### The OECD Scenarios

These scenarios were developed for the "OECD Environmental Outlook to 2030" study, which was conducted in 2008.

Baseline Baseline variant pp OECD pp OECD + BRIC pp global 450 ppm comparing table carbon taxes table

More information on the OECD scenarios can be found in the publication 'Background report to the OECD Environmental Outlook to 2030. Overviews, details, and methodology of model-based analysis'.

#### The OECD baseline scenario

The OECD baseline scenario describes a world under medium assumptions for factors such as economic growth, population and technology development. The scenario also assumes no major shifts in current policy regimes (this implies that it is rather conservative with regard to development of environmental policy). In addition, it assumes a world that is characterized by free trade of goods and services. Comparison shows that in terms of emissions the scenario compares well with other mid-range emission scenarios.

For population, specifically, this scenario follows the UN-medium scenario. The economic growth projections have been developed using ENV-LINKAGES model. Here, an assumption has been made that in the long-term total factor productivity converges to a value of around 1.7% per year. Several dynamic factors in the model such as population dynamics (access to labor and graying of the population), international trade and consistency with short-term trends cause regional growth rates to (temporarily) diverge from these long-term trends. In a next step, the economic projections were forwarded to TIMER. The TIMER model has been calibrated earlier to the IEA-2006 scenario – more-or-less reproducing the main outcome variables on the basis of the IEA-2006 economic and population assumptions. The trajectory of energy demand and supply have been forwarded back to the ENV-linkages model, which in its turn was calibrated on basis of the energy use patterns of the TIMER model.

OECD Baseline is the ‘no new policies’ baseline of the outlook. ‘No new policies’ implies no major initiatives or breakthroughs, such as a Doha accord. Existing policies will continue to operate and will be succeeded by equivalent policies after they formally expire. Policies that currently have been concretely legislated and instrumented and are yet due to enter into practice, will do so.

#### Baseline variant

is the globalisation variant to the baseline, as described in the ‘Key Variants’ chapter. It is not policy driven but a “sensitivity” case, assuming a quicker decrease of cost of international trade than in the baseline and a quicker convergence of prices on domestic and world markets. It has been included here especially in order to analyse the environmental implications of the larger shift in location of production that can be expected in these circumstances, in combination with regional differences in environmental efficiency.

#### pp OECD

sees OECD countries move more ambitiously on solving environmental problems than under baseline conditions. Non-OECD countries continue as under baseline conditions.

####

#### pp OECD+BRIC

depicts collaboration between the countries that by 2030 will be the significant players in the world: OECD members and in particular Brazil, Russia China and India. The collaboration comprises other policies than environment proper; of these other fields, in particular liberalisation of agricultural production and trade is modelled.

#### pp global

depicts worldwide collaboration on environmental and other issues. Of these other issues, in particular liberalisation of agricultural production and trade is modelled.

#### OECD 450 ppm

On the basis of the OECD baseline, a second scenario has been developed that aims to stabilization of greenhouse gas concentrations at 450 ppm CO2-eq. This is implemented by a carbon price. This tax induces emission reduction such energy efficiency improvement, fuel switch, and use of technology with carbon capture and storage. Emission are reduced by about 40-50% in 2050 compared to 2000. Emissions compared to baseline amount to nearly 70%. In the 450 ppm CO2-eq scenario used of fossil fuels is significantly reduced.

The policy cases are built on economic projections (with ENV-Linkages) that take into account the effects of climate policy, in particular a carbon tax, in terms of shifts between aggregate economic sectors and between regions. However, the modelling of this effect in ENV-Linkages is restricted to energy-related measures while impacts of climate mitigation in land-use, and impacts of other environmental policies are not addressed.

