through formal
mathematical representation.  The TARGETS/IMAGE models presented above are
examples of such models.  In the IIASA/WEC study, integrated assessment models
were used to help determine SO2 and NOx emissions and land use changes ( See
Appendix 1 for a summary characterization of IAMs).

53.  IAMs are recognized to have several advantages.  Among others, they
provide a comprehensive setting necessary for systematic assessment of long-
run dynamics.  For instance, integrated assessment helps place the phenomenon
of climate change in the broader perspective of global change, which include
all human interventions and responses.  Secondly, IAMs help identify gaps in
knowledge and information in individual disciplines and reset priorities for
decision making accordingly.  Thirdly, IAMs help identify and clarify sources
of uncertainties, and transform them into risk analysis to assist in decision-
making under uncertainty. 26/

54.  As a young discipline, IAMs have their own disadvantages.  Because IAMs
are intended as a means of capturing the entire cause-effect chain of a system
under consideration, they are prone to an accumulation of uncertainties,
affecting the reliability of results.  Furthermore, though linked up, sub-
models of IAMs have yet to be fully integrated to reflect full systemic
interactions among the various components of human and natural systems.

55.  IAMs are a rapidly evolving field.  Growing research interest and
increasing applications in policy context will undoubtedly strengthen them. 
Yet it needs to be borne in mind that findings of IAMs depend a lot on the
findings of sector/discipline-oriented studies.  The quality of integrated
assessments will be enhanced when gaps and weaknesses in individual
disciplines are remedied.  This will allow a more precise representation of
variables underpinned by the knowledge in corresponding domains.

     4. Global input-output model

56.  In input-output analysis, an input-output table is used to provide a
systematic picture of the flow of goods and services among the producing and
consuming sectors of the economy. It also registers the flows of goods and
services out of a given region and the flow of goods and services into the
receiving region.

57.  The input-output model, pioneered by Wassily Leontief, is considered well
suited for analysis of inter-dependent relationships, such as inter-industry
activities.  The World Model described above in the transport and minerals
sections was based on a slightly modified version of the original input-output
model.  Although an economic model, the input-output approach differs from the
mainstream general equilibrium models.  Eschewing the equilibrium perspective,
the World Model seeks to represent the activities of a real economy and arrive
at quantitative results. 27/

58.  The input structure of the producing sector is expressed in terms of a
set of technical coefficients specifying the amount of goods and services
required to produce a unit of outputs. There is also a separate set of capital

coefficients describing the required capital stock.  The inputs of primary
resources, such as land, water and minerals, are also depicted and analyzed
along with the production and consumption of ordinary goods and
services. 28/

59.  A key feature of the input-output analysis is considered to lie in its
empirical content of the data (although from an operational perspective this
can become a disadvantage, as they are date-intensive, requiring a lot of
effort in data collection).  Unlike general equilibrium models, in which all
major relationships are represented by mathematical equations, the detailed
description of technological choices embodied in technical coefficients brings
the model closer to the real economy.  In addition, the model allows greater
openness to multidisciplinary collaboration than equilibrium models.

     5. Econometric model plus expert judgment

60.  In the FAO perspective study of world agriculture, use of models is
combined with expert judgment to produce projections, which is often the case
in scenario development and analysis.  A significant part of the research
effort is initially devoted to assembling a consistent set of historical and
base year data, covering each individual country and commodity.  This makes it
possible to construct an overall quantitative framework for demand-supply
analysis, based on supply utilization accounts (SUA). 29/ Subsequently,
SUAs for the year 2010 are drawn up, by commodity and country.  For the
cereals, livestock and oilcrop commodities, the projections were derived from
a multi-commodity, multi-country flex-price model (World Food Model).  The
model contains demand and supply equations for each country.  Trade flows
provide the dynamics between domestic and world markets.  The world market in
turn is cleared through price adjustment.

61.  The initial projections thus generated by the model are subjected to
inspection by specialists.  Adjustments are then made by fine-tuning the
model's parameters and coefficients, mainly those related to the supply side,
(production and trade parameters).  This process of iterative computations
underpinned by expert opinions continues till the final round when the world
demand, production and trade balances are fully adjusted. 

