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Comparative Regional Economy <Lecture Note 8> 2013.12.12
CRE: World Regions by 2050
* Some parts of this lecture note are borrowed from some references for teaching purpose only.
Professor Yoo Soo Hong Thursday: 9-12 a.m. Office Hour: By Appointment E-mail: yshong123@gmail.com M.P. 010-4001-8060 Home Page: ://yoosoohong.weebly.com
1
Global Outlook
• Asia
• Australasia
• North Africa and Middle East
• Sub-Saharan Africa
• Western Europe
• and • North America
• and • Latin America
3.5%4.3% 4.6%
0.0%
2.0%
4.0%
6.0%
2011 2012 2013 -2016
4.3%
3.6%
4.2%
3.0%
3.5%
4.0%
4.5%
2011 2012 2013 -2016
3.1%
4.0%
4.7%
0.0%
2.0%
4.0%
6.0%
2011 2012 2013 -2016
4.4% 3.8%4.8%
0.0%
2.0%
4.0%
6.0%
2011 2012 2013 -2016
1.7%
-0.3%1.3%
-1.0%
0.0%
1.0%
2.0%
2011 2012 2013 -2016
1.8% 1.9% 2.2%
0.0%
1.0%
2.0%
3.0%
2011 2012 2013 - 2016
Source: Economic Intelligence Unit, March 2012
Source: Economic Intelligence Unit, March 2012
The global economy is on a narrow path of slow and fragile recovery. Many countries are struggling with a massive debt burden and high unemployment persisting to bog down their economies and hampering growth..
Oil and commodity prices remain high and will continue to put further pressure on the global economy.
According to the Economist Intelligence Unit’s (EIU) March economic outlook, world GDP is expected to grow by 2.1% on a market exchange rates basis in 2012, slowing down markedly from the previous two years.
Source: Economic Intelligence Unit, March 2012
Changes in Global Economic Risks
North American region
Asia pacific region
Middle East region
African regionLatin America & the Caribbean region
Greater Russia region
Europe region
Source: Energy Policy Scenarios to 2050, World Energy Council (values in mn tonnes)
Production (Mn tonnes)
Consumption (Mn tonnes)
Compounded annual growth rate consumption
Legend
0.9%0.9%
1.8%1.8%
1.2%1.2%
0.8%0.8%
- 2.4%
- 2.4%
- 1.2%
- 1.2%
- 0.9%
- 0.9%
Global Outlook
The economy grew by 1.7% in 2011, but grew by 2.8% in Q4 of 2011.
The inflation rate for 2011 doubled to 3.2% from 1.6% in 2010.
Growth prospects for Q1 2012 are around 2 to 2.2% on the back of a gain in consumer confidence’s subsequent retail sales and manufacturing.
Persistently high unemployment and risks of downturns in markets abroad will keep the FED’s policy rate at very low levels until even as late as 2014.
United States
European economic growth slowed during 2011 to 1.5% and is expected to contract further in 2012 to -0.3%, before a modest recovery in 2013.
Inflation should remain relatively low and contract to around 2.2% in 2012 from the 2.7% observed in 2011.
The European debt crises threatened to derail global recovery for the last two years
Europe
Manufacturing in Japan is already experiencing a v-shaped recovery after the March 2011 earthquake and tsunami.
GDP is expected to grow at around 1.5% in 2012 on the back of reconstruction activities and a recent upswing in machinery exports and local consumption.
Japan
Emerging Markets
The BRIC countries are recognised as having very large economies and populations, with unravelled growth potential in foreseeable years.
The Brazilian economy experienced rapid expansion in the last decade with strong economic growth
Russia experienced strong economic growth over the past few years, but manufacturing and foreign investment slowed down since the global downturn.
BRICS
The Next 11 consist of South Korea, Iran, Mexico, Turkey, Philippines, Indonesia, Egypt, Nigeria, Pakistan, Vietnam and Bangladesh.
These economies are smaller in size than the BRIC countries, but with its large population size and growth rates of above the global average, promises favourable opportunities for future investment and market growth.
The Next 11
Fears surrounding an economic downturn have lead EM central banks to either cut their interest rates or postpone monetary tightening during 2011.
