ET2050 The SASI Model Michael Wegener ET2050 Project Group Meeting, Milan, 7-8 February 2013

2 The SASI Model

3 The SASI model There are three methods to model the impacts of policies on regional economic development: Multiplier effects of infrastructure invest­ ments (Aschauer, 1993) Regional production functions incorporating infrastructure as production factor (Jochimsen, 1966; Biehl, 1986, 1991) Interregional trade flows as a function of interregional transport costs (Peschel, 1981; Bröcker, 1995) and input­output linkages (Echenique, 1990) and economies of scale (Krugman, Venables,1995) SASI

4 The SASI model The SASI model is a recursive­dynamic simulation model of socio­economic development of regions in Europe under assumptions about European economic development and external net migration European transport policies (TEN-T) and regional subsidies (EFRE, CAP) The SASI model differs from other regional economic models by modelling not only production (the demand side of regional labour markets) but also population (the supply side of labour markets).

5 Regional production function In state­of­the­art models of regional development based on production functions the classic production factors land, labour and capital are replaced by location factors, such as: Economic structure Productivity Accessibility Labour supply Services Settlement structure Research and development Education Quality of life

6 Regional production function Extended production function: where A i is potential accessibility: Production AccessibilityLand LabourCapital Others Travel cost between regions i and j Destinations in region j Accessibility of region i

7 Regional net migration function Net migration function: where q i (t–3) is GDP per capita of region i q(t-3) is average European GDP per capita v i (t–3) is quality of life of region i v(t-3) is average European quality of life … all lagged by three years Attractiveness as place to work Attractiveness as place to live Net migration of region i in year t

8 GDPAccessibility Production function Employment Migration function Population Income Labour force Unemploy­ ment SASI model Transfer policies Transport policies

9 SASI model Regions

10 The AlpenCors Project: a Regional Application

11 The AlpenCorS project (2004­2005) The Interreg III B programme "Alpine Space" (2000­2006) aimed at developing a concept for economic and spatial development in the pan­ European Corridor V between France, Italy, Slovenia and Austria. The project AlpenCorS ("Alpen Corridor South") focused on the central segment of the corridors south of the Alps. The SASI model was to assess the effects of the intersection with Corridor I, the Brenner Corridor.

12 GDP per capita (EU27+2 = 100) Scenario Reference Scenario  Trento  Bolzano  Venezia  Zürich  Torino  Milano  Lyon Wien  München  Strasbourg   Ljubljana GDP per capita (EU27+2 = 100) Scenario Reference Scenario

13  Trento  Bolzano  Venezia  Zürich  Torino  Milano  Lyon Wien  München  Strasbourg   Ljubljana Accessibility road/rail/air travel Scenario Reference Scenario  Trento  Bolzano  Venezia  Zürich  Torino  Milano  Lyon Wien  München  Strasbourg   Ljubljana Accessibility road/rail/air travel Scenario AS1 v Brenner tunnel effect

14  Trento  Bolzano  Venezia  Zürich  Torino  Milano  Lyon Wien  München  Strasbourg   Ljubljana Accessibility road freight Scenario AS1 v Brenner tunnel effect  Trento  Bolzano  Venezia  Zürich  Torino  Milano  Lyon Wien  München  Strasbourg   Ljubljana GDP per capita (EU27+2 = 100) Scenario AS1 v Brenner tunnel effect

15 The STEPs Project: a European Application

16 The STEPs project (2004­2006) The EU 6th RTD Framework project STEPs (Scenarios for the Transport System and Energy Supply and their Potential Effects) developed and assessed possible scenarios for the EU transport system and energy supply of the future. In the project five urban/regional models were applied to forecast the long­term economic, social and environmental impacts of different scenarios of fuel price increases and different combinations of infrastructure, technology and demand regulation policies.

17 STEPs Scenarios The scenarios combined three rates of energy price increases with three sets of policies: * € of 2008 per litre A­1 Reference Scenario €* €* €* €* €* €*

18 European policy scenarios A1­C1Infrastructure and technology ­ Petrol/Diesel per km (down to ­4 % p.a.) ­ Alternative vehicles/fuels (up to 33 %) ­ European rail speed (up to +2 % p.a.) ­ Regional rail speed (up to +1.7 % p.a.) ­ Rail freight speed (up to +2 % p.a.) A2­C2Demand regulation ­ Fuel tax (up to +5 % p.a.) ­ Kerosene tax (up to 200 % of petrol tax) ­ Road pricing (up to +10 % p.a.) ­ Public transport fares (down to ­1.7 % p.a.) ­ Car/lorry cost per km (up to +3 % p.a.) ­ Rail freight cost (down to ­1.5 % p.a.) A3­C3All policies

19 A­1 Scenario A­1 Accessibility road/rail/air travel (million) in year ­ ­ ­ ­ ­ ­ ­ ­ ­ 40 0 ­ 20

20 Scenario A1 Accessibility road/rail/air travel Difference from ScenarioA­ (%) 40 ­ ­ ­ ­ 20 0 ­ 10 ­10 ­ 0 ­20 ­ ­10 ­30 ­ ­20 ­40 ­ ­30 ­50 ­ ­40

21 Scenario B1 Accessibility road/rail/air travel Difference from ScenarioA­ (%) 40 ­ ­ ­ ­ 20 0 ­ 10 ­10 ­ 0 ­20 ­ ­10 ­30 ­ ­20 ­40 ­ ­30 ­50 ­ ­40

22 Scenario C1 Accessibility road/rail/air travel Difference from ScenarioA­ (%) 40 ­ ­ ­ ­ 20 0 ­ 10 ­10 ­ 0 ­20 ­ ­10 ­30 ­ ­20 ­40 ­ ­30 ­50 ­ ­40

