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The 2nd International Workshop onSystem Modelling and Simulation for Policy DevelopmentModeling the impacts of Indonesia’s...
Renewable Energy as An Industrial Perspective willcreates new industrial sector… with palm-oil biodiesel as a learning mod...
There are opportunities. However, there are also challenged byperceived negative impacts on developing palm oil biodiesel ...
Indonesia has Committed to Reduce CO2e Emission byAdopting REDD+ Mechanism sustainable land management                    ...
Perspectives on REDD+ Impacts to the Indonesian Economy… and to palm-oil biodiesel industry  REDD+ will slow the economic ...
Sustainable Development Concepts as basic ideas ofGreen Economy Framework           Economic                     Productiv...
Modeler Perspective on Green Economy:Conceptual Overview of the Nature-Economy System (UNEP)        Natural      Ecosystem...
Modeler Perspective on Green Economy (2)• Modeling the brown economy with green indicators:  putting price to what used to...
Modeler Perspective on Green Economy (3)Renewable Energy Modeling has more challenges                                     ...
REDD+, Green Economy and Palm-Oil Biodiesel Industry offersinteractive dynamics of trade-offs• Can we have sustainable pal...
Model Conceptualization                                REDD+ Policy Alternatives                                      Ener...
Modeling Topology: Matching Problems with models  Problem descriptors                                     Model typology  ...
Renewable Energy with Sustainability Modeling ischaracterized by long term and multi dimensional analysis… system dynamic ...
National Sustainable Development Model based onT21 Millennium Group Model                                   National Susta...
Biodiesel Industry Sub-Model                               15
Land Use and Green Economy Sub-ModelsGreen Economy  Indicators                Land Allocation                             ...
Green Economy Framework forAnalysis Indicators         Gini Coefficient   Socially Inclusive            Poverty LevelGreen...
Integrated Decision Dashboard                                18
Scenario Development Topology Scenario Approach                                      Scenario Goal/Usage • Forecasting | B...
Planned Scenario: What if with baseline vs policy                      1. Business As       1B. BAU (No         2. REDD+ w...
Policy Implications Switching to green economy would require new data and new definitions with accepted measurements and i...
The 2nd International Workshop onAgent-Based Modelling and Simulation for Policy DevelopmentModeling the impacts of Indone...
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Modelling Green Economy using SD

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This my presentation in the 2nd International Workshop System Modelling and Simulation for Policy Development.

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Modelling Green Economy using SD

  1. 1. The 2nd International Workshop onSystem Modelling and Simulation for Policy DevelopmentModeling the impacts of Indonesia’s REDD+Initiatives to the Biodiesel Targets inthe Green Economy Frameworkusing System DynamicsModelers PerspectivesAkhmad Hidayatno | akhmad.hidayatno@ui.ac.idSystems Engineering, Modeling and Simulation LabIndustrial Engineering, Universitas Indonesiasystems.ie.ui.ac.id 1
  2. 2. Renewable Energy as An Industrial Perspective willcreates new industrial sector… with palm-oil biodiesel as a learning model Green Government Regulations Economy UU 30/2007, Inpres 1/2006, Permen ESDM 32/2008 Maturity of Supporting Green Market Industry Green Jobs Market New Mechanism Public and Renewable (Price, Private Energy Demand, Investment Indusry Structure) Production and Technology Capability (1st Generation ) 2
  3. 3. There are opportunities. However, there are also challenged byperceived negative impacts on developing palm oil biodiesel • Industrial Value Adding • Unattractive Investment • No new infrastructure Economy Biodiesel comparing to Gas • Employment • Exclusiveness Access to Land• Development of Rural Areas Social • Food vs Fuel Debate • Better Fuel Emission • Increased CO2 due to • Improved Carbon Capture Environment reduction of forest • Threat to biodiversity •Better Energy Mix • Multi-Actors along the •Renewable Energy Energy production chain Industry 3
  4. 4. Indonesia has Committed to Reduce CO2e Emission byAdopting REDD+ Mechanism sustainable land management Reduction of CO2e economic system with sustainable 26% in 2020 utilization of natural-resources (or 41% at best case scenario), with steady economic growth of conservation- 7% yearly. rehabilitation of forest *Strategic Programs from Draft Strategy of REDD+ (Reduction of Emission through Deforestation and Forest Degradation) 4
