The Process of Incorporating Energy Data into GTAP by Truong P. Truong

 Release 3 GTAP 4E (8 Oct 99)  IEA volume data updated to 1997 (by Christophe Complainville)  energy price data indexed to 1997  process is now standardized, automated and ready for incorporation into GTAP 5 Current status

Strengths  GTAP 4E is more ‘consistent’ with the energy volume, price, and tax information than is the standard GTAP 4,  more comprehensive information on energy taxation in GTAP 4E than in GTAP 4

Weakness  The process of integration of the energy data into GTAP 4E is still ad hoc, incomplete (some regions do not converge) and lacking in a firm theoretical direction

 Improvements on methodology is needed  in particular, the convergence process in FIT-E needs to be examined Future direction

 IEA volume data and GTAP I/O data are constructed along different lines:  IEA: ‘commodity’ physical flow, or ‘material balance’ approach  GTAP: ‘transactions’ accounting by ‘establishment’ units Methodological issues

Examples of differences: cost structure  IEA : no other fuels can be used in the production of primary fuels (coal, gas, oil), except itself; only crude oil is used to produce p_c.  GTAP: cost structure may reflect establishment expenditure pattern, rather than physical production process; and each establishment may engage in more than one activity.

Cost structure in energy sectors

Cost structure in non-energy sectors

Examples of complementarity: sales or usage pattern  IEA usage pattern (of specific energy commodity) can be used to throw light on GTAP’s classification of establishments (to various sectors), and vice versa,  This can lead to: manual adjustments (re- classification of certain flows), or automatic adjustments (‘targeting’ of GTAP sales structure in FIT-E).

Examples of complementary information

 ‘Forcing’ the IEA framework onto the GTAP database may be inappropriate:  avoid ‘targeting’ GTAP 4 cost structure by using IEA ‘production technology’ information Conclusions

 Should look at ways of using the the two data bases in a more ‘complementary’ fashion:  IEA data to cross check on GTAP ‘establishment’ classification, and vice versa; IEA usage pattern for use in ‘targeting’ of GTAP sales structure. Conclusions (ctd.)