23 Scenario A­1 GDP per capita 2031 (€ of 2005) 54 ­ ­ ­ ­ ­ ­ 30 18­ ­ 18 6 ­ 12 0 ­ 6

24 Scenario A1 GDP per capita Difference from Scenario A­ (%) 8 ­ 10 6 ­ 8 4 ­ 6 2 ­ 4 0 ­ 2 ­2 ­ 0 ­4 ­ ­2 ­6 ­ ­4 ­8 ­ ­6 ­10 ­ ­8

25 Scenario B1 GDP per capita Difference from Scenario A­ (%) 8 ­ 10 6 ­ 8 4 ­ 6 2 ­ 4 0 ­ 2 ­2 ­ 0 ­4 ­ ­2 ­6 ­ ­4 ­8 ­ ­6 ­10 ­ ­8

26 Scenario C1 GDP per capita Difference from Scenario A­ (%) 8 ­ 10 6 ­ 8 4 ­ 6 2 ­ 4 0 ­ 2 ­2 ­ 0 ­4 ­ ­2 ­6 ­ ­4 ­8 ­ ­6 ­10 ­ ­8

27 The SASI Model in ET2050

28 Ongoing model developments Extension of forecasting horizon from 2030 to 2050 Conversion of the region system to the 2006 NUTS­3 classification Higher spatial resolution in Croatia and other Western Balkan countries Simple model of long­distance passenger and freight transport Calculation of environmental indicators as energy consumption and CO 2 emissions of transport

29 Questions answered How will European infrastructure investments (TEN­T) regional subsidies (EFRE, CAP) rising energy costs affect regional economic development, regional population/migration, interregional travel and goods flows, energy consumption/CO 2 emissions, territorial cohesion and polycentricity?

30 Baseline Scenario The Baseline Scenario for 2030 and 2050 is based on BAU assumptions about European economic development, European net migration, European transport policies, European regional subsidies. and will produce forecasts of: regional economic development, regional population/migration, interregional travel and goods flows, energy consumption/CO 2 emissions, territorial cohesion and polycentricity.

31 A Scenarios ("MEGAs") The exploratory A Scenarios ("MEGAs") will differ from the baseline scenario by assumptions about European transport policies and regional subsidies that support the concentration of economic activities and population in the major metropolitan areas and will forecast: European economic development, regional economic development, regional population/migration, interregional travel and goods flows, energy consumption/CO 2 emissions, territorial cohesion and polycentricity.

32 B Scenarios ("Cities") The exploratory B Scenarios ("Cities") will differ from the baseline scenario by assumptions about European transport policies and regional subsidies that support the concentration of economic activities and population in the major European cities and will forecast: European economic development, regional economic development, regional population/migration, interregional travel and goods flows, energy consumption/CO 2 emissions, territorial cohesion and polycentricity

33 C Scenarios ("Regions") The exploratory C Scenarios ("Regions") will differ from the baseline scenario by assumptions about European transport policies and regional subsidies that support the development of economic activities and population in small towns and rural regions and will forecast: European economic development, regional economic development, regional population/migration, interregional travel and goods flows, energy consumption/CO 2 emissions, territorial cohesion and polycentricity

34 Exploratory scenarios In addition to the criteria for the definition of scenarios proposed above, also other criteria might be applied to define the exploratory scenarios: They should be differentiated in space, i.e. address the European, national and regional scale. They should be differentiated in time, i.e. account for different phases of development of countries. They should be combined with the same framework assumptions as the baseline scenario. In addition, they can be combined with alternative framework assumptions.

35 Alternative framework conditions The exploratory scenarios using the same framework conditions as the Baseline Scenario can be combined with alternative framework conditions:

36 Ranking of scenarios It is very likely that the exploratory scenarios perform differently with respect to major goals of the EU:

37 Results (1) Population indicators: Population by age, sex, nationality, labour force participation, education, net migration and net commuting by NUTS­3 region per year Economic indicators: GDP by industry, by worker, by capita, employment by industry and unemploy­ ment by NUTS­3 region per year Accessibility indicators: Accessibility by type (travel/goods) and mode (road/rail, road/rail/air) by NUTS­3 region per year

38 Results (2) Transport indicators: Travel and goods flows between NUTS­3 regions by mode per year. Environmental indictors: Energy consumption and CO 2 emissions of transport between NUTS­3 region per year. Cohesion indicators: Cohesion and polycentricity indicators of accessibility and GDP per capita of NUTS­3 regions per year

39 Typical graphical output Time­series diagrams ­ by country or macro region ­ by scenario Maps ­ indicators by NUTS­3 region by year ­ indicator differences between scenarios by NUTS­3 region per year 3D surfaces ­ indicators by NUTS­3 region per year ­ differences between scenarios by NUTS­3 region per year

40 Wegener, M., Bökemann, D. (1998): SASI Model: Model Structure. Berichte aus dem Institut für Raumplanung 40. Dortmund: Institute of Spatial Planning, University of Dortmund. fileadmin/irpud/content/documents/publications/ber40.pdf. Wegener, M. (2008): SASI Model Description. Working Paper 08/01. Dortmund: Spiekermann & Wegener Stadt­ und Regionalforschung. de/mod/pdf/AP_0801.pdf. Fiorello, D., Huismans, G., López, E., Marques, C., Steen­ berghen, T., Wegener, M., Zografos, G. (2006): Transport Strategies under the Scarcity of Energy Supply. Final Report of the EU project STEPs – Scenarios for the Transport and Energy Supply and their Potential Effects, edited by A. Monzon and A. Nuijten. Den Haag: Buck Consultants International. More information