Market expectations are that EM countries will outperform developed countries between 2013 - 2016, as interest rate differentials will favour investment into these EM countries over that of the OECD economies.
Key Drivers of Long-term GDP Growth
Growth in the physical capital stock, which is determined by new capital investment less depreciation of the existing capital stock
Growth in the labor force
Growth in the quality of labor (human capital), which is assumed to be related to current and projected average education levels in the workforce
Technological progress, which drives improvements in total factor productivity (TFP)
9
Other Emerging Economies
− Vietnam: it has the potential to be of similar scale to Turkey by 2050, although still only around 70% of the projected size of the UK economy.
− Nigeria: it stands out as having considerable growth potential, not far behind India in terms of projected annual growth, close to Turkey in terms of projected size and overtaking Egypt and South Africa to become the largest African economy by 2050.
− Pakistan also ranks relatively high in growth terms, due in part to having one of the highest projected population growth rates. recent political problems do not pose a barrier to fulfilling the country’s long-term economic potential. Political problems are major downside risk factors at present.
12
− Malaysia and Thailand have more solid track records of long-term economic growth.
− Saudi Arabia has more modest projected GDP per capita growth, reflecting its relatively high initial average income levels, but one of the fastest projected population growth rates up to 2050 according to the UN.
− At the bottom of the emerging market growth rankings are Russia and Poland. This reflects their much less favorable demographics with UN projections indicating declining, rapidly ageing populations in both countries over the period to 2050.
13
The ‘‘Market First’’ Scenario
- It is the high-growth, high-globalization, world peace scenario that is similar to many other optimistic projections that are often used as a starting point for discussing global futures. These assumptions produce another golden age of growth, with world growth and growth in most regions higher than in the last 20 or 50 years.
- Projected productivity gains include assumptions about both the creation and introduction of new technology into the production process, and the adoption of previously developed technology by the less-developed countries. There is clearly much scope for the latter leading to the possibility of enhanced growth rates, but there is also no scientific way of forecasting how much convergence will be achieved nor what growth enhancing or growth-retarding polices will be followed in each country.
14
Sources: 2006–50 from IFs, Market First scenario, model version 5.21, and by assumption. Historical data fromMaddison (2003) with extensions by author.
Economic Growth in the Market First and Trend Scenarios Compared to Historical Growth Rates
15
The Trend Growth Scenario
- In the Trend Growth scenario per capita growth rates in the non-OECD countries as a whole are less than a half percentage point per year below than in the Market First scenario, but the growth assumptions are cut drastically in the countries where most of the poverty is—sub-Saharan Africa, North Africa, and a few Asian states. The Market First scenario assumes very large increases in economic growth in these countries, compared to the recent past.
- In some regions the trend-growth assumptions do not do much to raise poverty because there is not much extreme poverty to begin with in the region or because the trend rates of economic growth are high Sub-Saharan Africa, which was helped in the Market First scenario by some extremely favorable assumptions about policy changes—if not regime changes—is seriously hurt. By 2050, the extreme poverty rate rises to over 1 billion people.
16
Developing World and Economic Growth Catch-up Selected developed and developing countries, 2005 and 2050, projected GDP per
capita in PPP terms . Source: Price Waterhouse Coopers 2013 figure 8.
http://www.pwc.com/gx/en/world-2050/pdf/world2050emergingeconomies.pdf
18
The Best Way to Promote Long-Run Economic Growth
- Free markets and private property are better at generating growth than
centralized government control of production, but a strong government
role is nonetheless essential to enforce the rules of peaceful economic
behavior and alleviate inevitable market failures.
- Trade and financial market liberalization is needed to spur competition and
the flow of investment funds, including increased access to developed-
country goods and capital markets.
- Democratic accountability of government is helpful, to keep both
corruption and predation from destroying incentives to work, save,
and invest, and to encourage growth spending on education, health,
and infrastructure.
19
Dreaming with BRICs: the Path to 2050
− Over the next 50 years, Brazil, Russia, India and China-the BRICs economies-could become a much larger force in the world economy. We map out GDP growth, income per capita and currency movements in the BRICs economies until 2050.
