Simon Upton, OECD - What the World Environment Might Look Like in 2050 and What We Can do About It

1. Environmental Outlook to 2050
Dublin, Ireland
27th June 2012
Simon Upton
Director
OECD Environment Directorate
For more information, see
www.oecd.org/greengrowth

2. GDP per capita ('000 USD)
70
GDP +124%
60
50
40
GDP +478%
OECD
30 GDP +295%
20
GDP +458%
WORLD
10
BRIICS
RoW
0
0 1 2 3 4 5 6 7 8 9 10
OECD WORLD Population (billions)
RoW BRIICS
Population (billions)
Source: OECD (2012), OECD Environmental Outlook to 2050, Baseline projection using ENV-Linkages model

3. Population and urbanisation
80% 10,000,000
Percentage of Urban %
Total Population
Population 9.2 Bn
Rural % (thousands) 9,000,000
70%
Total population 70%
8,000,000
60% Urban Population
7,000,000
50% 6.4 Bn
6,000,000
40% 5,000,000
4,000,000
30% 30%
3,000,000
20%
2,000,000
10%
1,000,000
0% 0
1950
1955
1960
1965
1970
1975
1980
1985
1990
1995
2000
2005
2010
2015
2020
2025
2030
2035
2040
2045
2050
Source: Source: Population Division of the Department of Economic and Social
3
Affairs of the United Nations Secretariat, World Population Prospects: The 2006
Revision and World Urbanization Prospects: The 2007 Revision,

4. The emergence of 3 billion middle-class consumers
will fuel future demand
4.88
Global middle class1
Billions of people
3.25
3 billion
1.85 0.03
ROW
Latin America 3.23
North America
Europe 1.74
Asia-Pacific 0.53
2009 2020 2030
1 Based on daily consumption per capita ranging from $10 to $100 (in purchasing power parity 4
terms) SOURCE: OECD (2011), Perspectives on Global Development: Social Cohesion in
a Shifting World

5. Growth – not just a developing country concern
Demographics
Debt
Jobs
Percent of GDP
3.0 20.0
Per cent of GDP To return to 2007
Millions
7.0
16 employment levels
Changes in age related public spending to 2025 15.0
2.0
6.0
14
Deficit improvement to achieve 60%
12 debt to GDP by 2025 10.0
5.0 Pensions
1.0
10 Employment growth 5.0
Long term care
4.0
8 (%) Health
0.0 (Left hand axis) 0.0
3.0
6
2.04 -5.0
-1.0
2 Additional
1.0 unemployed since -10.0
0
-2.0 2007
0.0 (Right hand axis) -15.0
-1.0
-3.0 -20.0
1996 1998 2000 2002 2004 2006 2008 2010 2012

6. Linking economy and environment
Population & demographics Capital supply Natural resources
Fuel prices Economic growth
efficiency
efficiency
Energy
Yield
Energy use Bioenergy Land use
Local air GHG emissions Deforestation
pollution
(under
construction)
Health & Climate Water stress Biodiversity
environment change & water
quality
6

7. Environmental Outlook to 2050: Climate Change
GHG emissions by region: Baseline, 2010-2050
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
Source: OECD Environmental Outlook Baseline; output from ENV-Linkages. 7

8. Environmental State and Pressures
1 000 CO2 concentrations
900
3 - 6 C by 2100
CO2 concentration (ppm)
800
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

9. GHG emissions intensity and GDP
Emissions intensity
(kg CO2e / 2010 USD PPP)
1.0 RoW GHG
RoW
emissions
0.9 13 GtCO2e
BRIICS GHG
BRIICS 0.8 emissions
19 GtCO2e
0.7 World GHG
emissions
WORLD 48 GtCO2e
0.6
0.5 OECD GHG
emissions
OECD 0.4 16 GtCO2e RoW GHG BRIICS GHG
World GHG
emissions emissions
emissions
0.3 22 GtCO2e 39 GtCO2e
81 GtCO2e
OECD GHG
0.2 emissions
19 GtCO2e
0.1
0.0
0 50 000 100 000 150 000 200 000 250 000 300 000 350 000
RoW OECD WORLD
BRIICS
GDP (billions 2010 USD PPP)
Source: OECD (2012), OECD Environmental Outlook to 2050, Baseline projection
using ENV-Linkages model

