OECD global long-run economic scenarios: 2025 update

In the business-as-usual energy transition scenario with a median climate damage curve (BAU1), global annual potential output growth is projected to moderate gradually from around 2.9% currently to 2.7% in the first part of the 2030s, 2.1% in the early 2040s and around 1.3% in the latter part of the century. All regions other than sub-Saharan Africa contribute to this slowdown, but East Asia and Pacific disproportionately so.

This global moderation in potential growth reflects declining working-age population growth (working ages being defined as 15 to 74) and slowing trend labour efficiency growth in the emerging-market economies. According to the latest United Nations population projections (2024 revision, medium variant) on which all scenarios in this paper are built, the growth contribution of the trend working-age population component, currently around 1.2 pp, declines steadily and turns negative in the mid-2070s.

Use this interactive chart to explore outcomes across locations and scenarios.

When looking at an output per capita measure, a concept more closely related to living standards, it is the projected decline in the working-age population share (of total population) that matters, and its growth contribution is essentially zero at the global level over the projection period. As a result, the per capita measure slows by less than the headline measure, falling from about 2% annually today to 1¼ per cent by 2050 and remaining broadly stable thereafter. Use this interactive chart to explore outcomes across locations and scenarios. 

India’s potential growth rate is projected to remain above that of the United States throughout the projection period, whereas China’s falls below that of the United States by 2040-45 and below zero by 2070-75.

Use this interactive chart to compare potential growth or potential per capita growth in a given scenario across two or more countries/regions. Use [Ctrl+click] to select multiple locations. 

In the business as usual scenarios (BAU1 and BAU2), decarbonisation of the global energy mix continues at the recent historical pace, an assumption implemented by making country-level primary energy mixes continue to evolve along time trends estimated over the past two decades. This implies energy substitution that is clearly insufficient to reach a global net zero GHG emissions objective in this century as carbon-based sources still account for three quarters of the global primary energy mix in 2050 and more than 60% in 2100.

Use this interactive chart to explore primary energy mix assumptions for the business-as-usual and accelerated energy transition scenarios across countries and regions. 

In the business-as-usual energy transition scenario with a median climate damage curve (BAU1), global temperatures continue to rise, reaching 2.5°C above pre-industrial levels by 2100. This warming leads to significant economic costs: climate-related damages are expected to reduce global GDP by nearly 9% by the end of the century, up from over 1.5% today. The BAU1 scenario is based on a stylised median damage curve within the wide range proposed in the scientific literature, but the global climate damage projection is perhaps the most uncertain aspect of this exercise.

Use this interactive chart to explore climate damages and other outcomes across countries and regions. You can select more than one scenario at once with [Ctrl+click]. 

There is an output trade-off associated with transitioning to low-carbon energy sources, between the shorter-run costs of carbon mitigation and the longer-run benefits of avoided climate damages. Both are subject to considerable uncertainty. Use this interactive chart to explore this trade off across the four energy transition scenarios. The growth outcomes are shown relative to the relevant counterfactual business-as-usual scenario with the same climate damage curve (as shown in the Figure above).