− The results are startling. If things go right, in less than 40 years, the BRICs economies together could be larger than the G6 in US dollar terms. By 2025 they could account for over half the size of the G6. of the current G6, only the US and Japan may be among the six largest economies in US dollar terms in 2050.
− The list of the world’s ten largest economies may look quite different in 2050. The largest economies in the world (by GDP) may no longer be the richest (by income per capita), making strategic choices for firms more complex.
20
Economic Growth
− India has the potential to show the fastest growth over the next 30 and 50 years. Growth could be higher than 5% over the next 30 years and close to 5% as late as 2050 if development proceeds successfully.
− Overall, growth for the BRICs is likely to slow significantly over this time frame. By 2050, only India on our projections would be recording growth rates significantly above 3%.
25
Will China rule the world? Will India be the next superpower?
Biggest Population, biggest consumer of resources, biggest economic surplus and reserves . GDP one-sixth of US, 90th in world p.c.
DemographyPopulation ageing problem, solution not in sight. No ‘rescue’ from migration.‘Lewis point’ exaggerated.Population homogeneous, minorities small.
EnvironmentWorst global environment. Biggest greenhouse contributor. Unsafe water, air, food, medicine. Water shortage in North. Climate change threats: 150 million people in LECZ.
PoliticsRigid party control ; Corruption and local oppression, inequality, environment, eventual political instability?Isolated internationally, influence through money,
Huge economic, social growth 2002 –11:Projected urban growth 380 million – 600 million 2030, energy demand 3x by 2030.. 80% of India unbuilt.
DemographyPopulation growth problem. No ageing problem yet. Uneven regional transition.
Environment Nearly worst global environment 125th / 132 in 2012 GEP IndexWater insecurity, 4% of world’s fresh water with 17% of populationResource consumption unsustainable.Climate change threat: (hotter, wetter).
PoliticsPlus: judiciary, press, democracy, civil society, unity despite diversityMinus – corruption at all levels, clientism, subsidised prices, heavy bureaucracy.‘Permit Raj’ lives; high and growing inequality
28
Incomes and Demographics
− Despite much faster growth, individuals in the BRICs are still likely to be poorer on average than individuals in the G6 economies by 2050. Russia is the exception, essentially catching up with the poorer of the G6 in terms of income per capita by 2050. China’s per capita income could be similar to where the developed economies are now. By 2030, China’s income per capita could be roughly what Korea’s is today. In the US, income per capita by 2050 could reach roughly $80,000.
− Demographics play an important role in the way the world will change. Even with the BRICs, demographic impacts vary greatly. The decline in working-age population is generally projected to take place later than in the developed economies, but will be steeper in Russia and China than India and Brazil.
29
Global Demand Patterns
− As early as 2009, the annual increase in US dollar spending from the BRICs could be greater than that from the G6 and more than twice as much in dollar terms as it is now. By 2025 the annual increase in US dollar spending from the BRICs could be twice that of the G6, and four times higher by 2050.
Currency Movements
− Rising exchange rates could contribute a significant amount to the rise in US dollar GDP in the BRICs. About 1/3 of the increase in US dollar GDP from the BRICs over the period may come from rising currencies, with the other 2/3 from faster growth.
− The BRICs’ real exchange rates could appreciate by up to 300% over the next 50 years (an average of 2.5% a year). China’s currency could double in value in ten year’s time if growth
30
Global Poverty in 2050
- Population growth creates need; income growth creates effective demand. Taken together, world food demand could double by 2050.
- How many hundreds of millions of presently low income people are lifted out of their poverty will be the most important determinant of the future size of global food and agricultural product consumption.
- This will depend heavily on – how “pro-poor” a development strategy each LDC follows, including the
majority of the poor who live in rural areas– how open high income countries are to import goods in which LDCs have
a comparative advantage– how positive an investment climate an LDC maintains – for both local and
international investors
32
Long-Run Development Goals
- Poverty reduction – 70% rural
- Agricultural development is necessary, but not sufficient.
- Allow each country’s agricultural sector to contribute as much as possible to national development as consistent with economic efficiency and environmental sustainability
– Food supply– National Economic Growth (GDP)– Foreign exchange earnings– Employment
34
E7 Economies Could Grow to Significant Size by 2050
- Brazil could be bigger than Japan and Russia and Mexico could be bigger
than Germany or the UK.