  5. 5. Perspectives on REDD+ Impacts to the Indonesian Economy… and to palm-oil biodiesel industry REDD+ will slow the economic growth of development countries (The Old Brown Economy Way) REDD+ will drive the economic growth of development countries in a more sustainable way (Green Economy Way) Green Economy: “improved human well-being and social equity, while significantly reducing environmental risks and ecological scarcities” (UNEP 2010)
  6. 6. Sustainable Development Concepts as basic ideas ofGreen Economy Framework Economic Productive Labor, Consumption Capital Social Infrastruktur, Capital Health, Bangunan, Productivity Alat-alat Produksi, dsb Jobs, Income Conservation Investment Quality of Life Environm ent Natural Capital resources, Flora dan fauna, Conservation Pollution Water, air, Awareness and Absorption Minerals Movements Energy Renewable and Non-Renewable 6
  7. 7. Modeler Perspective on Green Economy:Conceptual Overview of the Nature-Economy System (UNEP) Natural Ecosystem Natural Ecosystems Capital Services Stocks Goods Value of Natural Value of Total Factor Capital Ecosystem goods Productivity Intangible Social Value of Natural Capital Production Capital Practices Net contribution Labor of nature GDP Green GDP
  8. 8. Modeler Perspective on Green Economy (2)• Modeling the brown economy with green indicators: putting price to what used to be free• It is an economic growth models link to social and environment: how deep the linkage will go is the challenging part• SD Modeling Perspectives – what archetypes?: – Is sustainable growth = putting “limits of growth”? – Can we avoid “tragedy of the commons”? – Can we avoid REDD+ to become “fixes that fails”? – Will Renewable Energy Targets = Drifting Goals? 8
  9. 9. Modeler Perspective on Green Economy (3)Renewable Energy Modeling has more challenges Different Local Large Scale 1 Limitations 2 Documentation 3 Characteristics of Industry Unique local conditions will Very limited open Renewable Energy limit the use of generic model. documentation is available Production has different For example: Indonesia as an on implementing renewable characteristics that the Archipelago, multi social energy in a large (national) energy production. Deep values, etc. scale understanding of non- energy industry works is needed (foresty, agriculture, manufacturing etc.) A more integrated, well-documented and adapted approach is needed to manage renewable energy industry*A. Ross and C. Rakos, The limits of modeling. Experiences with bioenergy in practice - could models have predicted this outcome.Biomass and Bioenergy, 2000. 18: p. 331-340.
  10. 10. REDD+, Green Economy and Palm-Oil Biodiesel Industry offersinteractive dynamics of trade-offs• Can we have sustainable palm-oil biodiesel production that satisfy REDD+?• Can the promise of green jobs and green investments from the renewable energy industry be delivered?• Can we analyse the competition of Food vs Fuel vs Forest for land area?• At What Cost? Land Allocation 10
  11. 11. Model Conceptualization REDD+ Policy Alternatives Energy Policy Alternatives Facilitating Allocate Government Freeing Price Quantity Markets Property Rights Corporations Markets Regulations Regulations (Legalize) Matching Tariffs Subsidies Tax Credits Energy & Grants Resources State Enterprise OUTPUT INPUT National Sustainability Model – Systems Dynamics Model based on T21 Sustainability Output SME Performance Expected ForestryBasic External ROW Economic Factors government Economic Growth Agriculture (Inflation, education Exchange Rates, etc) poverty households Trade Poverty Level health Total Luas infrastructure Environment investment CO2 Emission Reduction Lahan Problem Owner: Targets CER/VER Potensial Government Industry population production Biodiesel Volume Target Science and Grants Achieved Technology labor technology Problem Owner Goals: Fulfillment of the short- Finance Basic Social water energy term and long-term of (Population national biofuel usage GreenGrowth Rate, land Local Economy and etc) emissions Governments Sustainability Module Forest Palm CPO Biodiesel Biodiesel Land Use Plantation Producer Producer Usage Change Stakeholders Module Biodiesel Industry Sub-Model (Biodisel Producers, PERTAMINA, Palm Oil Industry, Consumers, NGOs, Donors, Carbon Market) 11
  12. 12. Modeling Topology: Matching Problems with models Problem descriptors Model typology Time horizon, responsible authority Strategic-operational Degree or direction of change Qualitative-quantitative Ongoing or intermittent Continuous-discrete Inherent system memory or not Dynamic-static Where or when or both Spatial-temporal Why or if Deterministic-stochastic Availability of data Data rich-data poor Knowledge rich or knowledge poor White box – black box Modeling Tools, Methology and Approach System Dynamics Regression analysis Network-based modelling Statistical/Mathematical models Agent-based modelling Expert systems Cost-benefit analysis Discrete modelling Spreadsheet modelling Physical systems modelling Multi-Approach models GIS-based models 12
