Towards a green economy

World oil production rate, million barrels/year BAU (with confidence regions by colour)

50 45 000 50% 75 75% 9 95%

10

100%

30 000

15 000

0

1970

1990

2010

Figure 21: Global conventional oil production scenarios considered in the GER “World oil production rate”: Annual conventional world oil production, in million barrels/year.

exceeding the baseline volume in early 2020s and in 2035 under the two scenarios.

Energy The green investment in energy will contribute to both the supply side (expansion of low-carbon power generation and biofuel production), and the demand side (energy efficiency improvements for end-use energy demand, involving industry, transport and buildings sectors). It is worth noting that synergies are found under an early peak-oil scenario (see also Bassi et al. 2010), where the increased efficiency and a faster transition beyond fossil fuels, driven by green investments, will reduce energy prices

below BAU throughout the

simulation period, making the economy more resilient and sustaining economic growth. A variety of scenarios were simulated to study and evaluate the impacts of the timing of several conventional oil production trends. The total amount of resources and reserves was changed to endogenously obtain world oil production. While a more detailed analysis is available in Bassi et al. (2010), the range of scenarios analysed is presented in Figure 21.

Energy supply In the green economy scenarios, the energy supply sector will receive green investment of US$ 174 - US$ 656 billion per year between 2010 and 2050 to expand biofuel production and power generation using renewables and advanced technologies (such as CCS).

The substitution of green investment in clean energy for additional BAU investments in carbon intensive energy sources will increase the penetration rate of renewables

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to 19 to 27 per cent of total primary energy demand by 2050, compared with 13 per cent under BAU and 12 per cent in the BAU2 scenario.

In the power sector, the capacity of power generation by energy sources in green cases will reach: 1.7 TW (hydro), 204 GW (waste), 955-1515 GW (wind), 38-54 GW (geothermal), 655-1304 GW (solar), 8-21 GW (tidal), and 3-16 GW (wave) in 2050 respectively. As a result, these renewable sources of energy will account for 29 to 45 per cent of total electricity generation by 2050, significantly higher than the 24 per cent in BAU and 23 per cent under BAU2. The share of fossil fuels, coal in particular, will decline accordingly to 34 per cent in 2050, compared with 64 per cent in the BAU scenario, mostly owing to the expansion of renewables (See Figure 22 and Table 5).

The green scenarios are expected to see the introduction and major expansion in second generation biofuels. In 2025 and 2050, the production of second generation biofuels is projected to reach 151-490 billion litres of gasoline equivalent (lge) and 254-844 billion lge, contributing to 4.2 to 16.6 per cent of world liquid fuel production by 2050 (8.4 to 21.6 per cent when first generation biofuels are considered). Between 12 per cent and 37 per cent of agricultural and forestry residues would be needed in the G1 and G2 scenarios respectively. In case residues above 25 per cent are not available or usable (as indicated by the IEA 2010), marginal land is assumed to be used. Between 330,000 and 1 million jobs would be created for biofuels and agriculture residues, and the figure would increase up to 3 million if a mix of agricultural residues and conventional feedstocks is

2030

2050