The World in 2050
One thing was made abundantly evident in the Sixth Assessment Report on climate change published by the Intergovernmental Panel on Climate Change (IPCC), and that was the fact that development will be essential for coping with climate change.
Poorer countries experience a greater number of fatalities in the aftermath of natural disasters, are ranked as the most vulnerable to climate change by a variety of climate vulnerability indices, and are more dependent on industries and income sources that are the most likely to be impacted by climate change, such as agriculture. The importance of development has not changed throughout history, but the stakes are currently significantly higher.
This blog takes a closer look at what is arguably the most authoritative assessment of what the longer-term future might hold for development, the Shared Socioeconomic Pathways (SSPs), which were produced for the Intergovernmental Panel on Climate Change (IPCC). The various projections for economic development up to 2050 are discussed briefly in this blog. This is a component of our ongoing work on the future of development, which seeks to answer important concerns such as the following: What can we anticipate from economic growth over the next several decades, and what repercussions will this have for development and international organisations? How much money will be needed, who will supply it, and which problems—those that affect a single nation or those that affect the entire world, including the climate—are more urgent?
Why growth is important
There is more to life than economic growth; nonetheless, despite the fact that it is not a technocratic or abstract statistic, it is still an essential factor in the determination of many of the things that are important to us. There are real-world implications hidden beneath the statistics. For instance, Hans Rosling referred to $40 per day as the “wash line,” the threshold over which people can purchase washing machines. The rate of economic growth is one of the most important factors in determining whether or not poverty may be reduced; it can help alleviate numerous aspects of deprivation and enhance actual human capabilities. It has the potential to further the spread of democracy, open societies, and peace; but, it is also closely linked to increases in emissions of greenhouse gases.
The vast majority of global inequality is still made up of inequalities in average incomes across nations, as opposed to inequality within countries; this is why catch-up growth is so important at this point in time. Even seemingly insignificant variations in development rates can have enormous effects on the lengths of time it will take for less developed nations to attain high-income levels comparable to those of more developed nations, and on their capacity to adapt to the effects of climate change.
Therefore, the future of economic growth is one of the most significant factors that will determine the level of well-being of humans, and the emissions intensity of growth will also be an essential element in determining the consequences of climate change.
A summary of the already available growth estimates
So, what kind of estimates for the economy’s long-term growth are there right now? It is possible to obtain projections of GDP from a variety of important sources, which are shown in Table 1 below.
The International Monetary Fund, the World Bank, and the United Nations are just few of the global organisations that produce GDP growth predictions on a regular basis; however, they are shorter-term forecasts that only span the next two to five years. In addition, projections made with longer time horizons (such as those made by the OECD and researchers at PwC and Goldman Sachs) sometimes have a tendency to concentrate on a select group of major economies, such as those included in the G20 and the OECD.
Notes: (a) Some projections are solely for the total GDP (WB GEP, UN WESP, OECD Economic Outlook). It is necessary to integrate these GDP estimates with estimations of the population made by other organisations if one is to arrive at accurate per capita statistics. b. Some forecasts are not computed using PPP (GEP, WESP, USDA, Goldman Sachs).
The United States Department of Agriculture (USDA), with its decade-long time horizon and coverage of 181 nations, provides a prognosis that is more in line with reality than the other two groupings of predictions. In addition, Homi Kharas has provided GDP per capita predictions through the year 2050 for 145 nations; however, the data that was used to make these projections has not been made public. The Shared Socioeconomic Pathways (SSP) Database has produced what is arguably the most helpful collection of long-term growth estimates that have been made to this day.
The Special Scenario Projections (SSPs) are a variety of conceivable future scenarios that were produced for the Intergovernmental Panel on Climate Change (IPCC). These scenarios presume that no climate policy would ever be implemented. They are comprised of five storylines that are stylized (SSP1-5), each of which generates a set of conditional predictions based on the assumption that certain conditions would be met (for instance, on the rate of frontier growth and convergence speed). SSP2 is the “business as usual” scenario, which assumes that recent tendencies will continue. On the other hand, SSP5 is the most optimistic scenario for global growth, while SSP3 is the most pessimistic. On the basis of these scenarios, three separate modelling teams created century-long GDP estimates to the year 2100 for each of the SSPs. Out of these three sets of projections, one set of projections was chosen to serve as a sample example. The selected predictions account for 184 countries and are derived from the ENV-Growth model developed by the OECD (i.e. an augmented version of the Solow model, a workhorse model of economic growth that assumes that in the long run, growth is driven by exogenous technological change).
