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OECD Environmental Outlook to 2050: The Consequences of Inaction
Rob Dellink
Environment Directorate, OECD
Paris, 21 June 2013
2
Environment
Agriculture
Economy
Energy
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)
3
Figure 1. Modelling principle for the Environmental Outlook
Environmental Outlook to 2050: Introduction
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• Computable General Equilibrium (CGE) model
• Full description of economies
• Simultaneous equilibrium on all markets
• Structural trends, no business cycles
• All economic activity is part of a closed, linked system
• World divided into 15 regions
• Each economy divided into 26 sectors (with focus on energy)
• Recursive-dynamic: horizon 2005-2050; vintages of capital
• Link from economy to environment
• Greenhouse gas emissions linked to economic activity
• Model assesses the costs of policies, not their environmental benefits
The ENV-Linkages model
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• Integrated Model to Assess the Global Environment
• Full description of physical earth system
• Key drivers: population, economic development, technology
• Focus on energy systems and land use (incl. carbon cycle)
• Geographically explicit
• World divided into 24 geographic regions
• Land use mapped on a 0.5 x 0.5 degree grid of the world
• Links to:
• Agricultural economy (LEITAP model)
• Health (GISMO model)
• Biodiversity (Globio model)
The IMAGE suite of models
6 Environment Directorate
The “Baseline” scenario
• Projections of socioeconomic developments and their environmental consequences to 2050
• No new policies assumed
• A reference projection based on historical trends and gradual convergence of regions
Simulations of policy actions
• Simulations of new policies can be introduced and compared against the Baseline of no new policies
• The differences shed light on economic and environmental impacts
• Illustrative rather than prescriptive
A scenario analysis
Linking economy and environment
Health &
environment
Local air
pollution
(under
construction)
Land use
Yie
ld
eff
icie
nc
y
Biodiversity
Energy use
Fu
el p
ric
es
En
erg
y
eff
icie
nc
y
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Deforestation GHG emissions
Climate
change
Water stress
& water
quality
Economic growth
Population & demographics Capital supply Natural resources
Bioenergy
0
10
20
30
40
50
60
70
0 1 2 3 4 5 6 7 8 9 10
Population (billions)
WORLD
GDP per capita ('000 USD)
RoW OECD
OECD
RoW
BRIICS
WORLD
GDP per capita ('000 USD)
BRIICS
0
10
20
30
40
50
60
70
0 1 2 3 4 5 6 7 8 9 10
Population (billions)
WORLD
GDP per capita ('000 USD)
RoW OECD
OECD
RoW
BRIICS
WORLD
GDP per capita ('000 USD)
BRIICS
0
10
20
30
40
50
60
70
0 1 2 3 4 5 6 7 8 9 10
Population (billions)
WORLD
GDP per capita ('000 USD)
RoW OECD
OECD
RoW
BRIICS
WORLD
GDP per capita ('000 USD)
BRIICS
0
10
20
30
40
50
60
70
0 1 2 3 4 5 6 7 8 9 10
Population (billions)
WORLD
GDP per capita ('000 USD)
RoW OECD
OECD
RoW
BRIICS
WORLD
GDP per capita ('000 USD)
BRIICS
0
10
20
30
40
50
60
70
0 1 2 3 4 5 6 7 8 9 10
Population (billions) WORLD
GDP per capita ('000 USD)
RoW OECD
OECD
RoW
BRIICS
WORLD
GDP per capita ('000 USD)
BRIICS
GDP +124%
GDP +478%
GDP +458%
GDP +295%
Source: OECD (2012), OECD Environmental Outlook to 2050, Baseline projection using ENV-Linkages model
Crop area12.9%
grazing
area26.1%
forest area28.4%
built up
area0.5%
other
natural area
32.2%
2010Crop area
10.5%
grazing area
24.4%
forest area
31.6%
built up
area0.2%
other natural
area
33.3%
1970
Projections for land use
Source: Outlook Baseline projection using IMAGE model suite
Increased demand for agricultural land leads to continued deforestation and loss of
natural area in coming decades, but later the competition for land is projected to ease
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Projections for land use
Source: Outlook Baseline projection using IMAGE model
Competition for land is projected to increase substantially in the coming decade,
but could ease somewhat in later decades
10
30
35
40
45
50
55
60
65
70
1980 1990 2000 2010 2020 2030 2040 2050
Ag
ricultura
l are
a (
mill
ions o
f km
2) FAO/IMAGE
IAASTD
MEA
Outlook Baseline
0 -
0
50
100
150
200
250
300
350
400
450
2010 2015 2020 2025 2030 2035 2040 2045 2050
Index 2010=100
Baseline
450 ppm core scenario
The cost of action is still affordable…for now
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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
Source: OECD (2012), OECD Environmental Outlook to 2050, Baseline projection using ENV-Linkages model
GDP -5.5%
GHG emissions -69.5%
GDP
GHG emissions
Environmental Outlook to 2050: Health & Env.
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Global premature deaths from particulate matter and ground-level ozone
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
Particulate MatterGround-level ozone
Death
s (
millio
ns o
f p
eo
ple
)
2010 2030 2050
Source: OECD Environmental Outlook Baseline; output from IMAGE
Source: OECD Environmental Outlook Baseline; output from IMAGE
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Environmental Outlook to 2050: Water
Global water demand: Baseline scenario, 2000 and 2050
irrigation domestic livestock manufacturing electricity
0
1 000
2 000
3 000
4 000
5 000
6 000
2000 2050 2000 2050 2000 2050 2000 2050
World OECD BRIICS RoW
Km
3
+400%
+130%
+140%
Source: OECD Environmental Outlook Baseline; output from IMAGE
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Environmental Outlook to 2050: Biodiversity
Remaining MSA
Food Crop
Bioenergy
Pasture
Forestry
Former Land-Use
Nitrogen
Climate Change
Infr+Encr+Frag
50%
60%
70%
80%
90%
100%
2010 2030 2050
MS
A
0-
Effects of different pressures on terrestrial MSA: Baseline, 2010 to 2050
Key messages
Between 2010 and 2050, …
• …world GDP is projected to quadruple, with the share of BRIICS to
increase to above 40% – high income has mixed effects on
environmental pressures
• …urban population could grow by 2.8 billion people, while rural
population shrinks by 0.6 billion – more dense population has mixed
effects on environmental pressures.
• …world energy demand is projected to increase by 80%, with largely
unchanged fuel mix – this implies increasing greenhouse gas
emissions.
• …competition for land will first intensify and later ease somewhat;
slowdown in deforestation is projected to continue.
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Challenges are so big that we can’t afford expensive solutions
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
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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
Contact me directly at:
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