OECD Environmental Outlook to 2050: The Consequences of Inaction Simon Upton Environment Director, OECD New York, 21 March 2012
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Energy efficiency Linking economy and environment Fuel prices Yield efficiency Population & demographics Capital supply Natural resources Economic growth Energy use Bioenergy Land use Local air pollution (under construction) GHG emissions Deforestation Health & environment Climate change Water stress & water quality Biodiversity 3
GDP per capita ('000 USD) 70 GDP +124% 60 50 40 OECD GDP +478% 30 GDP +295% 20 GDP +458% WORLD BRIICS RoW 10 0 0 1 2 3 4 5 6 7 8 9 10 OECD RoW BRIICS WORLD Population (billions) Population (billions) Source: OECD (2012), OECD Environmental Outlook to 2050, Baseline projection using ENV-Linkages model
Billions of constant 2010 USD Environmental Outlook to 2050:Socioeconomic Developments Projections for real gross domestic product: Baseline, 2010-2050 OECD BRIICS RoW US China India 350 000 300 000 250 000 200 000 150 000 100 000 50 000 0 2010 2015 2020 2025 2030 2035 2040 2045 2050 Note: values using constant 2010 purchasing power parity (PPP) exchange rates. Source: OECD Environmental Outlook Baseline; output from ENV-Linkages. 5
Millions Growth not just a developing country concern Percent of GDP Per cent of GDP 3.0 7.0 16 6.0 14 2.0 5.0 12 1.0 10 4.0 8 3.0 0.0 6 2.04-1.0 1.0 2-2.0 0 0.0 To return to 2007 employment levels Changes in age related public spending to 2025 Deficit improvement to achieve 60% debt to GDP by 2025 Employment growth (%) (Left hand axis) Demographics Debt Jobs Additional unemployed since 2007 (Right hand axis) 20.0 15.0 10.0 Pensions Long 5.0term care Health 0.0-5.0-10.0-15.0-1.0-3.0-20.0 1996 1998 2000 2002 2004 2006 2008 2010 2012
GtCO 2 e Environmental Outlook to 2050: Climate Change 90 GHG emissions by region: Baseline, 2010-2050 OECD AI Russia & rest of AI Rest of BRIICS ROW 80 70 60 50 40 30 20 10 0 2010 2015 2020 2025 2030 2035 2040 2045 2050 Source: OECD Environmental Outlook Baseline; output from ENV-Linkages. 7
CO 2 concentration (ppm) Environmental State and Pressures 1 000 CO 2 concentrations 900 800 3-6 C by 2100 700 600 500 450 ppm 400 300 200 1970 1980 1990 2000 2010 2020 2030 2040 2050 2060 2070 2080 2090 2100 Source: OECD (2012), OECD Environmental Outlook to 2050, Baseline projection using IMAGE model suite 8
Scenarios for the future to 2100 The 450ppm core scenario, based on least cost timing of action A «delayed action» scenario based on Copenhagen pledges An «accelerated action» scenario, implying reduced reliance on new technologies A 550ppm «surrender «scenario GtCO 2 e Outlook Baseline 450 ppm Core 130 120 110 100 90 80 70 60 50 40 30 20 10 0 450 ppm Delayed Action 450 ppm Accelerated Action 2010 2020 2030 2040 2050 2060 2070 2080 2090 2100 Source: OECD (2012), OECD Environmental Outlook to 2050, Baseline projection using ENV-Linkages model 9
Zooming in to 2050 The 450ppm core scenario, based on least cost timing of action A «delayed action» scenario based on Copenhagen pledges An «accelerated action» scenario, implying reduced reliance on new technologies A 550ppm «surrender «scenario GtCO 2 e 60 55 50 45 40 35 30 25 0-20 UNEP (2010) range Outlook Baseline 450 ppm Core 450 ppm Delayed Action 450 ppm Accelerated Action 550 ppm Core Baseline GHG emissions in 2050 = 81 GtCO 2 e 2010 2015 2020 2025 2030 2035 2040 2045 2050 Source: OECD (2012), OECD Environmental Outlook to 2050, Baseline projection using ENV-Linkages model 10
The cost of action is still affordable for now The average GDP growth rate would slow by 0.2 percentage point between 2010 and 2050, from 3.5% to 3.3% in a context of quadrupling of world GDP. Benefits of action are not included in GDP projection Index 2010=100 450 400 350 300 250 200 150 Baseline 450 ppm core scenario GDP GHG emissions GDP -5.5% 100 GHG emissions -69.5% 50 0 2010 2015 2020 2025 2030 2035 2040 2045 2050 Source: OECD (2012), OECD Environmental Outlook to 2050, Baseline projection using ENV-Linkages model 11
% Impact on real income in 2050 Economic impact of technology choices in 2050 Leaving out any single technology such as nuclear or carbon capture and storage (CCS) will make the carbon and macroeconomic costs of the transition higher 0% -2% -4% -6% -8% -10% -12% -14% -16% 450 scenario (all technologies) No CCS Nuclear phase-out Low efficiency & renewables Source: OECD (2012), OECD Environmental Outlook to 2050, Baseline projection using ENV-Linkages model 12