Five possible scenarios for the future based on shared socioeconomic paths
The SSPs stand out from other projections due to the level of detail and depth that they possess. So, what do they have to say about where they see development headed in the future?
Although all but one of the SSPs point to higher growth in the median country’s income than it has seen in the previous thirty years, it is by design that the global economic fortunes vary greatly from one SSP to the next. This is because the SSPs are intended to cover a wide range of plausible growth scenarios. In the most optimistic scenario, which is SSP5, the increase in the median nation’s GDP per capita would average approximately 4.6 percent, but in the least optimistic scenario, which is SSP3, the growth in the median country will average around 1.7 percent. The difference between expanding by 70 percent and increasing by 290 percent is equivalent to the difference between a little change in any one year and a significant difference when compounded over three decades. In the first scenario, the country that falls in the middle (now somewhere between the Maldives and Albania) will, by the year 2050, have nearly the same level of wealth that Argentina does right now (with a GDP per capita of around $19,000, based on prices in 2017 PPP). In the second scenario, the standard of living would be equivalent to that in Canada ($46,000).
What do you think the future holds for growth in countries with lower incomes?
We are particularly interested in the advancements made in nations with lesser incomes. The scenarios are more optimistic—especially when compared to historical experience (the light grey bar)—for the 140 nations that are now eligible for aid (official development assistance), but the volatility is bigger between scenarios. Under SSP5, it is estimated that the median growth among these nations will be 5.7 percent (which would equal to a five-fold increase by2050), whereas under SSP3, it is projected that it will be 2.2 percent (GDP per capita would roughly double). According to SSP3 and SSP5, the following chart presents the distribution of GDP per capita in 2050 among the countries that are now eligible for ODA:
Each of these projections is more upbeat about economic expansion in ODA-eligible nations than the actual experience of the preceding three decades would indicate (potential measurement issues aside). It’s possible that we ought to be sure that growth would increase for this group, but the fact that none of the scenarios anticipate growth that is lower than what recent historical experience has shown places a question mark on the breadth of their predictions. This suggests that even the most pessimistic scenario may be too high, given that the IPCC’s scenarios are already relevant to estimates of countries’ future greenhouse gas emissions and to developing measures to curb them. It is possible that more research on longer-term estimates for this particular group is necessary. This group includes numerous nations that are frequently overlooked by forecasters, as table 1 demonstrates.
The SSPs’ most often encountered implications
The SSPs indicate vastly different outcomes for the future. This could mean the difference between the majority of the world’s population enjoying living standards comparable to those in wealthy countries of today and continuing to live in poverty while having a lower level of resilience to the shocks that will become increasingly common as the climate changes. Nevertheless, there are some repercussions that are universal across the board. Given that the SSPs were selected to illustrate a diverse variety of circumstances, this does not imply that they are unavoidable; nevertheless, it does indicate that they should be regarded seriously
Is this the end of nations with low incomes (LICs)?
According to the World Bank, there are now 30 nations that fall into the category of Least Developed Countries (those with an income per capita of less than$1,035, which we estimate to be comparable to $2,919 in terms of purchasing power parity in 2017). Even under the most pessimistic scenario, it is expected that the number of LICs will continue to decrease over time, and by 2050, that number is forecast to be cut in half. This trend has remained consistent over time. Even two SSPs are forecasting that there would be just one LIC (Somalia) by the end of this year (though this seems implausible based on history). Even though a decrease in the number of LICs would be a good news story, it also raises questions about whether or not particular funding strategies are acceptable. Because of the limited number of countries that qualify, certain organisations, such as the Global Fund and the International Development Association (IDA) fund of the World Bank, base their funding decisions on whether or not a country is considered a LIC. These organisations would need to adjust their goals and/or funding models because there are so few countries that qualify
Will there be a greater number of people who benefit from development finance?