- India has strengths in: IT skills and technologies, low cost English speaking
staff for offshoring services.
- China has advantages in: low cost manufacturing, higher average education
level, higher savings and inestment.
- Average GDP per capita in E7 could by 2050 reach current G7 levels
(but still well below projected G7 levels in 2050)
36
Private Sector Could Help to Reduce Poverty
- Foreign direct investment and technology transfer to LDCs
- Raise internal food safety standards in LDCs
- Create marketing opportunities for LDC small-holders
- Be advocates in OECD countries for food and agricultural trade liberalization
- Be advocates for LDC development strategies that lift the maximum number
of people out of poverty
- Advocate public investment in enabling environment in LDCs, including from
ODA and World Bank
- Stop implicitly affirming the anti-trade, anti-business, anti-growth and anti-
science agendas of transnational NGOs which purport to speak for LDCs and the poor.
38
World Population Outlook 1950-2050
• Total population for 2050 will reach 9.078 billion
• Population for 2003 was expected to be 6.302 billion
• In spite of higher population for the future, the growth rate of the population is expected to fall due to the decline in fertility rate and the toll taken by the HIV/AIDS pandemic in some countries. Also due to the ethnic cleaning and treats as SARS.
• Fertility rate decline – family planning• Increase in population but decrease in average annual growth rate. e.g. 1.16% in 2003 but 0.43% in 2050
40
Population Growth at a Slower Pace
0.0
3.0
6.0
9.0
12.0
1750 1800 1850 1900 1950 2000 2050
Tota
l p
op
ula
tion
(b
illion
s)
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
An
nu
al in
cre
men
ts (
billion
s)
Source: UN, World Population Assessment 2006 41
Population by Region1950-2050
• World population growth will be concentrated in developing countries for the foreseeable future
• Population for Asia, Africa, Sub Saharan Africa, Middle East, North America and South America will increase substantially
• Population for European countries and Former Soviet Union tends to fall for the foreseeable future
• Not much different for the population for Oceania and Baltic region
45
Top 10 Most Populated Countries for 2003 and 2050
Countries Ranked by Population: 2003
RankCountry
Population
1 China 1,286,975,46
8
2 India 1,049,700,11
8
3 United States 290,342,554
4 Indonesia 234,893,453
5 Brazil 182,032,604
6 Pakistan 150,694,740
7 Russia 144,526,278
8 Bangladesh 138,448,210
9 Nigeria 133,881,703
10 Japan 127,214,499
Countries Ranked by Population: 2050
Rank Country Population
1 India 1,601,004,572
2 China 1,417,630,630
3 United States 420,080,587
4 Indonesia 336,247,428
5 Nigeria 307,420,055
6 Bangladesh 279,955,405
7 Pakistan 267,813,495
8 Brazil 228,426,737
9 Congo (Kinshasa) 181,260,098
10 Mexico 153,162,145
46
Fertility Patterns Some contrasting total fertility levels 2011 - 2012The West Developing world East AsiaTFR stable or increasing TFR mostly going down. TFR very low, little changeSome higher TFRs Some lower / declining TFRs
Ireland 2.05 Sri Lanka 2.17 Japan 1.39Iceland 2.04 Turkey 2.13 S. Korea 1.23New Zealand 2.03 Nicaragua 2.08 Taiwan 1.01France 2.00 Karnataka 2.00 Singapore 0.78UK 1.91 Vietnam 1.89Sweden 1.90 Chile 1.87Australia 1.89 Iran 1.87US 1.89 Uzbekistan 1.86Norway 1.88 Brazil 1.82Finland 1.83 Lebanon 1.76Belgium 1.81 Kerala 1.70Netherlands 1.76 Tamil Nadu 1.70Lithuania 1.76 Thailand 1.66Denmark 1.73 China 1.55
Source: Eurostat, national statistical yearbooks. 48
Estimated and projected period TFR in China through 2050: Expert-based projection (main estimate and 80% confidence interval) as compared with three rounds of UN projections and estimates (From Basten et al. forthcoming)
Expert Views of Low Fertility for China, 1990 - 2050
50
Developing World Ageing Overtake NW Europe Age Dependency Ratios ((pop 65+ / pop 15-64)*100), selected European and developing countries 2010 –
2060. Source: UN 2012, medium variant.
Age dependency ratios, 2010 - 2060, selected developed and developing countries. Source: UN 2012 medium variant.
