Production system and representation of economic sectors - C3IAM

Model Documentation - C3IAM
Corresponding documentation
AIM-Hub BLUES C3IAM COFFEE-TEA DNE21+ GEM-E3 GRACE IMACLIM IMAGE POLES PROMETHEUS REMIND-MAgPIE TIAM-UCL WITNESS
Previous versions
Archive of C3IAM version 2.0
Model information
Model link	http://inems1.bit.edu.cn/C3IAM https://ideas.repec.org/a/spr/nathaz/v92y2018i2d10.1007 s11069-018-3297-9.html https://www.nature.com/articles/s41467-020-15453-z
Institution	Center for Energy and Environmental Policy Research, Beijing Institute of Technology (CEEP-BIT), China, http://ceep.bit.edu.cn/english/.
Solution concept	General equilibrium (closed economy)
Solution method	Optimization
Anticipation

C³IAM/GEEPA includes 27 sectors, which are paddy rice, wheat, cereal grains, vegetables and fruit and nuts, oil seeds, sugar cane and sugar beet, plant-based fibers, crops, cattle and sheep and goats and horses, animal products, raw milk, wool and silk-worm cocoons, forestry, fishing, coal, oil, gas, other minerals, other manufacturing, energy-intensive manufacturing, roil, electricity, gas manufacture and distribution, water, construction, transportation service industry and other services (shown in Table 1 below). C³IAM/MR.CEEPA covers 31 provinces and municipalities (without Hong Kong, Macao and Taiwan due to data availability) of China and includes 23 sectors (see Table 2 below).

Table 1 Classification of 27 sectors in C³IAM/GEEPA

GEEPA 27 sectors			GTAP 57 sectors
			Description in GTAP database 9
1	pdr	pdr	Paddy rice
2	wht	wht	Wheat
3	gro	gro	Cereal grains, not elsewhere classified (n.e.c.)
4	v_f	v_f	Vegetables, fruit, nuts
5	osd	osd	Oil seeds
6	c_b	c_b	Sugar cane, sugar beet
7	pfb	pfb	Plant-based fibers
8	ocr	ocr	Crops n.e.c.
9	ctl	ctl	Cattle, sheep, goats, horses
10	petr	oap	Animal products n.e.c.
11	rmk	rmk	Raw milk
12	wol	wol	Wool, silk-worm cocoons
13	for	frs	Forestry
14	fsh	fsh	Fishing
15	col	Coal	Coal
16	oil	Oil	Oil
17	gas	Gas	Gas
18	omn	OtherMin	Minerals n.e.c.
19	cmt	OtherMnfc	Meat: cattle, sheep, goats, horse
20	omt		Meat products n.e.c.
21	vol		Vegetable oils and fats
22	mil		Dairy products
23	pcr		Processed rice
24	sgr		Sugar
25	ofd		Food products n.e.c.
26	b_t		Beverages and tobacco products
27	tex		Textiles
28	wap		Wearing apparel
29	lea		Leather products
30	lum		Wood products
31	ppp	EintMnfc	Paper products, publishing
32	p_c	Roil	Petroleum, coal products
33	crp	EintMnfc	Chemical, rubber, plastic prods
34	nmm		Mineral products n.e.c.
35	i_s		Ferrous metals
36	nfm		Metals n.e.c.
37	fmp		Metal products
38	mvh	OtherMnfc	Motor vehicles and parts
39	otn		Transport equipment n.e.c.
40	ele		Electronic equipment
41	ome		Machinery and equipment n.e.c.
42	omf		Manufactures n.e.c.
43	ely	Elec	Electricity
44	gdt	FuelGas	Gas manufacture, distribution
45	wtr	Water	Water
46	cns	Cons	Construction
47	trd	OthServices	Trade
48	otp	TransService	Transport n.e.c.
49	wtp		Sea transport
50	atp		Air transport
51	cmn	OthServices	Communication
52	ofi		Financial services n.e.c.
53	isr		Insurance
54	obs		Business services n.e.c.
55	ros		Recreation and other services
56	osg		PubAdmin/Defence/Health/Educat
57	dwe		Dwellings

Table 2. Sectors in C³IAM/MR.CEEPA

No.	Sectors	Sectoral Description
1	AGRI	Agriculture
2	Coal	Mining and Washing of Coal
3	Oil	Extraction of Petroleum
4	NatGAS	Extraction of Natural Gas
5	OtherMin	Mining of Other Ores
6	FoodTob	Manufacture of Foods and Tobacco
7	Textile	Manufacture of Textile
8	WearApp	Manufacture of Textile, Wearing Apparel and Accessories, Leather, Fur, Feather and Related Products and Footwear
9	WoodProd	Processing of Timber, Manufacture of Wood, Bamboo, Rattan, Palm, and Straw Products
10	PaperProd	Manufacture of Paper and Paper Products
11	Petr	Manufacture of refined petroleum products
12	Coking	Manufacture of coke
13	Chemistry	Manufacture of Raw Chemical Materials and Chemical Products
14	NonMetProd	Manufacture of Non-metallic Mineral Products
15	MetalSmelt	Smelting and Pressing of Ferrous Metals and Non-ferrous Metals
16	Metalware	Manufacture of Metal Products
17	Equipment	Manufacture of Machinery
18	ELEC	Production and Supply of Electricity and Heat
19	GasPandS	Production and Supply of Gas
20	WaterProSup	Production and Supply of Water
21	Construction	Construction
22	TraStorPost	Transport Service
23	OtherService	Other Service

In the production module, we assume that each sector produce only one commodity, and the inputs of each sector include labor, capital, energy, and other intermediate inputs. In addition, the production of each sector is represented by a nested constant elasticity of substitute (CES) function, as shown in Equation (1). The CES function is characterized by the flexibility to reflect the alternatives between producers and consumers based on the price and cost. For example, if carbon pricing policies are implemented in the economy, the producers will choose to use lower-carbon energy for its production activities due to increases in the cost of high-carbon energy, thus promotes the economy transition from high-carbon energy to clean energy.

$Y_{i,r}=CES(X_{j,r};\rho )=A_{i}\centerdot \sum _{j}^{\centerdot }({\boldsymbol {\alpha }}_{j,r}\centerdot {X_{j},r}^{\rho })^{\frac {1}{\rho }}$ (1)

Where  $Y_{i,r}$refer to the output of sector $i$ in region $r$, $X_{i,r}$is the input of sector $i$ in region $r$, $A_{i}$is shift parameter, ${\boldsymbol {\alpha }}$is the share parameter,  $\rho ={\frac {1}{1-\sigma }}$is the substitution parameter, $\sigma$is the elasticity of substitution.

In C³IAM, the substitution of production functions consists primarily of substitutions between electricity and non-ELEC bundle, energy aggregate and capital, as well as energy-capital aggregate and labor.