10. 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
GtCO2e Outlook Baseline 450 ppm Core
130
120 450 ppm Delayed Action 450 ppm Accelerated Action
110
100
90
80
70
60
50
40
30
20
10
0
2010 2020 2030 2040 2050 2060 2070 2080 2090 2100
Source: OECD (2012), OECD Environmental Outlook to
2050, Baseline projection using ENV-Linkages model 10

11. 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
UNEP (2010) range Outlook Baseline
GtCO2e 450 ppm Core 450 ppm Delayed Action
450 ppm Accelerated Action 550 ppm Core
60 Baseline GHG
emissions in 2050
= 81 GtCO2e
55
50
45
40
35
30
25
0- 20
2010 2015 2020 2025 2030 2035 2040 2045 2050
Source: OECD (2012), OECD Environmental Outlook to 2050, Baseline
projection using ENV-Linkages model 11

12. 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
Baseline GDP -5.5%
350
450 ppm core scenario
300
GDP
250
200
150 GHG emissions
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
12

13. Environmental Outlook to 2050: Biodiversity
Effects of different pressures on terrestrial MSA: Baseline, 2010 to 2050
100%
Infr+Encr+Frag
90%
Climate Change
Nitrogen
Former Land-Use
80%
MSA
Forestry
Pasture
70% Bioenergy
Food Crop
60%
Remaining MSA
0- 50%
2010 2030 2050
13
Source: OECD Environmental Outlook Baseline; output from IMAGE

14. Environmental Outlook to 2050: Water
Global water demand: Baseline scenario, 2000 and 2050
6 000
irrigation domestic livestock manufacturing electricity
Km3
5 000 +140%
4 000
+400%
3 000
+130%
2 000
1 000
0
2000 2050 2000 2050 2000 2050 2000 2050
14
Source: OECD Environmental Outlook Baseline; output from IMAGE

15. Water use reduction (per household)
Water Use Reduction Strategy: North American Household (Temperate
Region)
350
300
Water Consumption (L/cap./day)
250
200 Leak detection & repair
Water efficiency
150 Rain water capture
Grey water harvesting
100
50
0
Conventional Low Water
Source: Based on Toronto data; OECD 15

16. Environmental Outlook to 2050: Water
Nitrogen effluents from wastewater: Baseline, 2000 and 2050
OECD India China Africa Rest of the world
Millions of tonnes of N / year
20
18
16
14
12
10
8
6
4
2
0
2000 2050
16
Source: OECD Environmental Outlook Baseline; output from IMAGE

17. Environmental Outlook to 2050: Water
17
Source: OECD Environmental Outlook Baseline; output from IMAGE

18. Environmental Outlook to 2050: Health & Env.
Global premature deaths from particulate matter
and ground-level ozone
4.0
2010 2030 2050
Deaths (millions of people)
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
Ground-level ozone Particulate Matter
18
Source: OECD Environmental Outlook Baseline; output from IMAGE

19. Challenges are so big that we can’t afford expensive solutions

20. Environmental Outlook to 2050: What policies do we need?
• Make pollution more costly
20
Source: OECD Environmental Outlook Baseline; output from IMAGE

21. Fuel taxes, pre-tax fuel prices and energy use in the transport sector, per unit
of GDP
90
90
United States 1.0
United States
Tonnes oil equivalent per million USD GDP unit
80 1.0
80
Petrol use per GDP unit use per GDP unit
Petrol
70 Diesel use per GDP unit use per GDP unit
70 Diesel
Other use per GDP unit use per GDP unit
Other 0.8
Petrol tax rate, € Petrol tax rate, €
0.8
60
60 Diesel tax rate, €
Rotterdam spot price, 98 octane unleaded petrol
50 0.6
50 0.6
€ per litre
40
40
0.4
0.4
30
30
20
20
0.2
0.2
10
10
0
0 0.0
0.0
94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09
94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09
Source: IEA’s energy balances

