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)
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)
|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|
|China||1 386||1 433||1 453||1 435||1 385|
|India||1 252||1 353||1 476||1 566||1 620|
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
|IEA crude oil import price (2014 USD/bbl)|
|OECD steam coal import price (2014 USD/t)|
|Gas (2014 USD/MBtu)|
|Europe import price||2DS||9.3||7.5||8.5||9.4||9.2||8.9||8.8||8.7|
|Japan import price||2DS||16.2||10.7||11.3||11.8||11.5||11.1||11.0||10.9|
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.