This appendix, in combination with the section titled, “A review of current practices,” in chapter 3, reviews assumptions regarding GDP, population and per capita GDP in a broad range of integrated assessment models.
Forecasting GDP Growth
WEO 2010 projects that Organization for Economic Co-operation and Development (OECD) countries’ real economic output (that is, GDP after adjusting for inflation) in PPP terms will grow 1.8 percent per year from 2008 to 2020 and 1.9 percent per year from 2020 to 2035. In non-OECD countries, the projections are 5.6 percent from 2008 to 2020 and 3.8 percent from 2020 to 2035. The pace of projected growth in non-OECD countries, however, is dominated by two exceptional cases: China (8.8 percent and 3.9 percent in the two periods, respectively); and India (7.0 percent and 6.6 percent). Together, China and India make up 45 percent of the 2005 population in non-OECD countries, and 37 percent of world population. Economic growth in the remaining non-OECD countries is expected to take place at a slower pace, as shown in Table A.1.
Projecting the official IEA growth rates forward (as described in the main text), with the assumption that real GDP growth slows down as per capita incomes rise, results in global GDP (in 2005 PPP dollars) reaching $537 trillion in 2105, up from $56 trillion in 2005. For simplicity the extended WEO 2010 GDP growth projections are referred to as “standard” growth throughout this article (see Figure A.1).
The models with the fastest GDP growth in the EMF comparison show a slightly quicker pace of growth in India and China, and one IPCC scenario (A1T) shows much faster global GDP growth, but, with these exceptions, most of the other scenarios represented in Table A.1 assume slower growth than the standard projections. Models may assume even slower growth than IEA for a variety of reasons. Some scenarios, such the SRES B2 and A2, explicitly use slow economic growth assumptions as part of a suite of scenarios designed to represent a range of possible futures. Overall, most climate economics models assume that economic growth in developing countries (excluding China and India) will proceed at a pace similar to or slower than that used in the standard, extended WEO 2010 projections.