1. OECD Environmental
Outlook to 2050:
The Consequences of Inaction
March 15, 2012
2. Environmental Outlook to 2050: Introduction
What is it?
• Projects demographic and economic trends to 2050, and
their impacts on the environment without more ambitious
policies = the “Baseline” scenario
• The “Baseline” scenario is…
– not an acceptable future
– calls for urgent action now to avoid the costs and
consequences of inaction
• The Outlook examines policies that could change that picture
for the better (via policy simulations)
• Joint economic-environment modelling by the OECD and
the PBL Netherlands Environmental Assessment Agency
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3. Environmental Outlook to 2050
Structure of the Report
• Executive Summary
• 1. Introduction
• 2. Socioeconomic Development
• 3. Climate Change
• 4. Biodiversity
• 5. Freshwater
• 6. Health and Environment
• Annex on the Modelling Framework
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4. SOCIO-ECONOMIC DEVELOPMENTS:
World economy will nearly quadruple by 2050
Projections for real gross domestic product: Baseline, 2010-2050
OECD BRIICS RoW US China India
350 000
Billions of constant 2010 USD
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. 4
Source: (OECD, 2012) OECD Environmental Outlook to 2050; output from ENV-Linkages.
5. CLIMATE CHANGE:
GHG emissions to increase by 50% by 2050
GHG emissions by region, Baseline
OECD AI Russia & rest of AI Rest of BRIICS ROW
90
GtCO2e
80
70
60
50
40
30
20
10
0
2010 2015 2020 2025 2030 2035 2040 2045 2050
5
Source: (OECD, 2012) OECD Environmental Outlook to 2050; output from ENV-Linkages.
6. CLIMATE CHANGE:
Global temperature to increase by 3-6°C by 2100
CO2 atmospheric concentrations
Source: (OECD, 2012) OECD Environmental Outlook to 2050, Baseline projection
using IMAGE model suite
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7. CLIMATE CHANGE: Human and economic costs of more extreme
weather events, crops & infrastructure at risk, etc.
Change in annual temperature between 1990 and 2050
Source: (OECD, 2012). OECD Environmental Outlook to 2050; output from 7
IMAGE model suite
8. HEALTH & ENV : Urban air pollution to become the top
environmental cause of premature deaths by 2050
Global premature deaths from
selected environmental risks: Baseline, 2010 to 2050
Particulate Matter
Ground-level ozone
Unsafe Water 2010
Supply and
Sanitation* 2030
2050
Indoor Air Pollution
Malaria
0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0
Deaths (millions of people)
8
Source: (OECD, 2012), OECD Environmental Outlook to 2005; output from IMAGE
9. HEALTH & ENV: Urban air pollution is already worse than
WHO safe levels in most cities
PM10 concentration in major cities: Baseline, 2010-2050
South
Asia*
Africa
China
2010
Indonesia
India 2030
Russia
2050
Brazil
OECD
0 20
20 40 60 80 100 120 140 160 180 200 220
WHO Air Quality Guideline μg/m3
* The region South Asia excludes India 9
Source: (OECD, 2012), OECD Environmental Outlook to 2050; output from IMAGE
10. WATER: Global water demand to increase by 55% by 2050
Global water demand: Baseline scenario
Km3
6 000
5 000 electricity Rapidly growing
4 000
manufacturing water demand from
3 000
cities, industry and
livestock energy suppliers will
2 000
domestic
challenge water for
1 000
irrigation to 2050.
irrigation
0
2000 2050
World
10
Source: (OECD, 2012), OECD Environmental Outlook Baseline; output from IMAGE
11. WATER: In 2050, 4 out of 10 people will live in
river basins under severe water stress
2000 (6.1 Bn) 2050 (9.2 Bn)
People under 3.9
no or low 3.2 Bn
3.2 Bn
Bn
water stress
People under
1.3
1.3 1.4
medium
water stress
Nearly half of the world
People under 1.6 population is projected 3.9
severe water to live under severe Bn
stress water stress in 2050
= 200MM OECD BRIICS Rest of the world
2000
2050
12. WATER: Water pollution from urban sewage to increase 3-fold
Nitrogen effluents from wastewater: baseline
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Source: OECD Environmental Outlook Baseline; output from IMAGE
13. WATER: 1.4 billion people still without access
to sanitation in 2050
Population lacking access to…
…improved water source 2 000 …sanitation facilities
1 800
OECD BRIICS RoW
1 100 1 600
1 000
1 400
900
800 1 200
700
1 000
600
500 800
400
millions of people
600
300
400
200
100 200
0
1990 2010 2030 2050 1990 2010 2030 2050 0
1990 2010 2030 2050 1990 2010 2030 2050
Urban Rural
Urban Rural
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Source: (OECD, 2012), OECD Environmental Outlook to 2050; output from IMAGE
14. BIODIVERSITY:
Global biodiversity to decline by a further 10% by 2050
Terrestrial mean species abundance (MSA) by region: Baseline
2010 2020 2030 2050
80%
70%
Mean species abundance
60%
50%
40%
30%
20%
10%
0%
RoW
America
World
Europe
Japan/Korea
Russia
Australia/NZ
Southern
Brazil
Indonesia
China
South Asia
North
Africa
14