62.  The end result of this mixed methodological approach is therefore
supported by detailed country/commodity quantitative analyses.  The world
picture can be decomposed back into constituent single country or commodity
statements.  This feature is regarded as a strong point of the study since
most global studies are carried out at the level of regions and major
countries, with the major products grouped into a few commodity
aggregates. 30/

63.  However, the heavy dependence on great detail and expert input is also
considered a major weakness of the mixed approach.  Projections based on
specialist input suffer from the lack of uniformity and standardization of
assumptions and criteria.  As a result, they cannot be reproduced; nor can
they be used to estimate alternative scenarios by varying certain
assumptions. 31/

                     B. Assumptions and perspectives of models

64.  It is clear from the preceding discussions that model assumptions of
dynamic variables and parameters play an essential role in determining the
output of the model runs and in exploring alternative scenarios.  To a large
degree, formulation of such assumptions represents one key channel of infusing
model builders' knowledge, judgments and values into the model.

65.  Assumptions affect the outcomes of models both implicitly and explicitly.

In selecting model types and determining the structure of the model, model
builders' assumptions of the large picture are automatically embedded in the
mathematical structure of the model.  For instance, economists tend to prefer
"top-down" models which endogenize behavioral relationships and allow for an
economy-wide evaluation of changes in policy variables.  Engineers are likely
to build " bottom-up" models which enable them to make more detailed
statements about a specific sector and explore the dynamics and potentials of
technological options.

66.  In the energy sector, for instance, the "top-down" approach embodies the
"economic paradigm", which tends to be less optimistic about the potentials
for energy efficiency gains to be found in the best available technologies. 
Economists argue that there may be reasons why consumers have not adopted the
optimal technologies (cost or price factors).  Engineers, on the other hand,
seem to rely more on the "engineering paradigm", pointing to evidence that
shows the energy efficiency gap - the gap between the energy efficiency of
equipment actually chosen by consumers and the efficiency of the best
available technology.  They are therefore more optimistic about the
technological dynamics.

67.  When model preferences are decided on, assumptions about key variables
and inputs may affect model outcomes more explicitly.  For instance, while all
models include population and economic growth assumptions, and have similar,
if not identical values, they may disagree about many other variables.  In the
energy sector, varying assumptions of fossil fuel supply, price and income
elasticities of demand, fuel substitutions and technological dynamics may well
lead to divergent and opposing outcomes.  The ongoing debate about the
autonomous efficiency improvement is a case in point. 32/  In the food
and  agricultural sector, continuing increases in output may depend on
availability of land and high-yield varieties (both assumptions are however
surrounded  with uncertainty). 33/

68.  The increasingly complex problems models are expected to tackle
inevitably mean that there may be more possible outcomes and hence more
scenarios to be simulated.  Assumptions are accordingly varied in order to
match the complexity.  In addition, under normative scenarios, assumptions can
be policy intensive.  For instance, under the ecologically-driven scenarios,
the final outcome may hinge on policy measures in energy investment (in favor
of renewables), and on whether energy and carbon taxes are levied or not.

69.  That scenarios can be perspective-driven accentuates the issue of values
and perspectives of model builders.  To what extent are the model structure,
assumptions and outcome affected by the values of model builders?  Most
probably, there is no uniform answer to this question.  But a number of
criteria can be used to judge the soundness of scenarios.  These may include
comprehensiveness (whether environmental, economic, social and cultural
dynamics are covered at sufficiently detailed levels); diversity (whether
different interests and opinions are represented); and methodological
soundness (whether transparent, consistent, and reproducible). 34/

                        C. Limits and limitations

70.  As noted in the introduction of this background report, the need for an
integrated approach to the inter-locking issues of the environment, economy
and society has pushed researchers toward a more structured investigation into
the vastly complex process of dynamic interactions between the human and
natural systems.  The emergence of integrated assessment models represents an
attempt to improve and strengthen the societal response.  Increasingly,
modeling and scenarios analysis will become the knowledge and information
basis for policy making, as already illustrated by the role of the RAINS model
in controlling transboundary air pollution in Europe.

