Understanding factors affecting energy consumption and CO2 emissions in Thailand using hybrid-unit input-output approach
Tharinya Supasaa, Shu-San Hsiaua,*,Shih-Mo Linb a
Institute of Energy Engineering, Department of Mechanical Engineering National Central University, Jhong-Li 32001, Taiwan b
Center for Applied Economic Modeling, College of Business Chung Yuan Christian University, Jhong-Li 32023, Taiwan
*Corresponding author: Tel: +886 3 4267341 ext., 34341 Fax number: +886-3-4254501 E-mail:
[email protected]
Abstract This study involved a comparison of production- and consumption-based analyses of energy consumption and CO2 emissions between 2000 and 2010 in Thailand. The results revealed energy consumption contributor and CO2 emitter based on consumption approach. The lowest energy-intensive (EI) sectors on production-based perspective, such as the ‘other manufacturing’, construction, commercial, and food and beverage industries, were the lowest energy-intensive sector on production-based perspective, thus receive rare attention in energy conservation actions. However, these are the most EI sectors from the consumption-based perspective because of their indirect energy consumption. A surge in their intermediate inputs’ consumption for typical EI
products indirectly increased the nation’s total energy consumption. Furthermore, the consumption-based CO2 emissions inventory demonstrated that the manufacturing sector would responsible for the highest reduction in CO2 emissions, rather than the energy sector. When the CO2 emissions inventory associated with international trade are presented, Thailand had lower emission responsibility 10% and 13% in 2000 and 2010 because the country exports more embedded energy than it imports.
1. Introduction
Energy conservation and climate change policies often focus on sectoral energy consumption as well as on the amount of GHGs emitted during the production combustion process. The existing policy in Thailand adopts a production-based approach, which is a practical method because the amount of energy used and emitted is definable and accountable. Using the production-based approach, EI industries and sectors with high energy intensity were prioritised by energy saving and emission reduction policies. Several empirical studies on energy and the environment have indicated that although the recent energy conservation policy with a production-based approach is practical, it may not be sufficient to enable the implementation of a sustainable energy and climate change policy in the future. Conversely, conducting an energy consumption-based analysis simultaneously can provide the necessary additional information for some crucial forecasts of growth in energy use. It reflects the driver of the nation’s energy consumption to assist in potential energy saving actions and GHG mitigation (Limmeechokchai and Suksuntornsiri, 2007; Peters and Hertwich, 2007; Peters, 2008; Zhang et al., 2010). However, in the context of Thailand, studies examining energy analysis and emissions inventory accounting from a consumption perspective are limited.
Therefore, this study attempted to fill the gap by focusing on consumption-based energy and CO2 inventories.
2. Methodology 2.1. Consumption-based energy and emission inventory In this study, the energy–environmental IO (EIO) analysis model (Miller and Blair, 2009) was employed to capture the energy consumption and CO2 emissions of each economic sector, expressed as follows: Xi = ∑zij + fik = ∑aijXj + fik = (I-A)-1f = Lf
(1)
Xi represents the total output of sector i; zij is the intermediate consumption matrix representing the goods/services flow from sector i to sector j, fik, is a final consumption matrix, aij is a direct coefficient matrix, I is a unity matrix, and L = (I − A)−1 is a Leontief inverse matrix. Therefore, the direct consumption of fuel c in physical units by industry j to produce a dollar’s worth of output value in a monetary unit, which is termed as the direct energy intensity by fuel type and is denoted by dcj, is derived as follows: dcj =
amount of fuel c consumed by industry j (physical unit) Value of industry j output in year t
(2)
Where, c is a type of energy. In addition, the total energy content intensity or lifecycle coefficient is a summation of both direct and indirect energy consumption in physical units to produce a dollar’s worth of output for industry j, can be derived by multiplying the direct energy intensity matrix with the Leontief inverse matrix as follows: αcj = ηcj (I − A)−1
(3)
The energy content embodied (G) in commodities and services consumed by final consumers is expressed as follows: G = α ∙ f = ηcj (I-A)-1 ∙ f
(4)
The direct emission intensity, Eij, is derived from multiplying the direct energy intensity with CO2 emission referred from IPCC guideline 2006, as Eq. (5). Eij =
C ∙ dcj
(5)
The sectoral CO2 lifecycle is calculate by multiplying the direct emission intensity with the Leontief inverse matrix, expressed as follows: Hcj = Eij (I − A)−1
(6)
Finally, the sectoral embodied emissions inventory equation (Ncj) is derived by multiplying the completed CO2 supply chain with the final demand consumption in monetary units, which is expressed as follows: Ncj = E∙ f
(7)
3. Data The 2000 and 2010 Thailand IO table published by NESDB (2016) was adopted in this study. Two IO tables were adjusted to constant price tables (2010 prices) using the producer price index (Thailand’s Bureau of Trade and Economic Indices, 2015). The physical energy use data was obtained from the Thailand Energy Situation Annual Report 2000 and 2010 released by the Department of Alternative Energy Development and Efficiency (DEDE), Ministry of Energy.