  13. 13. Renewable Energy with Sustainability Modeling ischaracterized by long term and multi dimensional analysis… system dynamic is selected Optimization (Max/Min) What If-s Scenario Sustainability Focus Environment Analysis Multi Source Energy Single Source Energy World Country Sectors or County Scale of Analysis Short Medium Long Time Analysis 13
  14. 14. National Sustainable Development Model based onT21 Millennium Group Model National Sustainable Development Model Sustainability Impact Macro Sub-Model Sustainable Socio- Tech Environment Module Indicators Module GHG Climate Forest Water Household Emission Change Social Life Expectancy Income Economy Distribution Economic Module Environ- Production Government Population ment Inco Exp Balan Agri Serv Ind Technology me end ce Energy Mix Relative International Investment Employment Prices Trade Biodiesel Volume Energy Module Oil Energy Demand Palm Oil Explora National Transp Biodiesel Prod Residential Serv Ind tion Price ort 14
  15. 15. Biodiesel Industry Sub-Model 15
  16. 16. Land Use and Green Economy Sub-ModelsGreen Economy Indicators Land Allocation Land Demand Scenario Green GDP Forest Module GDP Limited Production Conversion Production Carbon Forest Forest Peat Forest Value Land Area Carbon Conservation Protection Stock Forest Forest Forest Area 16
  17. 17. Green Economy Framework forAnalysis Indicators Gini Coefficient Socially Inclusive Poverty LevelGreen Jobs in Rural Areas Low Carbon GHG Emissions CO2e Emission Biodiesel and Renewable Energy Mix Green Economy Green GDP Resource Efficiency Forest Land Carbon Stock Value 17
  18. 18. Integrated Decision Dashboard 18
  19. 19. Scenario Development Topology Scenario Approach Scenario Goal/Usage • Forecasting | Backcasting • Predictive: Forecasts | What If • Qualitative | Quantitative • Explorative: External | Strategic • Baseline | Policy • Normative: Preserving | Transforming • Dimensions of Uncertainties • Modeling Scenario Characteristics Scenario Goals: exploration or decision support Norms Inclusion: descriptive vs normative, Vantage point: forecasting vs backcasting, Subject: issue-based | area- based | institution-based, Time scale: long term vs short term, Spatial scale: global/supranational vs national/local; Process design: intuitive vs formal Data : qualitative vs quantitative, Data collection: participatory vs desk research, Resources: extensive vs limited, Institutional conditions: open vs constrained Scenario: Simple or Complex Temporal nature: clean vs snapshot, Variables: heterogenous vs homogenous, Dynamics: peripheral vs trend, Level of deviation: alternative vs conventional 19
  20. 20. Planned Scenario: What if with baseline vs policy 1. Business As 1B. BAU (No 2. REDD+ with 2B. REDD+ with 3. REDD+ with No Usual (BAU) Subsidy) Sustainable Palm Sustainable and Palm Oil Oil Efficient Palm Oil ExpansionFuel Price Subsidized Market Price with Market Price with Market Price with Market Price with EIA Projection EIA Projection EIA Projection EIA ProjectionBiodiesel Price Subsidized Fuel Market Price with Market Price with Market Price with Market Price with Price with EIA Projection EIA Projection EIA Projection EIA Projection additional IDR 2000Land Opening Slash and Burn Slash and Burn Slash and Mush Slash and Mush N/AMethodsLand Class Mostly High Mostly High Lowest Class due to Class Upgrade N/AProductivity Degradable LandFresh Fruit Bunch 3,5 ton/ha/year 3,5 ton/ha/year 3,5 ton/ha/year 6 ton/ha/year 6 ton/ha/yearProductivtyCPO Extraction 23,5% 23,5% 23,5% 25% 25%RateProduction Chain Independent Independent Integrated Integrated Biodiesel IndependentType Biodiesel Producers Biodiesel Producers Biodiesel Producers Producers Biodiesel (CPO Market Price) (CPO Market Price) (CPO Cost Price) (CPO Cost Price) Producers (CPO Market Price)Renewable Energy Off Target Off Target On Target On Target On TargetMix Achievement2025 20
  21. 21. Policy Implications Switching to green economy would require new data and new definitions with accepted measurements and indicators. National initiatives to gather these data is needed A new category of land-use: renewable energy production might be needed, with special considerations that are different than ordinary forest or agricultural land. A new category of industry: renewable industry with specific incentives could also be established Government policy to support increased investment in renewable energy needs to be carefully designed in an integrated manner and there is no one-size-fits-all approach (UNEP) 21
  22. 22. The 2nd International Workshop onAgent-Based Modelling and Simulation for Policy DevelopmentModeling the impacts of Indonesia’s REDD+Initiatives to the Biodiesel Targets inthe Green Economy Frameworkusing System DynamicsModelers PerspectivesAkhmad Hidayatno | akhmad.hidayatno@ui.ac.idSystems Engineering, Modeling and Simulation LabIndustrial Engineering, Universitas Indonesiasystems.ie.ui.ac.id 22

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