0
10
20
30
40
50
60
70
80
2010 2015 2020 2025 2030 2035 2040 2045 2050 2055 2060
Spain
Germany
China
Iran
France
UK
Brazil
Sweden
Turkey
Mexico
India
51
(Number of Years for Percent of Population Age 65 or Older to Rise from 7% to 14%)
26
45
45
47
53
65
69
73
85
115
Japan 1970-1996
Spain 1947-1995
United Kingdom 1930-1975
Poland 1966-2013
Hungary 1941-1994
Canada 1944-2009
United States 1944-2013
Australia 1938-2011
Sweden 1890-1975
France 1865-1980
More developed countries Less developed countries
41
27
26
25
24
23
22
21
20
19
Azerbaijan 2000-2041
Chile 1998-2025
China 2000-2026
Jamaica 2008-2033
Tunisia 2008-2032
Sri Lanka 2004-2027
Thailand 2003-2025
Brazil 2011-2032
Colombia 2017-2037
Singapore 2000-2019
Speed of Population Aging in Selected Countries
Energy Intensity
Economic growth is closely related to growth in energy consumption because the more energy is used, the higher the economic growth. However, it is possible to decouple energy consumption and economic growth to some extent. More efficient use of energy may entail economic growth and a reduction in energy use.
Economist Intelligence Unit, KPMG calculations
Cumulative Investment in Energy Infrastructure Require 2011 – 2035
Natural Gas - $9.5 trillion
Bio-Fuels - $0.3 trillionCoal - $1.1 trillion
Power- $16.9 trillion
World Energy Outlook 2011, (2010 real terms)
0
50
100
150
200
250
300
Res/Comm Transportation Industrial Electricity Generation
2010
2025
2040
Quadrillion BTUs
Electricity Generation Leads Growth
58
0
50
100
150
200
250
Oil Gas Coal Nuclear Biomass/Other Wind / Solar /Biofuels
Hydro / Geo
0.7%
Quadrillion BTUs
Energy Mix Continues to Evolve
2010
2040
-0.2%
1.6%
2.2% 0.3%
6.0% 1.6%
Average Growth / Yr. 2010 - 2040
0.9%
59
0
150
300
450
600
750
EuropeOECD
N. America OtherOECD
China Africa India LatinAmerica
Russia/Caspian
MiddleEast
Other NonOECD
Million Households
Household Growth Drives Residential Demand
2010
2040
2040
60
0
30
60
90
120
150
1990 2015 2040
Quadrillion BTUs
Commercial
Residential
By Sector
Residential/Commercial Demand Grows
-10
-5
0
5
10
15
20
25
30
35
'10 - '40 '10 - '40
Electricity
Other
OECDNon OECD
Fuel GrowthQuadrillion BTUs
Biomass
0
30
60
90
120
150
1990 2015 2040
Quadrillion BTUsBy Region
China
OECD
Rest of Non OECD
India & Africa
61
0
10
20
30
40
50
1990 2015 20400
10
20
30
40
50
1990 2015 2040
Commercial Transportation Drives Demand Growth
PersonalMBDOE
CommercialMBDOE
Light Duty Vehicles
Aviation
Marine
Rail
Heavy Duty Vehicles
62
Avg New Car Fuel Efficiency in 2040
0
10
20
30
40
50
60
70
80
US Europe China Japan India
On-Road MPG
2010
0
10
20
30
40
50
60
70
80
US Europe China Japan India
2010
2020-2025 Target2015 Target
0
250
500
750
1000
1250
1500
1750
2000 2020 2040
Million Vehicles
Rest of OECD
Rest of Non OECD
China
United States
Light Duty Vehicle Fleet by Region
Impact of Global Fleet Shift on Efficiency
0
250
500
750
1000
1250
1500
1750
2000 2020 2040
Million Vehicles
Conv. Gasoline
Conv. Diesel
Hybrid
PHV/EV
Natural gas/LPG
63
0
50
100
150
200
250
1990 2015 2040
Quadrillion BTUsBy Region
China
OECD
Rest of Non OECD
Industrial Fuel Demand Diversifies