4. Result 4.1 Production- and consumption-based energy consumption contributors
The results revealed in figure 1. It can be found that the least energy-intensive (EI) sectors on production-based perspective, such as the ‘other manufacturing’, construction, commercial, and food and beverage industries, were the most EI sectors from the consumption-based perspective. The leading EI consuming sectors were observed the downstream industries, which mainly produce final, not intermediate, goods for consumption. These leading EI consuming sectors were not heavy industries or high energy intensity industries, thus, they received less attention in energy conservation policy. The operation process of these industries consumed a small amount of fossil fuels, however, a substantial amount of indirect energy, which could imply that they had high embodied energy consumption because of the consumption of intermediate inputs.
Production-based 2000
Production-based 2010
Consumption-based 2010
Electricity Petroleum refineries Natural gas Crude Oil Coal
60000 50000 40000 30000 20000 10000
UNC
AIR
WAT
ROD
RAL
CMM
CST
OTH
FAB
MET
NMT
CHE
PAP
WOF
TEX
FOB
-10000
MIN
0 AGR
Thousand tonne of oil equivalent (ktoe)
Consumption-based 2000
-20000 -30000 -40000 -50000 -60000
Fig. 1. A comparison of production energy use and embodied energy use for 2000 and 2010 (ktoe). The connection between the leading EI consuming sectors and the EI production sector affects national energy consumption. The leading EI consuming sectors consumed a substantial amount of indirect energy by using assembly parts from typically EI industries to complete their production output. The change in their intermediate inputs’ demand for typical EI products, such as metallic and chemical, will consequently induce the energy consumption of heavy industries, then, indirectly increased the nation’s total energy consumption as a consequence.
4.2 Production- and consumption-based CO2 inventory Under the production-based framework, the CO2 inventory in 2000 and 2010 were 197.5 and 321.2 Mt CO2, respectively. The leading sectors contributing to the nation’s CO2 inventory were petroleum and electricity generation, which accounted for 84% and 73% of national CO2 emissions in 2000 and 2010, respectively. However, scholars have argued that the productionbased emissions accounting does not reflect the real contributors to emissions because this framework allocated the CO2 emission responsibility to the place of production and not to the place of consumption. According to Fig. 2, because the majority of CO 2 emissions stem from the energy sector, it is held responsible for reducing the nation’s CO2 emissions. However, the energy sector is not a final energy consumer. Second, the consumption-based emission inventory approach has provided an additional perspective. It highlights that the energy sector was no longer the leading CO2 emitter, having been overtaken by the manufacturing, commercial, construction, and road transport sectors. Third, the framework is the emissions inventory that considered the importance of international trade in its allocation was considered. The inventory associated it with domestic consumption by including emissions related to imports and excluding those related to exports. This framework assumed that product consumers, and not the producers, should be responsible for emissions. The CO2 inventory associated with international trade, including emissions related to domestic consumption and imports and excluding those related to exports, revealed that Thailand had lower emissions 10% and 13% in 2000 and 2010. The metallic, chemical, and fabricated metal sectors had higher responsibility for CO2 emissions in both the studied years.
