Global socio-economic and climate change mitigation scenarios through the lens of structural change

Article - March 30, 2022
A new paper has been published on structural change as a largely unexplored aspect of global socio-economic and climate change mitigation scenarios. Structural change can drive energy and land use as much as economic growth and shape mitigation opportunities and barriers. Meanwhile, stringent climate policy is inducing specific structural and socio-economic transformations that are still not well understood.
In this paper multisectroal macroeconomic IAMs are studied as tools that can capture the key drivers of structural change and assess how sectoral composition and intensity of trade in global and regional economies is affected under a baseline and 2°C policy scenario by 2050.

Two are the main findings:

  • Baseline projections across models illustrate the uncertainty around future economic pathways, especially in emerging economies, and the implications for energy use and emissions.
  • Climate policy in the 2°C scenario in all models imposes only a second-order effect on the economic structure at macro-sectoral level, i.e., agriculture, manufacturing, and services, compared to the changes modelled in the Baseline scenario. However, this conceals more radical changes for individual industries, within the energy sector in particular.

Read the full paper here.