Medium-term Integrated Impact Assessment
Economic assessments up till 2050
What do the results tell us?
The GINFORS projections displayed within the interactive tool are showing the transformation towards a low carbon-society for all 27 EU Member States for a set of socioeconomic and environmental variables for the period 2010 to 2050. The results distinguish between a world where sustainable development is a strong globally accepted organizing principle (SSP1 x RCP2.6) and a divided world with striking differences in societal equality and in implementation of climate change mitigation policies (SSP4 x RCP4.5).
For the two variables gross domestic product (GDP) and population the IIASA SSP Database with its projections for these two variables has been taken as a reference (OECD results from March 2013 [V9]) to establish the more detailed GINFORS projections. The CO2 emission pathway has been calibrated gradually by a "holistic" set of climate policy instruments in the direction of the targets formulated within the IIASA RCP database.
In SSP1 the EU countries meet the EU roadmap targets for CO2 emissions. They install a flexible supply side management for the ETS which allows a long run rise of the carbon price. For the other sectors of the EU economies a carbon tax will be introduced with a recycling of the specific tax revenue to the paying sector. In electricity production a rising quota for the total of renewables will be introduced (2050: 90%), the shares of the different technologies depending from cost differentials. Further several regulations and economic instruments in traffic achieve a share of 80% for electricity in energy consumption of land transport. Subsidies for the investment in energy efficiency of buildings reach a renovation rate of 3% per year. In the non-EU countries carbon tax will be introduced for all sectors. Further they also introduce the quota for renewables in electricity production and the instruments favouring e-mobility. For a sufficient reduction of the carbon intensity of the basic industries, it is for all countries necessary that an information program raises material efficiency on all stages of production.The SSP4 simulation contains for the EU countries the same assumptions as the SSP1 simulation. The non EU countries only introduce a rising quota for the totals of renewables in electricity production up to 70%, the instruments to achieve e-mobility, and the information program to raise the material efficiency.
What can we do with the results?
The assessment results can help decision makers, who are responsible for climate mitigation and adaptation policies, and researchers to get a better evidence based and empirically founded understanding concerning possible future socioeconomic and environmental pathways.
How are the results obtained?
Results were obtained using the multi-regional input-output simulation model GINFORS (global inter-industry forecasting system). The model permits wide-ranging ex ante as well as ex post simulation studies, particularly on globally-relevant topics in areas such as global energy-environment-economy developments and resource use.
The GINFORS3 version of the model is based on a time series of completely harmonised national supply and use tables. The model can be divided into four interlinked logical modules. The centrepiece is a bilateral trade module which models exports and imports of 59 goods and services between 38 countries (the EU-27 countries, Russia, Turkey, Brazil, Canada, Mexico, the United States, China, India, Japan, Korea and Australia) and a 'rest of the world' region. A very detailed model of the socioeconomic system is chosen for all 38 countries. Production, trade and use interdependencies are modelled in an input-output system broken down into 59 goods categories and consistently supplemented by effects on employment. Projections are also made for developments in the sequence of accounts and balancing items for the private households and private non-profit organisations, business, state and overseas sectors. As well as many details, this also allows changes in disposable income and financial balance to be examined for each sector. Additionally, global environmental interdependencies are comprehensively modelled via an energy-emissions and a resources module.The comprehensive modelling approach maps global interrelationships between consumers, producers and investors. It accounts for imperfect markets and limited rationality of agents and indicates the complex international feedbacks from structural changes in individual countries or changes in international trade patterns.
What are the broader applications?
In general the GINFORS model permits wide-ranging scenario-based ex ante 3E simulation studies. The additional environmental, energy and resource modules permit a holistic analysis of economic and social transformation towards sustainable development and social welfare as a result of bundling alternative green/sustainable growth policy instruments.
The assessment of medium to long-term effects of climate mitigation and adaptation policy outcomes requires consistent global scenario projections and policy simulations. In the environmental policy field these scenarios frequently ask for answers to questions like:
- What will be the main drivers of the global economy through to 2050?
- How will these affect the prosperity of individual nations?
- How will these affect global natural resource use and pollutant emissions?
- Might resource use be restricted by planetary boundaries? What consequences would this have?
- What are the likely effects on the economy, the social system and the environment under alternative scenario assumptions?
- What are the options for ensuring we are suitably prepared for these developments?