OECD Environmental Outlook to 2050

15-03-2012 | Publication

Based on joint modelling by the Organisation for Economic Co-operation and Development (OECD) and the PBL Netherlands Environmental Assessment Agency the Environmental Outlook to 2050 looks ahead to the year 2050 to ascertain what demographic and economic trends might mean for the environment. It concludes that urgent action is needed now, so that the significant costs of inaction can be avoided, both in economic and human terms.

Environmental policy needs more decisive action

Over the last four decades, human endeavours have unleashed unprecedented economic growth in the pursuit of higher living standards. The world’s population has increased by over 3 billion since 1970, whereas the size of the world economy has more than tripled. Although this growth has pulled millions of people out of poverty, it has been unevenly distributed and has occurred at significant cost to the environment. Natural assets have been and continue to be depleted, with the services they deliver already compromised by environmental pollution. Providing for a further 2 billion people by 2050 and improving living standards for all will challenge our ability to manage and restore those natural assets on which all life depends.

What could the environment look like in 2050?

By 2050, the Earth’s population is expected to have increased from 7 billion to over 9 billion people. Coupled with expected higher living standards across the world, the global Gross Domestic Product (GDP) is projected to almost quadruple despite the recent recession. Without new policy action, a world economy four times larger than that of today is projected to use about 80 procent more energy by 2050. This Outlook focuses on four urgent areas:

  • More disruptive climate change is likely to be locked in
  • Biodiversity loss is projected to continue
  • Freshwater availability will be strained even further in many regions
  • Effects of urban air pollution continue to worsen

What policies could change this projection?

Well-designed policies may reverse the trends projected in the Outlook scenario. Given the complexity of the environmental challenges, a wide array of policy instruments is needed, often in combination.

  • Make pollution more costly than greener alternatives; e.g. with environmental taxes and emissions trading schemes. Such market-based instruments may also generate much-needed fiscal revenues.
  • Value and price the natural assets and ecosystem services; e.g. through water pricing as an effective way of allocating scarce water, payments for ecosystem services, and nature park entrance fees, etc.
  • Remove environmentally harmful subsidies;
  • Devise effective regulations and standards; e.g. to safeguard human health or environmental integrity, and 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 research and development (R&D).

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