An Environmental Outlook to 2050:
focussing on Climate Change
Rob Dellink
OECD Environment Directorate
Chapter co-authors:
Virginie Marchal (ENV), Detlef van Vuuren (PBL), Christa Clapp (ENV),
Jean Chateau (ENV), Elisa Lanzi (ENV), Bertrand Magne (ENV),
Jasper van Vliet (PBL)

7 February 2012, TokyoSet-up of the presentation
Introduction

Baseline projections
Pathways for limiting
climate change
Policy steps for a low-carbon,
climate resilient economy
2

Environmental Outlook to 2050
Structure of the Report• Executive Summary• 1. Introduction• 2. Socioeconomic Developments• 3. Climate Change• 4. Biodiversity• 5. Freshwater• 6. Health and Environment• Annex on the Modelling Framework
Environment Directorate3

Approach and modelling methodology

Linking economic and environmental modelling• a general equilibrium economic modelling framework(ENV-LINKAGES at the OECD/ENV)• a comprehensive environmental modelling framework(IMAGE suite of models at the Netherlands Environmental
Assessment Agency)
4Linking economy and environment
Population & demographics

Capital supply

Natural resources

Energy use

Yield
efficiency

Fuel prices

Economic growth
Energyefficiency

5Bioenergy

Local air pollution

GHG emissions

Health &environment

Climatechange

Land use
Deforestation

Water stress &water quality

Biodiversity
5Set-up of the presentation
Introduction

Baseline projections
Pathways for limiting
climate change
Policy steps for a low-carbon,
climate resilient economy
6Projections for GDP

Billions of USD PPP 2010

Global GDP is projected to quadruple by 2050; GDP growth is especially highin regions with growing population and that are far from their ‘frontier’, i.e.
that have large scope for productivity improvements
OECD

BRIICS

ROW

USA

China

India

350,000

300,000
250,000
200,000
150,000
100,00050,00002010

2015

2020

2025

2030

2035

2040

2045

2050

7

OECD Environmental Outlook (2012) projection using ENV-Linkages modelEnvironmental state and pressures (1)Global GHG emissions are expected to grow by 50% between now and 2050,
mostly driven by GDP growth in Brazil, Indonesia, India and China andSouth Africa.
CH4of BRIICS
N2O(44%) HFC+PFC+SF6Rest
ROW (26%)

90
90
80
80
70
70
60
60
50
50
40
40
30
30
20
20

2050
2050

2048
2048

2046
2046

2044
2044

2042
2042

2040
2040

2038
2038

2036
2036

2034
2034

2032
2032

2030
2030

2028
2028

2026
2026

2024202420222022

2018
2018
2020
2020

00

2014
2014
2016
2016

10
10

2010
2010
2012
2012

GtCO2 e
GtCO2eCO2CO2(Landuse)
OECDA1(energy+industrial)(23% in 2050) Russia &restof A1(7%)

8OECD Environmental Outlook (2012) projection using ENV-Linkages modelEnvironmental state and pressures (2)Energy-related CO2 emissions were at an all-time high in 2010 and - despite
energy efficiency improvements - energy use and associated emissions
are projected to continue to increase
CO2 emissions from energy and industry to 2050, baseline
60GtCO2

Industrial
processes
power
generation50energy
transf ormation*

40

transport
30
industry20

residentialservices

10

Other sectors
01980

1990

2000

2010

2020

2030

2040

2050

OECD Environmental Outlook (2012) projection using IMAGE model

9

Environmental state and pressures (3)In the Baseline projection, atmospheric concentration of GHGs could reachalmost 685 ppm CO2 equivalent by 2050 (and CO2 only 530 ppm), andglobal temperature could increase by 3-6°C above pre-industrial by 2100
We are WAY OFF TRACK
CO2 concentrations

Regional temperature increase by 2050

1 000

6.0
5.5900800

Temperature increase (oC)CO2 concentration (ppm)

5.0

700
600
500

450 ppm

400

4.5
4.0
3.5
3.0
2.5

2oC

2.0
1.5

1.0

300
0.5

2000.01970 1980 1990 2000 2010 2020 2030 2040 2050 2060 2070 2080 2090 2100

1970 1980 1990 2000 2010 2020 2030 2040 2050 2060 2070 2080 2090 2100

10OECD Environmental Outlook (2012) projection using ENV-Linkages modelEnvironmental state and pressures (4)Cost of damages are likely to be high if you miss the target.
The world is looking at potentially large scale social, economicand environmental damages
Change of annual temperature between 1990-2050

11OECD Environmental Outlook (2012) projection using ENV-Linkages modelSet-up of the presentation
Introduction

Baseline projections
Pathways for limiting
climate change
Policy steps for a low-carbon,
climate resilient economy
12Two necessary policies

Adaptation

Mitigation

Adaptation policies are needed to safeguard the well-being ofcurrent and future generations worldwide.
Integrating adaptation in development co-operation is critical13