71.  However, there are limits to the use of models, recognized by every model
builder.  In many areas, our state-of-the-art knowledge may simply be
inadequate to allow us to project the future course of events with a
sufficiently high level of confidence.  The fact there are six different
business-as-usual scenarios of carbon emissions (IPCC IS92a-f variants) is
evidence of the uncertainties associated with the current state of our
knowledge.  However, climate change negotiations making use of scientific
enquiries, including modeling exercises, do demonstrate that models can assist
in policy making by transforming uncertainties into risk management.

72.  Past experiences also suggest that sectoral and econometric models have
their respective limitations, as briefly mentioned above.  The tendency to
move toward the middle ground by builders of both "top-down" and "bottom-up"
models (hybrid models) indicate that progress is being made.  The rise of
integrated assessment models will certainly accelerate this movement.

73.  Recent emphasis on changing consumers' behavior also brings into focus
the need for models to incorporate such variables as consumption values and
lifestyles, which are being increasingly recognized as underlying factors of
consumer behavior of the same weight as that assumed by income and price
changes.  The difficulties in expressing these variables in equations amenable
to estimation represent a technical as well as a scientific challenge to model

74.  Furthermore, some global models have been criticized for treating the
developing economies as if they will embark on the same growth path as that
followed by developed economies.  While economic and regional groupings may
help alleviate that concern, the assumptions about uniform economic structures
and identical patterns of behavioral relationships could result in outcomes
wide of the mark.

                              IV.  CONCLUSIONS

75.  This summary of selected models and scenarios and the brief discussion of
methodological approaches show that models are not truth machines that give
definite answers, but rather tools for organizing knowledge and structuring
analytical processes, which allow us to explore possible future options, and
gain a better insight into complex problems.

76.  Scenarios are descriptive and not prescriptive images of the future,
meant to project what may happen under several alternative development
pathways and to evaluate the social, economic and environmental costs and
benefits of different strategies.

77.  The development of a consistent set of scenarios and a coordinated data
management system would help integrate different subsystems in a coherent

78.  Use of integrated models in the development of long-term projections
allows for analysis and evaluation of systemic dynamics and trade-offs between
social, economic, and ecological developments, which may lead to better
informed priority setting.  The growing interdependence of the environment and
socio-economic development, coupled with increasing maturing of IAMs, point to
a potential role of IAMs in helping to map out the future course of
sustainable development.


Autonomous energy efficiency improvement (AEEI)

AEEI refers to improvement in end use energy efficiency not caused by or
related to increases in fuel prices.  They normally arise form technological
development, improved processes and demand-side management.


Matching various relationships in the model to available historical data, and
bringing the individual relations together into a model and demonstrating that
the model reproduces the historical behavior of certain variables.


A variable that is calculated internally by the model is endogenous.  Once the
model is initialized, no further information or step is required and the model
is programmed to calculate automatically.


Opposite of the endogenous.  Information or variable that is calculated
outside the model are fed by the model builders into the model to do the

General equilibrium model

In contrast to partial equilibrium model, which examines one market or sector,
holding other parts of the economy constant, general equilibrium model (where
demand always equals supply), is more sophisticated in conception and
mathematical formulation, regards the economy as a whole system, and requires
the simultaneous determination of all prices and quantities of all goods and
service in the economic system.

Parameter and variable

A quantity which remains constant in a given context is a parameter, and which
changes is a variable.  For instance, in the equation Y = a + bX where X and Y
are variables and a and b are constants and the parameters of the equation.


A method by which a range of alternative scenarios are generated based on
varying assumptions about future situations in order to answer "what if" type
questions.  In practice, this is usually achieved through altering the values
of exogenous variables and parameters.  It is considered well adapted for
assessing the likely impact of policy alternatives. 

                      Appendix 1.  Summary Characterization of IAMs

                         (By Jan Rotmans and H.Dowlatabadi)


1/   P-S-I-R refers to the driving forces, the changing states of the
environment and socio-economic system, the systemic impacts, and the societal
response to the changes.

