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Vision 2050 Title of the event Place & date World Business Council for Sust ainable D evelopment The new agenda for business Summary Overview of the Vision 2050 project Part 1: Business-as-usual outlook to 2050 Part 2: The Vision for 2050 Part 3: The pathway to 2050 Part 4: Business opportunities Conclusion: Urgent action is needed! About Vision 2050 • The vision concept and the 2050 timeframe provide a clear and feasible goal for… o Identifying the gap between today and 2050 o Developing a pathway and areas of action o Clarifying the business perspective o Quantifying market potential o Agreeing on action points and next steps A collaborative effort involving 29 companies A global business dialogue The different steps of the Vision 2050 project Opportunities Pathway to 2050 Vision 2050 Business-asusual outlook to 2050 Growth and degradation Growth Degradation The world population is increasingly urban Greenhouse gas emissions keep rising Glo bal p opulation b y t yp e of area and b y region – 1950-2050 GHG emissions b y regions 10,000 80 9,000 70 60 7,000 6,000 Urban - Less developed 5,000 Rural - Less developed Urban - M ore developed 4,000 Rural - M ore developed 3,000 GtCO2eq Population in millions 8,000 50 Res tof the world 40 BRIC(Brazil, Rus s ia, India,China) 30 OECD 20 2,000 1,000 10 0 0 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 Global economic power is shifting 1970 1980 1990 2000 2010 2020 2030 2040 2050 Environmental degradation jeopardizes people’s quality of life Top 10 economies by GDP in 2050 People living in areas of w at er stress b y level of st ress 80,000 GDP 2006 US$ bn 70,000 2005 60,000 50,000 2030 Severe 40,000 2005 Medium 30,000 Low 2030 20,000 10,000 No 2005 an y er m 0 G Ja pa n Ki ng do m 2030 500 1,000 1,500 U ni te d R us si a In do ne si a Br az il ex ic o M In di a St at es U ni te d C hi na 0 2,000 2,500 3,000 3,500 4,000 Millionsof people The global middle class is rapidly expanding The world could be running out of some resources Population in low- and middle-incom e countries earning US$ 4,00 0-17,000 per capit a (p urchasing p ower parit y) Global sup pl y forecast s accord ing t o t he im plied ult im at e recoverable resources of convent ional oil, date of peak produ ct ion and t he post-p eak aggregat e decli ne rat e 1.2 billion 8% 14 12 Sub-Saharan Afric a SouthAs ia 10 Middle Eas and t North Afric a 8 6 LatinAmeric aand the Caribbean Europeand CentralAs ia 400 million Eas tAs iaand the 4 2 Forecastpost-peakdeclinerate Percent of globalpopulation 16 7% 5% 4% 3% USEIA Shell 6% Peak Oil Consulting OPEC LBST Miller IEA Meling Campbell BGR 2% Uppsala 1% Total 0 0% 2005 2030 2000 2005 2010 2015 2020 2025 2030 Forec as tdate of peak 2035 2040 2045 2050 Growth: The world population is increasingly urban Global population by type of area and by region – 1950-2050 10,000 9,000 Population in millions 8,000 7,000 6,000 Urban - Less developed 5,000 Rural - Less developed Urban - More developed 4,000 Rural - More developed 3,000 2,000 1,000 0 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 Source: UN Population Division, World Population Prospects: The 2008 Revision, 2008 Growth: The world population is increasingly urban Between now and 2050 the global population is expected to increase from 6.9 billion to more than 9 billion, with 98% of this growth happening in cities and in the developing and emerging world Growth: Global economic power is shifting Top 10 economies by GDP in 2050 80,000 60,000 50,000 40,000 30,000 20,000 10,000 er m an y Ki ng d U ni te d G om pa n Ja ia ne s In do si a R us ic o M ex il Br az at e St d U ni te In di a s 0 C hi na GDP 2006 US$ bn 70,000 Source: Goldman Sachs, BRICs and Beyond, 2007 Growth: Global economic power is shifting Most of the economic growth will happen in developing or emerging economies Growth: The global middle class is rapidly expanding Population in low- and middle-income countries earning US$ 4,000-17,000 per capita (purchasing power parity) 1.2 billion 16 Percent of global population 14 12 Sub-Saharan Africa South Asia 10 Middle East and North Africa 8 6 Latin America and the Caribbean Europe and Central Asia 400 million East Asia and the 4 2 0 2005 2030 Source: World Bank, Global Economic Prospects, 2007 Growth: The global middle class is rapidly expanding About 800 million people will join the middle class in low and middle income countries Degradation: Greenhouse gas emissions keep rising GHG emissions by regions 80 70 GtCO 2eq 60 50 Rest of the world 40 BRIC (Brazil, Russia, India, China) OECD 30 20 10 0 1970 1980 1990 2000 2010 2020 2030 2040 2050 Source: OECD, Environmental Outlook to 2030, 2008 Degradation: Greenhouse gas emissions keep rising GHG are projected to grow by a further 52% to 2050, resulting in an increase in global temperature in the range of 1.7-2.4° C, leading to increased heat waves, droughts, storms and floods, resulting in severe damage to key infrastructure and crops Degradation: Environmental degradation jeopardizes people’s quality of life People living in areas of water stress by level of stress 2005 2030 Severe 2005 Medium Low 2030 No 2005 2030 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 Millions of people Source: OECD, Environmental Outlook to 2030, 