- | Specific focus | Modeling aspects | OECD Baseline | Baseline variant | pp OECD | pp OECD+BRIC | pp global | 450 pm multigas | Comments, questions, implications
- | - | - | baseline no new policies | globalisation variant. As described in the ‘Key Variants’ chapter | Environmental policy package in OECD | Environmental policy package in OECD as well as in BRIC. | Global cooperation for environmental policy | Climate Policy only case: 450 ppm GHG | -
Agriculture | subsidies and tariffs | LEITAP Productivity trends based on interpretation of FAO material and iteration LEITAP-IMAGE (climate change, location of expansion) | - | - | baseline | baseline PLUS agricultural liberalization between OECD and BRIC. Subsidies and Tariffs are reduced by 50% by 2030: starting in year 2010, decreasing by 3% per year. This is applied to import tariffs and export subsidies between countries of OECD and BRIC (bilateral) as well as input, output and factor subsidies within OECD and BRIC countries (unilateral) . | baseline PLUS global agricultural liberalisation. Subsidies and Tariffs are phased out and reduced by 50% by 2030: starting in year 2010, decreasing by 3% per year. This is applied to import tariffs and export subsidies between all countries AND Input, output and factor subsidies in all countries | baseline | Energy crops: TIMER/IMAGE assume 2nd generation (woody) biofuels on abandoned, marginal or degraded soils. Hence no trade-off with food production is visible. Production of energy crops is steerded by climate policy settings.
Climate Policy | pp OECD, pp OECD+BRIC, pp global take carbon taxes as entry point 450 ppm multigas is structured along technology wedges | ENV-Linkages, FAIR,TIMER IMAGE. ENV-Linkages is used to identify economic shifts induced by the carbon taxes. FAIR is used to find optimal response combination by region, sector and gas for each case. This includes abatement of land-use related emissions. | - | Baseline. Includes EU emission trading scheme. | Carbon tax in OECD only starting at 25 $ per ton of carbon dioxide and increasing 2.4 % per year. Start in 2012. | Carbon tax in OECD and BRIC, starting at 25 $ per ton of carbon dioxide and increasing 2.4 % per year. OECD countries start 2012. BRIC start 2020. | Carbon tax in OECD, BRIC and RoW starting at 25 $ per ton of carbon dioxide and increasing 2.4 % per year. OECD countries start 2012. BRIC start 2020. RoW start 2030. | 450 ppm global case. Detailed description available (article Van Vuuren et al) Includes effort to contain deforestation | -
Air pollution | Emissions of sulphur and nitrogen oxides; methane and other volatile organic compounds; carbon monoxide Urban concentrations of particulate matter and ground level ozone. Impacts on population health | EDGAR and adjustments to emission factors for TIMER. Hemispheric transport on the basis of TM3. Urban local contributions on the basis of GMAPS and regional emission projections MERGE is used to identify maximum feasible reduction paths on the basis of cost-curves Health impacts (excess mortality; and health loss in DALYs) on the basis of WHO Comparative Assessment of Risks ENV-Linkages to identify economic effects resulting from abatement costs | - | Baseline | Development towards but not quite reaching Maximum Feasible Reduction (as defined in from IIASA study) in OECD countries. Onset and speed differentiated by region (26 region-level) and sector (Transport; Power, Refineries and Industry; Domestic and other.) Phased decrease of emissions of sulpur oxides from marine shipping. | Development towards but not quite reaching Maximum Feasible Reduction (as defined in from IIASA study) in OECD countries and BRIC. Onset and speed differentiated by region (26 region-level) and sector (Transport; Power, Refineries and Industry; Domestic and other.) Some countries reach target level after 2030. Phased decrease of emissions of sulpur oxides from marine shipping | Development towards but not quite reaching Maximum Feasible Reduction (as defined in from IIASA study) worldwide . Onset and speed differentiated by region (26 region-level) and sector (Transport; Power, Refineries and Industry; Domestic and other.) Some low-income countries reach target level long after 2030. Phased decrease of emissions of sulpur oxides from marine shipping |  |
Water quality | Nutrient loading of surface and coastal waters | MNP Global Nutrient Model, using IMAGE (non-point) + separate point sources | Baseline (=IMAGE + point-source trend following from population, GDP and regional/country differences). For sanitation, it is assumed that access to improved sanitation in terms of number of inahbitants increases at the same rate as urbanisation. This is somewhat optimistic for some countries. For treatment, it is assumed that removal of nitrogen compounds on average improves halfway to the next best step in effectiveness (typical removal rates: primary/mechanical treatment=10–20%; secondary/biological= 35-55%; teriary/advanced= up to 80%) | baseline | in OECD countries Acces to improved sanitation: baseline Connection to sewage: relative to a target ol connecting all urban dwellers with improved sanitation to sewage: 50% of the gap between the 2000 situation and this target will have been closed by 2030. Treatment: relative to a target of having sewage treatment installed and upgraded to the next best removal efficiency for nitrogen compounds, it is assumed that by 2030 all participating countries have treatment installed and/or have upgraded installations to an average removal rate of the next best type of treatment. | in OECD countries and BRIC: Acces to improved sanitation: baseline Connection to sewage: relative to a target ol connecting all urban dwellers with improved sanitation to sewage: 50% of the gap between the 2000 situation and this target will have been closed by 2030. Treatment: relative to a target of having sewage treatment installed and upgraded to the next best removal efficiency for nitrogen compounds, it is assumed that by 2030 all participating countries have treatment installed and/or have upgraded installations to an average removal rate of the next best type of treatment. | IN OECD, BRIC and RoW Acces to improved sanitation: baseline Connection to sewage: relative to a target ol connecting all urban dwellers with improved sanitation to sewage: 50% of the gap between the 2000 situation and this target will have been closed by 2030. Treatment: relative to a target of having sewage treatment installed and upgraded to the next best removal efficiency for nitrogen compounds, it is assumed that by 2030 all participating countries have treatment installed and/or have upgraded installations to an average removal rate of the next best type of treatment. | Baseline | Synergy with reaching health objectives. Upgrading treatment from mechanical to biologcal or better ensures removal of pathogens.

The table below contains the definition of the timing variants of carbon taxes. There is a separate viewer for these variants.

Timing variants of carbon taxes Climate policy only ---- these cases are not comprehensive policy packages Reduced model set: ENV-Linkages and FAIR |
- |  | Tax profile | OECD | OECD plus BRIC | OECD, BRIC plus ROW | Results expected |
Immediate Tax |  | Immediate start on $25 that grows at 2.4% | Start in 2008 cc OECD 2008 | Start in 2008 cc OECD+BRIC 2008 | Start in 2008 cc global 2008 | Economic impacts, greenhouse gas emissions, temperature (regional) |
Phased Tax |  | $25 that grows at 2.4% (countries start at $25) | - | OECD Start in 2008; BRIC in 2020 cc OECD+BRIC phased | OECD countries start in 2008; BRIC in 2020; ROW in 2030 cc global phased | - |
Delayed Tax |  | $25 that grows at 2.4% (countries start at $25) | - | - | ALL Start in 2020 cc global delayed | - |