Impacts of Electric Supply Shortage in Japan Simulated by the GTAP, GTAP-E, and Revised GTAP-E Models

Akiko Higashi-Shiraishi 
(Mitsubishi Research Institute, Inc., Japan)

Abstract: The growing risk of electric supply shortage in Japan has necessitated an urgent review of energy policy. As the magnitude of the impacts of electric supply shortage will be largely influenced by the development of energy substitution in industries, it is worthwhile to undertake simulations for different scenarios concerning energy substitution, to evaluate the impacts of electric supply shortage. Two models are used in the simulation: the GTAP and the GTAP-E model. The latter is an extended energy-environment version incorporating an energy substitution structure in the GTAP model. The simulation using the GTAP model considers a scenario without energy substitution, while that using the GTAP-E model considers one with energy substitution. Thus, the comparison of these simulation results indicates the effect of energy substitution on electric supply shortage. The purposes of this paper are two-fold. The first is to analyze the impacts of reduced electric power usage caused by electric supply shortage in Japan, using the GTAP and the GTAP-E models, based on the GTAP 8 database. The second is to compare the simulation results of the GTAP-E and the revised GTAP-E models, the latter of which was released in late 2012. This paper first discusses the methodology used to evaluate the impacts of electric supply shortage using the GTAP model. Second, it proposes a method to create a database for the GTAP-E and the revised GTAP-E models, by adopting a new regional and sectoral aggregation. Third, this paper compares and analyzes the simulation results of each model. The comparison of the simulation results of the GTAP and the GTAP-E models shows that the effect of energy substitution could be significant. The simulation results of the GTAP-E and the revised GTAP-E models are quite similar. Thus, it could be said that the revised GTAP-E model has improved many technical points of the original GTAP-E model, while maintaining its basic structure.

Key words: electric supply shortage; GTAP model; GTAP-E model

JEL code: C68