Accounting for trades in consumption-based emission Consumption-based emission Production-based emission
Total ELE PTL NGS OIL COA UNC AIR WAT ROD RAL CMM CST OTH FAB MET NMT CHE PAP WOF TEX FOB MIN AGR
Total ELE PTL NGS OIL COA UNC AIR WAT ROD RAL CMM CST OTH FAB MET NMT CHE PAP WOF TEX FOB MIN AGR
(a)
0
50
100
150
200
Mt CO2
(b)
0
50
100
150
200
250
300
Fig. 2. A comparison of production-based, consumption-based, and consumption-based accosting for trade CO2 emissions inventories for (a) 2000 and (b) 2010. 5. Conclusion and discussion The typical leading EI sectors during 2000 and 2010 were the road transport, chemical, nonmetallic, metallic, and commercial sectors. Because they had high energy consumption shares, these sectors had to assume the responsibility for energy saving and emission mitigation, together with the energy sectors, such as power plants. However, the consumption-based approach highlighted that the least EI industries in the production-based approach were the leading EI consuming sectors, such as other manufacturing, commercial, construction, and food and beverage. These typical least EI industries consume low amounts of energy in production;
however, they consume a substantive amount of indirect energy through intermediate inputs. The demand of intermediate inputs is recognised as indirect energy demand, which had an interindustry linkage effect on the changes in energy demand of heavy industries. In addition, the CO2 inventory under the production-based approach, which is the recent climate change mitigation framework, allocated responsibility for emissions to the petroleum and power generation sectors, whereas the consumption-based approach indicated that the leading CO2 emitters were the manufacturing, commercial, construction, and road transport sectors. These sectors should be held responsible for their emissions, instead of the energy sector being held solely responsible for mitigating emissions. Moreover, when we included embedded emissions from imports and excluded emissions associated with exports, Thailand had lower CO2 emissions in 2000 and 2010. In summary, the results of the consumption-based approach provide additional information that enables policymakers to better understand the causes of energy demand in the economy and responsibility for emissions. Thus, energy and emission policies, from a consumption-based perspective, could be used to increase energy saving and emission reduction potential, thus enabling the implementation of a sustainable energy and emissions policy in the future.
References Bureau of Trade and Economic Indices, 2015. Producer Price Index by Product Group Classification of Products By Activity (CPA). DEDE, 2000. Thailand Energy Situation Annual Report 2000. DEDE, 2010. Thailand Energy Situation Annual Report 2010.
Emission Database for Global Atmospheric Research (EDGAR). CO2 time series 1990-2013 per capita for world countries. http://edgar.jrc.ec.europa.eu/overview.php?v=CO2ts_pc19902013&sort=des9, accessed October 2015. Limmeechokchai, B., Suksuntornsiri, P., 2007. Embedded energy and total greenhouse gas emissions in final consumptions within Thailand. Renew. Sustain. Energy Rev. 11, 259–281. Miller, R. E., Blair, P. D. 2009. Input-Output Analysis: Foundations and Extensions. Cambridge University Press. Office of the National Economic and Social Development Board (NESDB)., 2016. Input-output table of Thailand, http://www.nesdb.go.th, accessed May 2016. ONEP, 2011. Thailand’s Second National Communication under UNFCCC. https://unfccc.int/files/national_reports/nonannex_i_natcom/submitted_natcom/application/pdf/snc_thailand.pdf, accessed October 2015. Peters, G.P., 2008. From production-based to consumption-based national emission inventories. Ecol. Econ. 65, 13–23. Peters, G.P., Hertwich, E.G., 2008. Policy analysis CO 2 embodied in international trade with implications for global climate policy. Environ. Sci. Technol. 42, 1401–1407. Zhang, L., Hu, Q., Zhang, F., 2014. Input-Output Modeling for Urban Energy Consumption in Beijing: Dynamics and Comparison. PLoS ONE 9(3), e89850.
