Risk assessment of the economic impacts

of climate change on the implementation

of mandatory biodiesel blending
programs:
A fuzzy inoperability input-output
modeling (IIM) approach
K. Aviso a , D. Ama lin a , M.A. Promentilla a ,
J. Santos b , K.D. Yu a , R. Tan a
a De La Salle Unive rsi ty, Man ila
b The Georg e Was hington Un ivers ity, DC

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 My co-authors

Prof. Divina Amalin Prof. Joost Santos Prof. Raymond Tan

Entomology Systems Engineering Chemical Engineering

Prof. Michael Angelo Promentilla Dr. Krista Yu

Chemical Engineering Economics
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 Journal Statistics

Impact Factor 3.249 based from Thomson Reuters

Journal Citation
Rank 47 for Energy category (Scimago Journal
Ranking)
Rank 22 for Renewable Energy, Sustainability and the
Environment (Scimago Journal Ranking)

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 Introduction
Climate change is associated with the
increasing atmospheric concentration
of greenhouse gases (GHGs)
The transport sector contributes to
13% of the global GHG emissions in
2004 (IPCC, 2007)
Impacts of climate change include
drought, rise of sea level, disease
outbreaks etc.

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 Biofuels

Biofuels are being considered as alternative

fuel to reduce the generation of GHGs
Biofuel feedstocks are typically agricultural
products which require more land and water
than their traditional counterparts
Reliance on biofuels may strongly be
influenced by the impacts of climate change

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 Biofuel Scenario in the Philippines
Demand for diesel is 8B liters per year in 2014
Demand for gasoline is 5B liters per year
Enactment of the Biofuels Act in 2006 aims to reduce the
countrys dependence on imported fossil fuels and to reduce
GHGs
National Biofuels Program mandates a 2% biodiesel blend
for diesel and 10% ethanol blend for gasoline
Coconut is the main feedstock for biodiesel production in the
country
In 2013, insect damage (coco lisap) affected 50 70% of
coconut farms in Batangas

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 Problem Statement
Given the increased reliance of transport fuel to biofuels
Given that the implementation of a biofuel policy results in a unique
technical coefficient (A) and interdependency matrix (A*) of an economic
system
A perturbation (c*) occurs and reduces the total output of an economic
sector and is defined by its inoperability (q)
Impact uncertainty is defined by triangular fuzzy numbers
The objective is to calculate the degrees of inoperability and economic
losses experienced by all economic sectors resulting from the perturbation
(c*)

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 Fuzzy inoperability input-output model
A Three-Sector Input-Output System

Wastes and Pollutants

S-1

Resource Inputs

Final Outputs
q inoperability vector
S-2

S-3

I identity matrix
System Boundary

A* - interdependency
6

matrix
c* - perturbation vector
Outranking of fuzzy numbers
Triangular fuzzy numbers
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 Case Study
5% biodiesel blend is implemented, 16
economic sectors
Spread of the coconut scale insect Aspidiotus
rigidus
In 2013, 50 70% of coconuts in Batangas
were affected
Accidental introduction of infested plant
parts and absence of natural enemies resulted
in the outbreak
A. rigidus can be controlled by the
introduction of the parasitoid Comperiella
calauanica
Loss of productivity in the coconut sector due Degrees of Inoperability of Economic Sectors
to pest infestation (5.0, 19.0, 37.0)

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 Case Study
The highest inoperability is
experienced by the coconut farming
sector resulting to PhP 1.36 B to PhP
10 B in economic loss
The perturbation ripples through
other economic sectors
Government services does not
experience any inoperability
High uncertainty in perturbation
resulted in ranking overlaps in
several sectors

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 Conclusions
Disruptions resulting from climate change effects ripple through the
economic system due to interdependencies of economic sectors
There is a difference in ranking for inoperability vs economic loss
Fuzzy IIM provides a rigorous approach to analyzing risks while accounting
for uncertainties
Uncertainties in perturbation results in partial outranking of economic
sectors
There is a need to balance between the benefits of policies (i.e. biofuel
mandates) and potential negative effects of supply disruptions
Low carbon energy options should be evaluated for resilience in the context
of climatic impacts

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 Future work
Integrating multiple vulnerability measures into a single metric
Consideration of non-economic factors such as government image, public
confidence and other socio-political dimensions in the decision framework
Analysis of the occurrence of simultaneous disasters and the dynamic
nature of the impact and system recovery
Application of the methodology for other scenarios and biofuel policies
Development of the Fuzzy CGE model to account for non-linearities

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 Acknowledgement
The authors would like to acknowledge the Commission on Higher
Education Philippine Higher Education Research Network through the
Sustainability Studies Program and the US National Science Foundation
(Award #1361116)

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Thanks for your attention

Comments and questions are welcome

Or contact me via e-mail:

kathleen.aviso@dlsu.edu.ph

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