-10
0
10
20
30
40
50
60
70
'10 - '40 '10 - '40
Electricity
Oil
OECDNon OECD
Fuel GrowthQuadrillion BTUs
Coal
Gas
Other
India & Africa
64
0
5
10
15
20
25
30
35
1990 2015 2040
Electricity Demand Continues to Surge
k TWhBy Sector
Transportation
Industrial
Residential/Commercial
0
50
100
150
200
250
300
1990 2015 2040
Quadrillion BTUsFuel Into Electricity Generation
Oil
Gas
Nuclear
Coal
Wind
Renewables
65
0
2
4
6
8
1990 2015 2040
0
2
4
6
8
1990 2015 20400
2
4
6
8
1990 2015 2040
k TWh
Gas
NuclearCoal
Wind
Other Renewables
Gas w/ CCS
Coal w/ CCS
Electricity Supply Varies Globally
United Statesk TWhChina
Oil
k TWhEurope
* Generation by Type66
0
10
20
30
40
1990 2015 2040
CO2 Emissions Plateau
Billion TonsBy Region
OECD
Rest of Non OECD
India & Africa
China
0
5
10
15
20
U.S. Europe China India
Tons per PersonEmissions per Capita
2010
2025
2040
67
0
20
40
60
80
100
120
2000 2010 2020 2030 2040
MBDOELiquids Supply
Liquids Supply Continues to Diversify
Conventional Crude and Condensate
Oil Sands
NGLs
Deepwater
Tight Oil
Biofuels
0
1
2
3
4
5
2040
Remaining Resource
Cumulative Production
TBOResource *
* Source: Total resource from IHS Inc. The use of this content was authorized in advance by IHS.
68
0
100
200
300
400
500
600
2000 2010 2020 2030 2040
Unconventional Gas Contribution Increases
BCFDProduction by Type
Unconventional
Conventional
0
100
200
300
400
500
600
2000 2010 2020 2030 2040
BCFDDemand by Region
North America
Middle East
AP Non OECD
Rest of OECD
Russia/Caspian
Rest of Non
OECD
69
0
20
40
60
80
100
Energy Use Evolves Over Time
PercentGlobal Percent Mix of Fuels
1800 1900 20001850 1950
Biomass
Coal
Oil
Gas
HydroNuclear
Other Renewables
Source: Smil, Energy Transitions (1800-1960)
2040
70
0
3
6
9
12
15
2000 2020 20400
3
6
9
12
15
2000 2020 2040
Technology Driven Supplies Expand Globally
MBDOEDeepwater by Region NGL by Region
MBDOE
North America
Russia-Caspian/Far East
Africa
Latin AmericaEurope
North America
Far East
Africa
Latin America
Russia/Caspian
EuropeMiddle East
71
1930s
1940s 1950s
1960s
1970s
1980s
1990s
2000s
0
20
40
60
80
100
1965 1970 1975 1980 1985 1990 1995 2000 2005 2010
Global Oil Production by Discovery Date
Discovered before 1930
MBDOE
Source: ExxonMobil estimates based on Wood Mackenzie Limited & Nehring Associates data72
North America*
Europe OECD
Asia Pacific
Latin America
Africa
Middle East
0
5
10
15
20
25
301000 TCF
Conventional
Unconventional
1.3
4.1
2.62.6
2.32.3
8.1
4.9
4.84.8
Global Gas Resource
Source: IEA; * Includes Europe Non OECD
•World: ~250 years coverage at current demand
•Large unconventional gains anticipated
World
Russia/Russia/Caspian*Caspian*
73
0
50
100
150
'10 '20 '30 '40
0
50
100
150
'10 '20 '30 '40
0
50
100
150
'10 '20 '30 '40
0
50
100
150
'10 '20 '30 '40
0
50
100
150
'10 '20 '30 '400
50
100
150
'10 '20 '30 '40
0
50
100
150
'10 '20 '30 '40
World Gas Supply
Europe
Asia Pacific
South America
North America
Africa
Russia/Caspian
Middle East
BCFD
Conventional
Unconventional
Pipeline
LNG
74
0
10
20
30
40
50
1990 2015 2040
0
10
20
30
40
50
1990 2015 2040
Transportation Fuel Demand Shifts to Diesel
MBDOEOECD
Gasoline