Additionally, there will be a rise in the number of nations that have the potential to contribute to the financing of development. When assistance providers first got together to create the Development Assistance Committee (back when it was still called the Development Assistance Group (DAG), the average GDP per capita of the 10 members was somewhere about $12,500 at the time (in 2017 prices). According to SSP3, which is once again the scenario with the lowest degree of optimism, the number of nations that are over that threshold will climb from 88 in 2020 to 118 in 2050, which is more than half of the countries in the globe. A significant number of these nations currently participate in south-to-south cooperation, through which they offer aid with development. It is obvious that the relative wealth of countries is an important factor as well, particularly if potential new providers believe that wealthier countries have broken promises made in the past, such as providing 0.7 percent of their GNI in the form of official development assistance (ODA) or meeting the $100 billion climate finance target. Nevertheless, even in the most pessimistic scenario, there will be a shift in the balance between nations that are likely to be net suppliers and those that are likely to be net receivers.
Will there still be disparities across regions in the foreseeable future?
Although each of the forecasts predicts that regional disparities will have been reduced to some degree by the year 2050, none of them predict that this reduction would be considerable. The percentage of global GDP held by Sub-Saharan Africa would be at its greatest under SSP5, at 7 percent (up from roughly 3 percent at the present time), yet this would still be for a region that contains over one fifth of the world’s population. The number would be reduced to 4% if SSP4 were implemented.
To put it another way, none of the SSPs forecast a sufficiently rapid convergence to cause a significant shift in the global distribution of economic power over the course of the next few decades. This means that Africa’s overall contribution to the world’s emissions will probably remain on the low end of the scale.
Is it feasible to create a better roadmap for the path that development will take in the future?
There is not a single correct prognosis, and not one of the SSPs will come to fruition. However, based on our research, it appears that these forecasts are the only credible attempt to look at the long-term projected economic growth of lower income nations.
However, by the norms of the past, their outlook appears to be much too optimistic. In addition, the potential effects of climate change on economic growth—which might be significant, particularly for less developed nations—are purposefully left out of these projections. Even if they are meant to cover a variety of possible outcomes, some forecasts appear to be too optimistic. For example, according to SSP5, the gross domestic product of the Democratic Republic of the Congo is expected to be thirty times larger in the year 2050. However, the SSPs offer a starting point for discussing the implications of how development efforts and financial resources may be resourced and focused throughout the course of the following decades.
In next articles, we will take a more in-depth look at long-term economic growth scenarios, the SSPs, and their plausibility, and we will investigate how (or whether) these scenarios should affect the way we think about the future of development. Please get in contact if you are aware of any work being done in this field.
By the year2050, flying cars will be the norm.–2050 Technologies for Flying Cars
In addition, it is possible that flying automobiles may be commercially available by the year 2050. In order to land the autos, they would not require an air surface. In the case of an accident, every flying vehicle will be computer-controlled, and the computer system will take control of the vehicle in time to prevent it from colliding with another object. Dubai is now conducting research on these kind of automobiles.
There is also the potential that self-driving automobiles may be available by the year2050; now, several businesses are working on the production of such vehicles. Road sensors will be the primary reliance of these vehicles. Because of this, the possibility of experiencing an accident will be cut down significantly. At the present time, driverless metro trains are operating in a great number of wealthy nations. In the future, self-driving cars will be able to find a place in some established areas and on some built highways thanks to this innovation.
In the year 2050, a technology will come into existence that, when used in conjunction with it, would eliminate the requirement for the use of gasoline for travelling distances of thousands of kilometres. When that day comes, all motor vehicles will be propelled by magnetic waves. Because of this, travelling will not only be less expensive but also more convenient for you. The best thing is that it won’t contribute in any way to the pollution problem. Disclaimer
The opinions expressed in CGD blog postings are those of the authors, who draw from their own past research and practical experience in their respective fields. CGD is an organisation that does not adopt any institutional stances and is independent from any political party.