MSA Environmental Outlook to 2050: Biodiversity Effects of different pressures on terrestrial MSA: Baseline, 2010 to 2050 100% Infr+Encr+Frag 90% 80% 70% 60% Climate Change Nitrogen Former Land-Use Forestry Pasture Bioenergy Food Crop 0-50% Remaining MSA 2010 2030 2050 13 Source: OECD Environmental Outlook Baseline; output from IMAGE
6 000 Environmental Outlook to 2050: Water Global water demand: Baseline scenario, 2000 and 2050 irrigation domestic livestock manufacturing electricity Km 3 5 000 4 000 3 000 2 000 +140% +400% +130% 1 000 0 2000 2050 2000 2050 2000 2050 2000 2050 World OECD BRIICS RoW Source: OECD Environmental Outlook Baseline; output from IMAGE 14
Environmental Outlook to 2050: Water Nitrogen effluents from wastewater: Baseline, 2000 and 2050 20 OECD India China Africa Rest of the world Millions of tonnes of N / year 18 16 14 12 10 8 6 4 2 0 2000 2050 Source: OECD Environmental Outlook Baseline; output from IMAGE 15
Environmental Outlook to 2050: Water Source: OECD Environmental Outlook Baseline; output from IMAGE 16
Environmental Outlook to 2050: Health & Env. Global premature deaths from selected environmental risks: Baseline, 2010 to 2050 Particulate Matter Ground-level ozone Unsafe Water Supply and Sanitation* Indoor Air Pollution 2010 2030 2050 Malaria 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 * Child mortality only Source: OECD Environmental Outlook Baseline; output from IMAGE Deaths (millions of people) 17
Environmental Outlook to 2050: What policies do we need? Make pollution more costly Source: OECD Environmental Outlook Baseline; output from IMAGE 18
Per cent of GDP Source: OECD/EEA database on instruments for environmental policy; www.oecd.org/env/policies/database. 4.3 3.8 The modest claims of environmental taxes (Revenues in % of GDP, OECD countries, 2010) Other Motor vehicles Energy 3.3 2.8 *: 2009 figures 2.3 1.8 1.3 0.8 0.3-0.2-0.7
Killing two birds with one stone - Green Fiscal Reform Deficit improvement to stabilise debt by 2025, % of GDP 10 9 8 7 6 5 4 3 2 1 0 US Japan Ireland UK New Zealand Greece Netherlands Switzerland Sweden 0 0.5 1 1.5 2 2.5 3 Revenue from taxes on energy, CO 2 and other pollutants, % of GDP, 2008. Excludes vehicle taxes
Environmental Outlook to 2050: What policies do we need? Make pollution more costly Value and price the natural assets and ecosystem services Source: OECD Environmental Outlook Baseline; output from IMAGE 21
How to squander a resource the case of fishing State of catch fisheries, 2008 Over-exploited (31%) Revenue, 2004 $78 bn Subsidies Fully-exploited (53%) $10 bn+ Economic loss Under-exploited (16%) Operating deficit, $5 billion $50 billion Source: FAO Source: Sunken Billions, FAO World Bank
Environmental Outlook to 2050: What policies do we need? Make pollution more costly Value and price the natural assets and ecosystem services Remove environmentally harmful subsidies Source: OECD Environmental Outlook Baseline; output from IMAGE 23
Why make CO2 cheaper if you re trying to make it scarcer? USD $409 billion 2010, developing country fossil fuel consumption subsidies $45-75 billion 2010, in fossil fuel support in OECD countries $ 44 billion, 2010, global renewable electricity subsidies 5 4 3 2 1 Income gains from unilateral removal of fossil fuel consumer subsidies in emerging and developing countries (% change in HH income vs BAU) 6% less emissions globally from removal of these fossil fuel subsidies 0-1 -2 Oil-exporting countries India China Russia Rest of the World Non-EU Eastern European Countries Source: OECD (2012), OECD Environmental Outlook to 2050, Baseline projection using ENV- Linkages model based on IEA data; OECD and IEA analysis see website: www.oecd.org/iea-oecd-ffs 24
Environmental Outlook to 2050: What policies do we need? Make pollution more costly Value and price the natural assets and ecosystem services Remove environmentally harmful subsidies Devise effective regulations and standards Encourage green innovation Measure Progress Source: OECD Environmental Outlook Baseline; output from IMAGE 25
Challenges are so big that we can t afford expensive solutions
What you don t know can hurt you www.oecd.org/environment/outlookto2050