### Economic driving forces

#### Indicators:

Gross Domestic Product (GDP PPP) per capita Gross domestic product (GDP MER) per capita Industrial value added (IVA MER) per capita Service value added (SVA MER) per capita Economic structure | Private consumption per capita Total gross domestic product (GDP) Annual GDP Growth Rate Total private consumption

The economic indicators in IMAGE 2.4 are gross domestic product (GDP), industrial and service value added and private consumption. These indicators measure economic activity at the macro and sector level and hence indicate the pressure from economic forces in society. GDP and private consumption also function as welfare indicators.

MER vs PPP

| #### Gross domestic product (GDP) per capita
| unit: 1000 US$(1995)/yr (thousand 1995-US Dollars per capita per year) dimension: region

Gross Domestic Product (GDP) is a key indicator to measure macro-economic activity in the IMAGE 2.4 model. It is also used as a welfare indicator. GDP formally measures expenditures on private household consumption, investment and government purchases of goods and services, along with the balance of exports and imports of merchandise and non-factor services. Other economic growth indicators, such as private consumptions or service value added, are strongly related to GDP.

In IMAGE 2.4, growth of GDP (or related economic indicators) plays an important role in both the formulation for energy demand and food demand. The historic data for GDP used in IMAGE are taken from the World Bank's World Development Indicators. The future growth trajectories are determined using the WorldScan macro-economic model.

GDP is expressed here in terms of 1000 US$ per capita; the total GDP for each world region is obtained by multiplying the GDP per capita with the total population.

| #### Industrial value added (IVA MER) per capita
| unit: 1000 US$(1995)/yr (thousand 1995-US Dollars per year) dimension: region

Industrial value added (IVA) is the (monetary) value of the industrial products minus the value of the goods and services consumed for the production process. Industrial value added is an indicator for economic activity in the industry sector. The share of industry value added in GDP is related to the GDP development. The historic data for services value-added used in IMAGE 2.2 have been taken from the World Bank.

The future growth trajectories are determined using the WorldScan macro-economic model. These trajectories can be related to the assumptions described for the economic scenarios on the corresponding page. It should be noted that convergence dynamics in terms of technology play an important role in several of the WorldScan scenarios. This means that regions that currently have a relatively inefficient technology might benefit strongly from this assumption in terms of their growth rate for industrial value added.

In the TIMER energy model IVA functions as a driver for energy consumption in industry.

| #### Service value added (SVA MER) per capita
| unit: 1000 US$(1995)/yr (thousand 1995-US Dollars per year) dimension: region

Services value added (SVA) is the (monetary) value of delivered services minus the value of the goods and services used for delivering the services. Services value added is an indicator of economic activity in the services sector. The share of services value added in GDP is related to the development of GDP. The historic data for services value-added used in IMAGE 2.2 have been taken from the World Bank.

The future growth trajectories are determined using the WorldScan macro-economic model. These trajectories can be related to the assumptions described for the economic scenarios on the corresponding page. It should be noted that convergence dynamics in terms of technology play an important role in several of the WorldScan scenarios. This means that regions that currently have a relatively poorly developed service sector might benefit strongly from this assumption in terms of their growth rate for service value added.

In the TIMER energy model SVA functions as a driver for energy consumption in the services sector.

| #### Economic Structure
| unit: none (fraction) dimension: region, sector

Gross Domestic Product is equal to the sum of value-added of three main sectors: agriculture, industry (mainly manufacturing industries, but also including raw material production and mining) and services. In the past century there has been a persistent trend in most world regions that, with an increasing GDP per capita, the fraction of agriculture declines whereas the fraction of industry and, later on, the fraction of services increases. The graph shows these changes in economic structure for the historical period 1971-1995 (based on World Bank data) and the scenario results for the future period 1995-2100.

The growth rates of the different sectors are a function of the assumptions described for the economic scenarios on the corresponding page. It should be noted that convergence dynamics in terms of technology play an important role in several of our scenarios.

| #### Private consumption per capita
| unit: 1000 US$(1995)/yr (thousand 1995-US Dollars per year) dimension: region

Private consumption reflects expenditures on private household consumption and largely determines energy consumption in the residential sector in the energy model. Private consumption can be expressed per capita; the total private consumption for each world region is obtained by multiplying per capita private consumption with total population. In IMAGE 2.2, private consumption forms an important driving force for the energy demand in the residential sector. It is also used as a welfare indicator.

| #### Total gross domestic product (GDP)
| unit:1000 mln US$(1995)/yr (thousand million 1995-US Dollars per year) dimension: region

Total Gross Domestic Product (GDP) shows the total GDP for each region and for the world. GDP formally measures expenditures on private household consumption, investment and government purchases of goods and services, along with the balance of exports and imports of merchandise and non-factor services. Total GDP for each world region is calculated by multiplying GDP per capita and population. The historic data used in IMAGE 2.2 have been taken from the World Bank. The scenario results are determined using the WorldScan model.

| #### Annual GDP growth rate
| unit:% dimension: region

Annual GDP growth rates express the annual change in Gross Domestic Product (GDP) between two subsequent years (see further the description for GDP). The indicator is shown as its moving average value to smooth some of the (historic) jumps in growth rates. The scenario results for GDP in the 1995-2100 period are determined using the WorldScan model. The WorldScan model uses time-steps of 5 year in its calculation. The rest of the IMAGE 2.2 framework uses a 1 year time-step, which causes this indicator to show small cyclic increases and decreases over 5 year periods.

| #### Total private consumption
| unit: 1000 mln US$(1995)/yr (thousand million 1995-US Dollars per year) dimension: region

Total private consumption shows the total private consumption for each of the IMAGE 2.4 regions as well as the world total. Total private consumption is calculated for each world region by multiplying private consumption per capita and population (see further Private Consumption per capita).