Towards a green economy BAU Scenario

Resource exploitation

Fossil fuels Green Scenarios

Resource efficiency

Renewable energy

Job creationJob creation

Scenario G1: assumes that 1 per cent of global GDP is channelled annually through green investment. In this green scenario, 1 per cent of GDP is generally divided equally among the sectors, each receiving 10 per cent of the green investment, with some exceptions, as highlighted

in Table national 2, leaders depending facing on

specific

sectoral targets. This distribution of funds serves to illustrate the broader benefits of greener investments, providing

socio-economic

Figure 3: Representation of the main underlying assumptions of green and BAU investments

cent case (G1) is an experimental exercise to clarify and illustrate the concept of green economy – as it assumes an about equal allocation of funds across the sectors analysed – and to compare the projected impacts of the implementation of a green economy strategy with, among others, climate scenarios such as IEA’s 450 case. On the other hand, the 2 per cent case

(G2) can be considered more relevant and

coherent. In this case, current key issues, such as climate change, water scarcity and food security, determine the allocation of the investment across sectors. Being central to addressing climate change, energy investments are prioritised in this scenario to reach the emissions targets of IEA’s 450 and BLUE Map scenarios. It is important to note that, for the most part and unless otherwise stated, the sectoral chapters in the GER refer to G2 as the green investment scenario.

More specifically, these scenarios include investments in agriculture, fisheries, forestry, water, waste and energy, also allocated across sectors, such as industries, transportation, buildings and tourism. Cities are also analysed. More details on the scenarios follow:

Sector and objective

Agriculture Yield increase

Energy Expansion of power generating capacity

Fisheries Increase production

Forestry Increase production

Water Manage supply and demand BAU Scenariosa Higher utilisation of chemical fertilisers Thermal generation (fossil fuels) Expansion of the vessel fleet, pushing catch in the short-term Increase deforestation Increase water supply through higher withdrawal a Refers to BAU1 and BAU2 with additional investments allocated to match existing patterns. Table 1: Comparison of scenarios for selected sectors and objectives 512

and environmental challenges with insights on likely impacts of increasing green investments. For cities, in addition to analysing the impacts of global investment on urban settings, we simulate the allocation of 1 per cent of urban GDP to expand public transport, being key to cities’ socio-economic as well as spatial development.

Scenario G2: assumes that 2 per cent of global GDP is channelled annually through green investments.

In

this scenario, priorities are driven by sectoral policy targets, emphasising energy and climate change (which according to the IEA would require approximately 1 per cent of global GDP through 2030 to reduce emissions to 450 ppm concentration, and limit global warming to 2o C). As a consequence, a higher share of GDP is allocated to energy (both demand and supply measures) and the remainder is shared across the remaining sectors (e.g. agriculture, forestry, fishery, waste and transport infrastructure).

The investments under G1 and G2 take place on an annual basis over the period 2010-2050, implying a concerted but gradual shift in shifting the economy’s capital stock and reducing potential: costs of premature obsolescence. Scenarios BAU1 and BAU2 also assume additional investments of 1 per cent and 2 per cent of GDP, as is the case with G1 and G2, but these are allocated across the economy in a BAU context, without targeting specific sectors. Generally, the effects of G1 and G2 are evaluated in comparison to projections under BAU1 and BAU2 (the additional BAU scenarios), respectively.

Green Scenarios

Expansion of conservation agriculture, using organic fertilisers, among others

Renewable energy power generation

Reduction of the vessel fleet, investing in stock management to increase catch in the medium- and longer-term

Curb deforestation and invest in reforestation (expanding planted forests)

Invest in water efficiency measures, water management (including ecosystem services) and desalination