2/   In the process of communication, models are often presented as reality,
while in fact they are analytical tools, albeit sophisticated ones.  Indeed,
models usually have a large degree of uncertainty, and their results should
not be interpreted as definite answers but rather as explorative indications
of possible options.  For a more detailed discussion, see Jan Rotmans, Models
for Sustainable Development, a discussion paper presented at an expert/policy-
maker meeting organized by the Division for Sustainable Development in
February 1996, New York. 

3/   The selection of the models is carried out among the most recent studies
done with models, partly depending on materials available, and partly on the
range of issues covered in the trends section of the consumption report.  It
does not in any way constitute approval or otherwise by the Department for
Policy Coordination and Sustainable Development of the models introduced in
the report.

4/   World Energy Council and International Institute for Applied Systems
Analysis, Global Energy perspectives to 2050 and Beyond, 1995 report.

5/   For the period of 1990-2020, Case A envisions an annual growth rate of
2.7% for the world economy.  Cases B and C share the same assumption - 2.2
%/yr.  For the period of 2020-2050, Case A projects an annual growth rate of
2.6 %, while Cases B and C suggest an annual growth rate of 2.0 and 2.1 %, 

6/   For OECD countries, Case C projects energy intensity declines by 2.0 %
per year between 1990-2050, as against 1.2 and 1.1 % under Cases A and B.  For
economies in transition, all three cases depict a higher rate of improvement
compared with either OECD or developing countries.  Within developing
countries, the dynamics of energy intensity improvements vary in accordance
with growth prospects and per capita GDP. 

7/   Subsequent studies which had a better grasp of regional implications
basically confirmed the scenarios developed in 1992.  In more recent studies,
the IPCC Working Groups used carbon cycle models to derive scenarios of
accumulated CO2 emissions and to explore various stabilization paths.

8/   The Second Sulfur Protocol of the European Convention on Transboundary
Air Pollution (UN ECE, 1994) provides for measures to lower maximum excess
deposition of sulfur to below 3 g S/m2 per year.   The level projected in the
RAINS scenario is therefore a very high deposition level. 

9/   Critical loads are defined as the maximum deposition levels at which
ecosystems can function sustainably.  The values of critical loads vary in
accordance with the ecosystems affected.  The development of the critical load
concept in recent years has helped define the configuration of the debate on
sustainable development, highlighting the growing prominence of the sink
function factor in decision-making.

10/   TARGETS/IMAGE stands for Tool to Assess Regional and lobal Environmental
and Health Targets for Sustainability and Integrated Modeling to Assess the
Greenhouse Effect, respectively. For a more detailed discussion, see Rob
Swart, Marcel Berk, and Bert de Vries, Long-term Scenarios for Global
Sustainable Development: A Basis for Structured Debate, paper presented at the
United Nations University Conference on the Sustainable Future of the Global
System, Tokyo, 16-18 October 1995. 

11/   For a detailed description of the key characteristic of the world energy
scenarios simulated by the RIVM using the TARGETS/IMAGE energy model, see the
Appendix 1 of the paper presented by Swart et al at the UNU conference. 

12/   Thomas B. Johansson, Henry Kelly, Amulya K.N. Reddy and Robert H.
Williams, " Renewable Fuels and Electricity for A Growing World Economy:
Defining and Achieving the Potential", in Thomas B. Johansson et al (eds),
Renewable  Energy: Sources for Fuels and Electricity, Island Press, Washington
D.C., 1993.

13/   It was assumed that the share of natural gas in power generation would
nearly double by 2025 from its 12 percent share in 1985.  The dissemination of
advanced gas-fired gas turbine power generation would add to the flexibility
to power generation systems so that electrical output could be adjusted
quickly in response to changes in the output of intermittent power generation.

14/   The World Model is an input-output model of the world economy, a version
of which is used in scenario analysis by Faye Duchin and Glen-Marie Lange. 
See Faye Duchin and Glenn-Marie Lange, The Future of the Environment:
Ecological Economics and Technological Change, Oxford University Press, 1994.

15/   Professor of Economics at New York University who was awarded the Nobel
Prize in Economic Science in 1973 for his pioneering work in analysis of the
interdependencies within an economic system applying the input-output

16/   Experiences in several cities show that with appropriate measures in
place, urban transport could be greatly improved, reducing car use, congestion
and improving air quality.