Ethanol
Diesel
Biodiesel
Jet Fuel
Fuel OilOther
MBDOENon OECD
75
Remaining Oil Resource - 2011 Conventional Crude and Condensate + Oil Sands and Tight Oil (BBO)
North America
Europe
~100
Asia Pacific
~75
Latin America
~100
Africa
~35
Russia/Caspian
~325
Middle East
~10
~250~125
~825~400
OPECNon-OPEC
~1,050~1,200
Oil Sands
Includes Undiscovered and Future Growth ResourceSources: USGS, Oil & Gas Journal, PIRA, IEA
76
77
Developed Countries
0%
20%
40%
60%
80%
100%
1990 2000 2010 2020 2030 2040 2050
Baseline Global action
EU
0%
20%
40%
60%
80%
100%
1990 2000 2010 2020 2030 2040 2050
Baseline Global action
Global Climate Reduction Plan
EU objective: 80 to 95% reductions largely through domestic measures:
around -80% internal reductions in 2050 compared to 1990
Developed Countries: similar efforts
Developing Countries: -5% compared to 1990 Equivalent to -
80% compared to business as usual
no cheap offsets by 2050
Developing Countries
0%
100%
200%
300%
400%
500%
1990 2000 2010 2020 2030 2040 2050
Baseline Global action
79
The 2050 Targets
0
2
4
6
8
10
12
14
16
18
20
Wo
rld
OE
CD
no
n-O
EC
D
US
A
Jap
an
EU
-27
Afr
ica
Mid
dle
Ea
st
Ru
ssia
La
tin A
me
rica
Asi
a
Ch
ina
Ind
ia
20
50
"ta
rge
t"
Em
iss
ion
s, t
on
ne
s C
O2
pe
r p
ers
on
80
Pathways to 2050
0
50
100
150
200
250
300
350
400
450
$0 $20,000 $40,000 $60,000
GDP per capita, US$ 2000 (ppp)
En
erg
y p
er
ca
pit
a,
GJ
Improving energy efficiency
2025
2050
Falling CO2 emissions per unit of energy
2008
Wealthy developedDevelopedLeading developingDeveloping
81
Prospect of Emission Targets
0
50
100
150
200
250
300
350
$0 $10,000 $20,000 $30,000 $40,000
GDP per Capita, US$ ppp (2000)
En
erg
y p
er C
ap
ita
, GJ
Finland
Romania
“Developed” countries with Kyoto Targets“Developed” countries with Kyoto Targets
KoreaTaiwan
Singapore
China Thailand
Malaysia
Rapidly emerging economies in AsiaRapidly emerging economies in Asia
82
References
Hawksworth, J. et als. 2008. The World in 2050: Does the global financial crisis change the long-term outlook?.
Hawksworth, J. and Cookson, G.. 2008. The World in 2050: Beyond the BRICs: a broader look at emerging market growth prospects.
Hillebrand, E. 2007. The global Distribution of Income in 2050.
Nauman , Scott A. .2012. “The Outlook for Energy: A View to 2040.
Wilson, D. 2003. Dreaming with BRICs: The Path to 2050.
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• 2001:“Building Better Global Economic BRICs”. Paper by Jim O’Neil, from Goldman Sachs.
• 2003:“Dreaming with BRICs: the path to 2050”: written by Dominic Wilson and Roopa Purushothaman from Goldman Sachs. Paper about the evolution of global economy until 2050, proposes new category composed of the four major emerging economies.
The “BRICs” idea was immediately adopted by analysts and the media.
The growth of these countries would be the new building blocs – “bricks” – of the world economy by 2050.
Brazil, Russia, India and China were singled out due to their economic indicators and their potential, in relation to other developing countries.
Origin of the Title BRICs
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