Framework assumptions

Economic activity (Table A.1) and population (Table A.2) are the two fundamental drivers of demand for energy services in ETP scenarios. These are kept constant across all scenarios as a means of providing a starting point for the analysis, and facilitating the interpretation of the results. Under the ETP assumptions, global GDP will more than triple between 2011 and 2050; uncertainty around GDP growth across the scenarios is significant, however. The climate change rate in the 6DS, and even in the 4 Degrees Scenario (4DS), is likely to have profound negative impacts on the potential for economic growth. These impacts are not captured by ETP analysis. Moreover, the structure of the economy is likely to have non-marginal differences across scenarios, suggesting that GDP growth is unlikely to be identical even without considering secondary climate impacts. The redistribution of financial, human and physical capital will affect the growth potential both globally and on a regional scale.

Table A.1 Real GDP growth projections in ETP 2016 (assumed identical across scenarios)  

CAAGR (%)  2013-2020 2020-2030  2030-2050   2013-2050
World  3.7 3.8 2.8 3.2
OECD  2.2 2.0 1.6 1.8
Non-OECD  4.9 4.9 3.3 4.1
ASEAN  5.3 4.8 3.4 4.1
Brazil   1.4 3.9 2.8 2.8
China 6.5 5.3 2.7 4.1
European Union   1.9 1.8 1.5 1.6
India 7.5 6.6 4.5  5.6
Mexico 3.3 3.5 2.1  2.1
Russia 0.2 3.5 2.1  2.1
South Africa  2.3 2.9 2.5  2.6
United States 2.5 2.0 1.8  2.0

Notes: CAAGR = compound average annual growth rate; ASEAN = Association of Southeast Asian Nations; growth rates based on GDP in USD in purchasing power parity (PPP) constant 2014 terms.

Source: IEA (2015), World Energy Outlook; IMF (2015), World Economic Outlook Database, www.imf.org/external/pubs/ft/weo/2015/01/weodata/index.aspx.

Table A.2 Population projections used in ETP 2016 (millions) 

Country/Region 2013 2020 2030 2040 2050
World  7 102 7 652 8 354 8 962 9 468
OECD 1 265 1 312 1 367 1 403 1 425
Non-OECD 5 837 6 340 6 987 7 559 8 043
ASEAN 617 664 721 762 785
Brazil 200 211 223 229 231
China 1 386 1 433 1 453 1 435 1 385
European Union  524 532 538 538 536
India 1 252 1 353 1 476 1 566 1 620
Mexico  122 132 144 152 156
Russia 143 140 134 127 121
South Africa 52 55 58 61 63
United States 320 338 363 383 401

Source: UNDESA (2014), World Urbanization Prospects: The 2014 Revision, http://esa.un.org/unpd/wup/.

Energy prices, including those of fossil fuels, are a central variable in the ETP analysis (Table A.3). The continuous increase in global energy demand is translated into higher prices of energy and fuels. Unless current demand trends are broken, rising prices are a likely consequence. However, the technologies and policies to reduce CO2 emissions in the ETP 2016 scenarios will have a considerable impact on energy demand, particularly for fossil fuels. Lower demand for oil in the 4DS and the 2DS means there is less need to produce oil from costly fields higher up the supply curve, particularly in non-members of the Organization of the Petroleum Exporting Countries (OPEC). As a result, oil prices in the 4DS and 2DS are lower than in the 6DS. In the 2DS, oil prices even fall after 2030. 

Prices for natural gas will also be affected, directly through downward pressure on demand, and indirectly through the link to oil prices that often exists in long-term gas supply contracts.1 Finally, coal prices are also substantially lower owing to the large shift away from coal in the 2DS.

Table A.3 Fossil fuel prices by scenario

   Scenario 2014 2020 2025 2030 2035 2040 2045 2050
IEA crude oil import price (2014 USD/bbl)      
  2DS 97 77 87 97 96 95 94 93
  4DS 97 80 97 113 121 128 133 137
  6DS 97 83 107 130 140 150 158 164
OECD steam coal import price (2014 USD/t)   
  2DS 78 80 80 79 78 77 76 75
  4DS 78 94 98 102 105 108 111 114
  6DS 78 99 107 115 119 123 127 131
Gas (2014 USD/MBtu)    
US price   2DS 4.4 4.5 5.1 5.7 5.8 5.9 5.8 5.8
4DS 4.4 4.7 5.5 6.2 6.9 7.5 7.8 8.0
6DS 4.4 4.7 5.5 6.3 7.1 7.8 8.2 8.5
Europe import price   2DS 9.3 7.5 8.5 9.4 9.2 8.9 8.8 8.7
4DS 9.3 7.8 9.5 11.2 11.8 12.4 12.9 13.3
6DS 9.3 8.1 10.3 12.5 13.2 13.8 14.5 15.1
Japan import price   2DS 16.2 10.7 11.3 11.8 11.5 11.1 11.0 10.9
4DS 16.2 11.0 12.0 13.0 13.6 14.1 14.7 15.7
6DS 16.2 11.4 13.2 14.9 15.5 16.0 16.9 17.5

Notes: bbl = barrel; t = tonne; MBtu = million British thermal units.

 

1 This link is assumed to become weaker over time in the ETP analysis, as the price indexation business model is gradually phased out in international markets.