Reverse GHG emission trends
The 450ppm core scenario: start pricing carbon in 2013;least cost timing of action: cheap options first, use low cost technologies,rely on BECCS at the end of the century
Outlook Baseline

GtCO2e450 ppm Core

130120
110
100
90

80
7060
50

40302010
2100

2095

2090

2085

2080

2075

2070

2065

2060

2055

2050

2045

2040

2035

2030

2025

2020

2015

2010

014

OECD Environmental Outlook (2012) projection using ENV-Linkages model

The cost of action is 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=100450BaselineBaselinescenario
scenario
400450450ppm
ppmcorecorescenario
scenario
GDP -5.5%

350

300

250

200

150

GHG emissions -69.5%

1005002010

2015

2020

2025

2030

2035

2040

2045

2050

15OECD Environmental Outlook (2012) projection using ENV-Linkages model

There are other pathways
Three scenarios for the same objective:• The 450ppm core scenario, based on least cost timing of action• « Delayed action », based on Copenhagen pledges• « Accelerated action », implying reduced reliance on new technologies
Outlook Baseline
Outlook Baseline
Outlook Baseline 450 ppm Core450 ppm Delayed Action

GtCO2e450 ppm Coreppm
Delayed Action
450450ppm
Core450 ppm Accelerated Action

90807060
50
403020102050

2045

2040

2035

2030

2025

2020

2015

2010

016OECD Environmental Outlook (2012) projection using ENV-Linkages modelAct now, delay is costly
Delaying action would increase the global cost of mitigation by nearly 50%
by 2050, and could make it unaffordable
450 ppm Core

450 ppm delayed action

5%0%-5%-10%-15%-20%-25%

M.East & N.Africa

MexicoRussiaRest of Annex I

China

Indonesia

India

South Africa

BrazilJapan & Korea

EU27 & EFTAOceania

USACanadaWorld-30%

17OECD Environmental Outlook (2012) projection using ENV-Linkages modelSet-up of the presentation
Introduction

Baseline projections
Pathways for limiting
climate change
Policy steps for a low-carbon,
climate resilient economy
18

Policy steps to build a low-carbon economy
1.

Set clear, long-term, more stringent and economy-wide
GHG mitigation targets

2.

Put a price on carbon, preferably through market-based
instruments

3.

Reform fossil fuel support policies

19Why make CO2 cheaper if you’re trying to
make it scarcer?
$45-75billion

USD $409 billion
2010 , developing country
fossil fuel consumption
subsidies54

2010, in fossil
fuel supportin OECD countries$ 44billion,
2010, global
renewable
electricity
subsidies

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 removalof these fossil fuelsubsidies

32
1
0-1-2
Oil-exporting
countries

India

China

RussiaRest of the World Non-EU Eastern
EuropeanCountries
20

OECD Environmental Outlook (2012) projection using ENV-Linkages model based on IEA data;
OECD and IEA analysis see website: www.oecd.org/iea-oecd-ffs

Policy steps to build a low-carbon economy
1.

Set clear, long-term, more stringent and economy-wide
GHG mitigation targets

2.

Put a price on carbon, preferably through market-based
instruments

3.

Reform fossil fuel support policies

4.

Foster innovation and support new clean technologies in a
« technology-neutral » way

21

4. Foster innovation and support new clean
technologies in a « neutral » way
Except in 2009 for the green stimulus, public RD&D on energy as share of total
R&D budgets has declined in real terms over the last 35 years (IEA).
Percent

Energy efficiency

USD Billion (2009 prices and PPP1)
24

12

Fossil fuel (e.g. CCS and clean coal)

Renewable energy sources
Hydrogen and fuel cells

20

10

Nuclear
Other
16

Share of energy R&D in total R&D (right axis)

8

12

6

8

4

4

200
1975

1980

1985

1990

1995

2000

2005

22

4. Foster innovation and support new clean
technologies in a « neutral » way% Impact on real income in 2050

Leaving out any single technology – such as nuclear or carbon capture andstorage (CCS) – will make the costs of the transition higher
450 scenario(all technologies)0%

No CCSNuclear
phase-out

Restricted Energy Ef f iciency& renewables

-5%
-10%
-15%

-20%
-25%
-30%
WorldOECD A1

RestA1

BIICSRoW

23

OECD Environmental Outlook (2012) projection using ENV-Linkages modelPolicy steps to build a low-carbon economy
1.

Set clear, long-term, more stringent and economy-wide
GHG mitigation targets

2.

Put a price on carbon, preferably through market-basedinstruments

3.

Reform fossil fuel support policies

4.

Foster innovation and support new clean technologies in a« technology-neutral » way

5.

Complement carbon pricing with well-designed
regulations

24

An Environmental Outlook to 2050
Thank you!
More information on the OECD Environmental Outlook to 2050:
www.oecd.org/environment/outlookto2050

More information on the OECD modelling work:www.oecd.org/environment/modelling

Directly contact me at:
Rob.Dellink@oecd.org
25