17/   See Detlef van Vuuren, Modelling Metal Resource Use: Documentation,
Calibration and Extension of the TARGETS Minerals Model, RIVM/Global Dynamics
and Sustainable Development, 1995.

18/   See, for instance, Wassily Leontief et al, The Future of Nonfuel
Minerals in the U.S and World Economy: Input-Output Projections, 1980-2030,
Lexington Books, 1983.

19/   Coefficients for past years were derived from accounting data by
separately estimating the numerator (metal consumption by a given sector in a
particular region) and the denominator (corresponding sectoral output). The
metal input coefficients were calculated for the United States, for which
consumption data were available for 1980 and 1987 and the coefficients for
other regions were derived from them.

20/   See Nikos Alexandratos, World Agriculture: Towards 2010, published by
FAO and John Wiley & Sons, 1995.

21/   The 1988/90 availabilities for developed and developing countries are
3400 calories/caput/day and 2470 calories/caput/day, respectively.

22/   "Top-down" model may be further divided into neo-keynesian macroeconomic
models and computable general equilibrium models.  The former incorporates
econometrically-estimated sets of equations that keep track of the short- and
medium-terms dynamics of economic aggregates and related economic activities. 
Such models simulate aggregate potential output as a function of aggregate
inputs of capital, labour and materials.  The general equilibrium models focus
on long-term analysis.  They rely on the resource allocation principle and
market clearing mechanism for all goods by equating prices with marginal
costs.  Capital accumulation and exogenous growth of factors of production
provide the dynamics of the models.  Instead of using econometric estimations,
the models are benchmarked to a base year to guarantee the consistency of the

23/   Global 2100 is one of the models used in the Energy Modeling Forum(EMF).

All EMF models are considered "top-down" models.  See Manne, A, and R.
Richels, Buying Greenhouse Insurance; The Economic Costs of CO2 Emission
Limits, MIT Press, Cambridge, USA, 1992.

24/   For a detailed introduction of the model, see Jan Rotmans, Mike Hulme
and Thomas E Downing, Climate change implications for Europe: An application
of the ESCAPE Model, Global Environmental Change, 1994 4, pp. 97-124.  

25/   For a comprehensive treatment of past examples of IAMs as well as an
overview of the current integrated assessment modelling activities, see Jan
Rotmans and H. Dowlatabadi, Integrated Assessment of Climate Change:
Evaluation of Methods and Strategies, 1995.

26/   Ibid.

27/   See Faye Duchin and et al, op.cit., pp. 5-7.

28/   The inclusion of natural inputs into the model means that environmental
assets are considered, which is a step forward.  However, the feature of fixed
coefficients also makes it difficult to capture the dynamics, and works
against long-term projections.

29/   The SUA is an accounting identity showing the sources and uses of
agricultural commodities in homogeneous physical units.  It is expressed as
Food (direct)+Industrial non-food uses+Feed+Seed+Waste=Total domestic
use=Production+(Imports-Exports)-(Opening stocks-Closing stocks).

30/   See Nilkos Alexandratos, op.cit., pp. 407-419.

31/   It is envisaged that future efforts at improving the methodology of the
perspective study will aim at introducing some advantages of formal models,
such as explicit statements of the assumed behavioral relationships, empirical
verification, replication of results and derivation of alternative scenarios
in a consistent manner.  The strong points of the present approach will
however be preserved. These include the details of analysis regarding
individual countries, commodities and supply constraints, as well as the
opportunity for using multidisciplinary input and expert judgments.

32/   It is often argued that with easy options in both demand and supply side

management being exhausted, potentials for autonomous efficiency improvement
may have been overestimated, and improvement rates are likely to decline. 
Furthermore, without substantial investment, developing countries are unlikely
to achieve improvement rates as envisaged in some models.  

33/   All these assumptions are also made (mostly implicitly) in assessments
that do not make use of models (they are locked in the mental models of
experts).  The advantage of using models is that the consistency of these
assumptions can be checked and validated and made more explicit.

34/   See Rob Swart et al, op.cit, pp. 3-6.


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Date last posted: 3 December 1999 10:27:35
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