22. Fuel taxes, pre-tax fuel prices and energy use in the transport sector, per unit
of GDP
90 Petrol use per GDP unit
Diesel use per GDP unit Turkey
United States 1.0
1.0
Tonnes oil equivalent per million USD GDP unit
80
Other use per GDP unit
70 Petrol use per GDP unit
Petrol tax rate, € Diesel use per GDP unit
Other use per GDP unit 0.8
0.8
60
60 Diesel tax rate, € Petrol tax rate, €
Diesel tax rate, €
Rotterdam spot price, 98 octane Rotterdam spot price, 98 octane unleaded petrol
50
50 unleaded petrol 0.6
0.6
€ per litre
40
40
0.4
0.4
30
30
20
20 0.2
0.2
10
10
0 0.0
0 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 0.0
94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09
Source: IEA’s energy balances.

23. % of GDP
-1.0
-0.5
2.0
2.5
0.0
0.5
1.0
1.5
3.0
3.5
4.0
4.5
Mexico
United States
Chile
Canada *
New Zealand
Other
Japan
* 2009 figure
Spain
Australia
France
Poland
Hungary
Slovak Republic *
Switzerland
Belgium
Iceland
Motor vehicles
Germany
Luxembourg
Norway
Austria
Portugal
Energy
Ireland
United Kingdom
Greece
Italy
Sweden
Korea
Finland
Czech Republic
Estonia
Slovenia
Israel
Netherlands
Turkey
Denmark
& raise revenues (Revenues in % of GDP, 2010)
Weighted average
Brazil
China
Source: OECD/EEA database on instruments for environmental policy; www.oecd.org/env/policies/database.
Colombia
Environmentally related taxes: benefit the environment, innovation
Costa Rica *
South Africa

24. Environmental Outlook to 2050: What policies do we need?
• Make pollution more costly
• Value and price the natural assets and
ecosystem services
24
Source: OECD Environmental Outlook Baseline; output from IMAGE

25. Mismeasurement and mismanagement
% of GNI Forests & protected areas
Subsoil Assets
Pasture Land
Crop
28% of
Sub-Saharan Africa Natural Capital wealth
Education
Net Produced Capital
saving +3.3%
Net Foreign Assets
7.6% Resource
depletion Intangible Capital
-16.1%
-2,000 0 2,000 4,000 6,000 8,000 10,000
Pollution
-1.0% USD 2005, per
capita
-6.2%
Adjusted net
savings
Source: World Bank Wealth of Nations

26. Better measurement and better management
Norway
Savings rate Wealth
Natural Capital Produced Capital
Education
Net Foreign Assets Intangible Capital
Net +6.0%
saving 1,000,000
Resource
26.2% depletion
800,000
-16.1% USD 280,000
Pollution per capita
-0.1% 600,000
400,000
16.2%
Adjusted 200,000
net
savings
0
OECD average, 6.8%
Norway OECD
-200,000
USD 2005, per capita
% of GNI
Source: World Bank Wealth of Nations

27. 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
27
Source: OECD Environmental Outlook Baseline; output from IMAGE

28. Why make CO2 cheaper if you’re trying to make it scarcer?
$45-75
USD $409 billion billion
2010 , developing $ 44
2010, in fossil
country fossil fuel billion, 201
fuel support
consumption 0, global
in OECD countries renewable
subsidies
electricity
subsidies
5 Income gains from unilateral removal of fossil fuel consumer subsidies in emerging and
developing countries (% change in HH income vs BAU)
4
3 6% less emissions
globally from removal
2 of these fossil fuel
subsidies
1
0
-1
-2
Oil-exporting India China Russia Rest of the World Non-EU Eastern
countries European
Source: OECD (2012), OECD Environmental Outlook to 2050, Baseline projection Countries
using ENV-Linkages model based on IEA data; OECD and IEA analysis see website:
www.oecd.org/iea-oecd-ffs 28

29. 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
29
Source: OECD Environmental Outlook Baseline; output from IMAGE

