Netherlands Environmental Assessment Agency, 2009
This report looks into the possible developments in the climate and energy system on the one hand, and biodiversity and land use on the other hand. Two scenarios are presented:
Trend Scenario (explores the risks of climate change and biodiversity loss).
In the Trend scenario, it is assumed that the world continues to develop in a business-as-usual (BAU) pattern, which serves as a reference scenario by extrapolating trends for the main parameters of the last decades. In this scenario, there are no explicit policies to address main environmental challenges. The Trend scenario is in line with the so-called A-worlds in earlier scenario work (IPCC, 2000). These A-worlds feature a strengthening of corporate capitalism and market mechanism, after the proclaimed ‘End of History’, rapid globalisation of goods and financial markets, a new technological wave in the form of ICT, and the rapid economic growth in some major world regions, notably
Population size dynamics in the Trend scenario follows the UN medium scenario, increasing to 9 billion around 2050, and slowly declining to around 8 billion by 2100. This projection lies within the uncertainty range of published projections over the last few years. In terms of economic growth, current expectations are followed: economic growth, in general, will be higher in low-income countries than in high-income countries, but this will not result in income convergence. Based on population dynamics (ageing of the population) and declining total factor productivity (TFP) improvement, economic growth in high-income countries is expected to slow down – but, on a global scale, this is compensated by an increasing share of faster growing low-income countries. The key question with respect to the Trend scenario is whether the growth in material flows could remain within the limits for climate change and biodiversity loss. In other words: is the collective outcome of such a world indeed a continuing smooth increase in quality of life for the average person, or will it meet its limits?
The Trend scenario is likely to lead to an increase in average global temperature of 4 °C above pre-industrial levels, by the end of the century. This implies that the climate policy target of 2 °C (chosen as an interpretation of preventing non dangerous climate change) would not be met. Such a degree of global warming is likely to lead to serious climate change. The scenario shows that greenhouse gas emissions will have more or less doubled, by 2050. Assuming that policymakers would like to limit the probability of overshooting the 2 °C target to less than 50%, or even 25%, emissions need would need to peak in about one to two decades, and be reduced by around 50% by the middle of the century. For achieving this, the energy production system should be very different from that under the Trend scenario. Moreover, all major developing countries, including China and Brazil, would have to participate in international climate policy, from 2020 onwards.
Challenge Scenario (Explores the pathway to bring a more environmentally sustainable future)
The Challenge scenario explores the result of policies developed to meet the climate and biodiversity objectives. This scenario is based on two normative choices:
- Greenhouse gases will be reduced in order to limit average global temperature increase to a maximum of 2ºC.
- Expansion of agricultural land will be limited in order to avoid further loss of biodiversity, from 2020 onwards.
The main objective of the Challenge scenario is to find out what kind of changes in the world’s energy and land-use systems would be required to meet the objectives for climate change and biodiversity loss. Given the enormous momentum behind the drivers in the Trend scenario, the force to deflect such trends to meet environmental targets is not a trivial task. As no feedback on population and economic growth was taken into account for the Trend scenario, population and economic growth in the Challenge scenario is assumed to equal that of the Trend scenario.In the Challenge scenario, a low-carbon economy could be achieved with currently identifiable technologies. The first steps would be to improve energy savings, increase use of renewable energy and carbon capture and storage, reduce deforestation, and reduce non-CO2 emissions. An attractive route is based on a further electrification of energy use. In that sense, considerable investments in the power grid would be needed. In the transport sector, energy efficiency could reduce emissions, in the short term. In the long term, however, a dramatic shift towards electric (or hydrogen) vehicles is required.Investments in the energy system (supply-side only) are estimated to be around 60,000 billion USD between 2000 and 2050 (i.e. around 1400 billion per year or 1.5% of GDP). Achieving the Challenge scenario could lead to a doubling of these costs. The macro-economic impacts of these costs are significantly smaller. However, economic and technical barriers are not the main obstacles to achieving the Challenge scenario. A shared sense of urgency and an international response is critically important. Given the need for reducing global emissions within one to two decades, emissions must be reduced substantially in both high- and low-income countries. The current proposals stated by OECD countries and low-income countries as part of the international climate policy negotiations clearly would not be enough to implement a 2 °C scenario. Significant delays in the negotiations would bring the 2 °C target out of reach.
