Environmental (and social) Outlook to 2050

The OECD recently released its Environmental Outlook to 2050 report, subtitled ‘The Consequences of Inaction’. The English summary can be found here and key facts and figures here. As you might guess, it makes for grim reading. Here are some of the key points:

  • World population is expected to increase from 7 billion today to over 9 billion in 2050.
  • World GDP is projected to almost quadruple by 2050, despite the recent recession.
  • Cities are likely to absorb the total world population growth between 2010 and 2050. By 2050, nearly 70% of the world population is projected to be living in urban areas.
  • By 2050, without new policies a world economy four times larger than today is projected to need 80% more energy in 2050 without new policy action.
  • By 2050, without new policies greenhouse gas emissions are projected to increase by 50%, primarily due to a 70% growth in energy-related CO2 emissions.
  • The atmospheric concentration of greenhouse gases could reach 685 parts per million (ppm) CO2-equivalents by 2050. As a result, global average temperature is projected to be 3°C to 6°C above pre-industrial levels by the end of the century.
  • The greenhouse gas mitigation actions pledged by countries in the Cancún Agreements at the United Nations Climate Change Conference will not be enough to prevent the global average temperature from exceeding the 2°C threshold, unless very rapid and costly emission reductions are realised after 2020. They are more in line with a 3°C increase.
  • The Outlook suggests that global carbon pricing sufficient to lower greenhouse gas emissions by nearly 70% in 2050 compared to the Baseline scenario and limit greenhouse gas concentrations to 450 ppm would slow economic growth by only 0.2 percentage points per year on average. This would cost roughly 5.5% of global GDP in 2050. This pales alongside the potential cost of inaction on climate change.
  • Delaying action is costly. Delayed or only moderate action up to 2020 (such as implementing the Copenhagen/Cancún pledges only, or waiting for better technologies to come on stream) would increase the pace and scale of efforts needed after 2020. It would lead to 50% higher costs in 2050 compared to timely action, and potentially entail higher environmental risk.
  • Support to fossil fuel production and use amounted to between US$45-75 billion per annum in recent years in OECD countries. Developing and emerging economies provided over US$400 billion in fossil fuel consumer subsidies in 2010 according to International Energy Agency estimates.
  • By 2050, without new policies freshwater availability will be further strained, with 2.3 billion more people than today (in total over 40% of the global population) projected to be living in river basins under severe water stress especially in North and South Africa, and South and Central Asia.
  • Global water demand is projected to increase by some 55%, due to growing demand from manufacturing (+400%), thermal electricity generation (+140%) and domestic use (+130%). In the face of these competing demands, there will be little scope for expanding irrigation water use under this scenario. The main increases in water demand will be in the emerging economies and developing countries.
  • The MDG for sanitation will not be met by 2015; by 2050 1.4 billion people are projected to be still without access to basic sanitation.

It is good to see the OECD focussing more on the costs of inaction – particularly on climate change. Our policy debates among politicians in Australia focus overwhelmingly on the costs of action, without taking seriously enough the potentially catastrophic and irreversible costs of inaction. It’s like letting your house burn down because you’re only thinking about the cost of the water that’s needed to put out the fire.

The OECD report is described as an ‘environmental outlook’, but anyone interested in the social and economic implications should take a good look at this report. The social consequences, particularly for the poor, of failing to arrest climate change and other forms of environmental degradation will be  … well, ‘severe’ hardly begins to describe it.

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