30. Israeli freshwater use (2009)a
Abstraction per capita per capita
Abstraction Intensity ofIntensity of use
use
el 220
Israel 220 Israel Israel 86.4
ny 390
Germany 390 Germany Germany 27.6 27.6
y Turkey 560 560 Turkey 17.8
Turkey 17.8
ia Australia 640 640 Australia 3.6
Australia 3.6
n Spain 710 710 Spain Spain 29.2 29.2
es
United States 1 630 1 630 United States 19.6
United States 19.6
0 400 800 400 800 1200 1600 2000 2400
0 1200 1600 2000 2400 0 20 0 40 20 60 40 80 60 100 8
m3/ capita m3/ capita abstraction as %
abstraction as %
of internal resources resource
of internal
available year.
a) Or latest available year.
CD, Environment Environment Directorate.
Source: OECD, Directorate.
a) Or latest available year 30
Source: OECD, Environment Directorate.

31. Israeli economic efficiency of agricultural water use, 1986-2008
Indice 1986=100
140
120
100
80
60
40
Valor de la producción agrícola por m3 de agua utilizada para irrigación
20 Precio real del agua dulce para agricultura (deflactado con el índice de
precios al consumidor)
0
1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008
Source: OECD (2010), OECD Review of Agricultural Policies: Israel, 2010 . 31

32. General environmental management
Israeli Patents in selected environment & climate-related
technologies, 1995-2008
technologies
Número de of
number
patents
patentes
100
90 Total patents de patentes
Número total
80
Reducción de la
Water pollution abatement
70
contaminación del agua
60
50
40
30
20
10
0
1995 1997 1999 2001 2003 2005 2007
El número de patentes está basado en la fecha de prioridad, el país de residencia del inventor y utiliza 32
contabilización fraccionada de las solicitudes PCT en fase internacional (denominaciones de EPO).
Fuente: OECD (2011), OECD Patent Statistics Database; OECD, Environment Directorate.

33. You can’t manage what you don’t measure

34. A framework for green growth indicators
1 Indicators monitoring environmental and resource productivity
2 Indicators monitoring the natural asset base
3 Indicators monitoring the environmental quality of life
4 Indicators monitoring economic opportunities and policy responses
The socio-economic context and characteristics of growth

35. Proposed headline indicators
Environmental and resource productivity
1 CO2 productivity Carbon productivity
2 Non-energy material productivity Resource productivity
3 Multifactor productivity (incl. environmental services) Multifactor productivity
The natural asset base
Renewable and non-
4 Sustainability index for natural resources
renewable stocks
5 Land use and cover Biodiversity and ecosystems
Environmental quality of life
Environmental health and
6 Air pollution: population exposure to PM2.5
risks
Economic opportunities and policy responses
Placeholder – no indicator specified

36. Word analysis of Rio+20 Outcome
"Future We Want" word occurrences
160
140
120
Number of occurrences
100
80
60
40
20
0
Source:OECD analysis based on UNCSD Rio+20 Outcome Text: 36
“The Future We Want”

37. What you don’t know can hurt you
www.oecd.org/environment/outlookto2050

38. Rise of the mega-cities
50
Population (Millions) 29 mega-cities in 2025
45
Delhi
40
21 mega-cities in 2012 Tokyo
35
Mumbai
Mexico City
30
25 Sao Paolo
9 mega-cities in 1985 NYC
20 Beijing
15 NYC only mega-city in 1950 Rio
London
10 Mega-city =
Largest cities in the world 7000 BC until 1800 10M
5 Rome Baghdad Kaifeng
(900k) (1M) Beijing
Uruk Mari (1.2M) Constantinople
Jericho (500k) Ur Babylon
(200k )
(400k)
(100k) (100k)
(600k) (1M)
0
(- = BC) -7000 -3500 -2500 -2100 -700 200 600 900 1200 1500 1800 1825 1900 1950 2007 2020 2025
Source: http://geography.about.com/library/weekly/aa011201a.htm, citing
38
Chandler, T. (1987) Four Thousand Years of Urban Growth: An Historical
Census, Edwin Mellen Press.