Source: (OECD, 2012), OECD Environmental Outlook Baseline; output from IMAGE
15. BIODIVERSITY:
Climate change is the fastest growing driver of loss
Effects of different pressures on terrestrial MSA: Baseline
100%
Infr+Encr+Frag
90% Climate Change
Nitrogen
80% Former Land-Use
MSA
Forestry
70%
Pasture
Bioenergy
60%
Food Crop
Remaining MSA
0- 50%
2010 2030 2050 2010 2030 2050 2010 2030 2050 2010 2030 2050
OECD BRIICS RoW World
RoW = rest of the world. Infra+Encr+Frag = infrastructure, encroachment and ecosystem
fragmentation 15
Source: (OECD, 2012), OECD Environmental Outlook to 2050; output from IMAGE
16. POLICY ACTION: Act now – because delay is costly
Delaying climate action would increase the global cost of GHG
mitigation by nearly 50% by 2050, and could make it unaffordable
Real income in 2050 (% deviation from baseline)
Optimal mitigation: Cancun pledges:
450 ppm Core
450ppm Delayed action
450 ppm delayed action
0%
-1%
-2%
-3%
-4%
-5%
-6%
-7%
-8%
-9%
-10%
Source: OECD (2012), OECD Environmental Outlook to 2050, output from
ENV-Linkages model
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17. POLICY ACTION: What policies do we need?
• Make pollution more costly than greener
alternatives
– e.g. through environmental taxes and emissions
trading schemes. These can also generate much-
needed fiscal revenues.
• Value and price the natural assets and
ecosystem services
– e.g. through water pricing, which is an effective
way of allocating scarce water; payments for
ecosystem services, natural park entrance charges.
• Remove environmentally harmful
subsidies
– an important step in pricing resources and pollution
properly (e.g. to fossil fuels, irrigation water).
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18. POLICY ACTION: Environmental taxes
Revenues from environmentally related taxes in per cent of GDP1
1. Includes: taxes on energy products, vehicles, pollutants and natural resources, but Excludes: royalties and
taxes on oil and gas extraction.
Source: OECD-EEA database on instruments used for environmental policy,
wwww.oecd.org/env/policies/database
19. The importance of pricing: water conservation
(% ownership against water fee structure)
Source: OECD (2011), Greening Household Behaviour: The Role of Public Policy
20. POLICY ACTION:
Why make CO2 cheaper if you’re trying to make it scarcer?
Impacts on GDP in 2050 of unilateral phase-out of fossil fuel consumer
subsidies in emerging and developing countries
(% deviation from baseline)
(1) Middle East & Northern Africa
(2) Other Asian, African and Latin American Emerging economies
Source : OECD (2012), OECD Environmental Outlook to 2050; OECD ENV-Linkages Model ;
based IEA subsidies data for the year 2009
21. POLICY ACTION: Fossil fuel support in OECD countries
Note: This graph is based on an arithmetic sum of the individual support measures identified for a sample of
21 OECD countries, i.e. the 24 OECD countries included in the inventory net of those countries for which
estimates have not been collected yet (Chile, Iceland and Luxembourg). It reflects the value of tax relief
measured under each jurisdiction’s benchmark tax treatment. The estimates do not take into account
interactions that may occur if multiple measures were to be removed at the same time
Source: OECD (2011), Inventory of Estimated Budgetary Support and Tax Expenditures for Fossil Fuels.
22. POLICY ACTION: What policies do we need?
• Devise effective regulations and
standards
– e.g. to safeguard human health and
environmental integrity
– for promoting energy efficiency
• Encourage green innovation
– e.g. by making polluting production and
consumption modes more expensive, and
investing in public support for basic R&D
– e.g. attracting private sector investment
• Facilitate better consumer choices
– e.g. through energy and water efficiency labelling,
organic food labels, information, etc.
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23. POLICY ACTION: Clear policy signals are needed
to drive innovation
Patenting activity pre- and post-Kyoto Protocol’s adoption
(3-year moving average, indexed on 1990=1.0)
Source: OECD (2010), The Invention and Transfer of Environmental Technologies
24. POLICY ACTION: Recognition & Use of
Energy-Efficiency Labels
Source: OECD (2011), Greening Household Behaviour: The Role of Public Policy
25. POLICY ACTION: Mainstreaming Green Growth
• Maximise synergies and co-benefits
– e.g. tackling local air pollution can cut GHG emissions while reducing
the economic burden of health problems
– e.g. climate policy can also help protect biodiversity if GHG emissions
are reduced by avoiding deforestation.
• Integrating environmental objectives in
economic and sectoral policies
– e.g. energy, agriculture, transport, development
– ensuring coherence with policies in these areas can have greater
impacts than environmental policies alone.
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