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Environment

Environment-economy modelling

 

The OECD has been using economic models and quantitative assessments since the late 1980s to inform policy makers of the costs, benefits and potential tradeoffs of environmental policies and climate change mitigation scenarios. The main environment-economy modelling work of the OECD rests upon the in-house models ENV-Linkages, a dynamic general equilibrium model and ENV-Growth, a macroeconomic growth model based on a conditional convergence framework. This modelling work is aimed to assist governments in understanding the costs of environmental inaction as well as the benefits of policy action for key environmental issues, including climate change, air pollution, resource use and the transition to a more circular economy.

global material resources outlook to 2060



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This report presents global projections of materials use and their environmental consequences, providing a quantitative outlook to 2060 at the global, sectoral and regional levels for 61 different materials (biomass resources, fossil fuels, metals and non-metallic minerals). It explains the economic drivers determining the decoupling of economic growth and materials use, and assesses how the projected shifts in sectoral and regional economic activity influence the use of different materials. The projections include both primary and secondary materials, which provides a deeper understanding of what drives the synergies and trade-offs between extraction and recycling. The report projects a doubling of global primary materials use between today and 2060. Population and converging per capita income growth drive the growth in materials use. However, structural change, especially in non-OECD countries, and technology improvements partially dampen that growth.

 

key areas of our work

 

MODELLING TOOLS

 

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Reports

  • The Land-Water-Energy Nexus: Biophysical and Economic Consequences – This report contributes to the discussion of interconnections between scarce resources by highlighting the nexus between land, water and energy (the LWE nexus). It focuses on a dynamic, integrated, and disaggregated analysis of how land, water and energy interact in the biophysical and economic systems. The report provides projections for the biophysical and economic consequences of nexus bottlenecks until 2060, highlighting that while the LWE nexus is essentially local, there can be significant large-scale repercussions in vulnerable regions, notably on forest cover and in terms of food and water security.
  • The Economic Consequences of Outdoor Air Pollution – Unless more stringent policies are adopted, findings point to a significant increase in global emissions and concentrations of air pollutants, with severe impacts on human health and the environment. The impacts of outdoor air pollution are projected to lead to significant economic costs, which are illustrated at the regional and sectoral levels, and to substantial annual global welfare costs.
  • The Economic Consequences of Climate Change – This report provides a new detailed quantitative assessment of the consequences of climate change on economic growth through to 2060 and beyond. It focuses on how climate change affects different drivers of growth, including labour productivity and capital supply, in different sectors across the world. The sectoral and regional analysis shows that while the impacts of climate change spread across all sectors and all regions, the largest negative consequences are projected to be found in the health and agricultural sectors, with damages especially strong in Africa and Asia.

 

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