2008 Degradation: Environmental degradation jeopardizes people’s quality of life Over the past half century 15 of the 24 ecosystem services have been degraded according to the Millennium Ecosystem Assessment Degradation: The world could be running out of some resources Global supply forecasts according to the implied ultimate recoverable resources of conventional oil, date of peak production and the post-peak aggregate decline rate Forecast post-peak decline rate 8% 7% 6% 5% 4% 3% USEIA Shell Peak Oil Consulting OPEC LBST Miller IEA Meling Campbell BGR 2% Uppsala 1% Total 0% 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 Forecast date of peak Source: UKERC, The Global Oil Depletion Report, 2009 2050 Degradation: The world could be running out of some resources Oil production will peak and decrease Ecological estimates: Getting to one planet by the end of the 2050s Vision 2050 ecological footprint against business-as-usual How many Earths do we use? 2.5 2.3 Earths (BAU) Numberof Earths 2 1.5 1.1 Earths (Vision2050 ) 1 Carbon footprint Cropland 0.5 Grazing land Forest land 0 Built-up land 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 Fishing ground Year Source: Global Footprint Network and WBCSD Vision 2050, 2010 Asian countries European countries Meeting human demands within the Latin American and ecological limits of the planet Caribbean countries North American countries Oceanian countries Meeting the dual goals of sustainability Asian countries European countries Latin American and Caribbean countries North American countries Oceanian countries 10 8 6 0.2 4 2 Ecological Footprint (global hectares per person) 12 World average biocapacity per person in 1961 12 10 8 6 4 2 World average biocapacity per person in 2006 Ecological Footprint (global hectares per person) African countries UNDP threshold for high human development High human development and low ecological impact High human development within the Earth’s limits 0.4 0.6 United Nations Human Development Index 0.8 1.0 Source: © Global Footprint Network (2009). Data from Global Footprint Network National Footprint Accounts, 2009 Edition; UNDP Human Development Report, 2009 Nine billion people living well, within the limits of the planet • • • • • • Diversity and interdependence A different economic reality Multi-partner governance In markets: Innovating and deploying solutions Dealing with climate change An evolved workplace and evolved employers pathway to Vision 2050 To aThe sustainable world in 2050 TODAY From business-as-usual People’s values Vision for 2050 “One World – People and Planet” lifestyles Turbulent teens Understanding and encouraging change through cooperation Happiness does not completely depend on GDP Income, economic well-being and happiness in the USA Income, economic well-being and happiness in the USA (Index: 1980=100) (index: 1980 = 100) 200 Transformation time Sustainable living becomes mainstream 180 160 GDP per capita 140 Economic well-being Happiness 120 100 80 1980 1985 1990 1995 2000 2005 Source: Deutsche Bank Research, Measures of Well-being, 2006 (from GGDC, CSLS, GSS/Eurobarometer) Human development Vision for 2050 Basic needs of all are met Turbulent teens Building trust, entrepreneurialism, inclusiveness People are living longer Life expect by regionby- 1950-2050 Life ancy expectancy region – 1950-2050 90 80 Life expectancy (years) Transformation time Ecosystems and enterprises help create value 70 Lessdeveloped regions - least developed countries (Male) 60 More developed regions (Male) Lessdeveloped regions - least developed countries (Female) 50 More developed regions (Female) 40 30 1950 1975 2000 2025 2050 Source: UN Population Division, World Population Prospects: The 2008 Revision, 2008 Economy Vision for 2050 True value, true costs, true profits Turbulent teens Redefining progress Transformation time True values help drive inclusive markets Reconsidering success and progress What GDP does and does not measure Happiness genetics Living conditions Economic well-being environment family GDP depreciation leisure consumption health wealth friends (inequality) work satisfaction education communities net investment non-market activity net income going to foreigners regrettables (unemployment) (insecurity) (bracketsindicate negative impact) Source: Deutsche Bank Research, Measures of Well-being, 2006 Agriculture Vision for 2050 Enough food, water and biofuels through a new Green Revolution Turbulent teens Cultivating knowledgeintensive agriculture Cereal yield by region – 1960-2010 4.0 3.0 Tonnes per hectare Transformation time Growth in global trade, crop yield and carbon management Africa’s yield growth has lagged behind other regions Africa Southern Asia 2.0 Europe 1.0 0.0 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 Source: Ministry of Foreign Affairs of Denmark, Realising the Potential of Africa’s Youth, 2009 (FAOSTAT) Forests Vision for 2050 Recovery and regeneration Turbulent teens Carbon incentives drive progress Consumption of industrial roundwood by region – 1965-2030 900 800 700 North America 600 millions m 3 Transformation time Growing momentum for forest protection and efficient production Increasing consumption of industrial roundwood Europe 500 Asiaand 400 Latin America 300 Africa 200 Westernand Central Asia 100 0 1965 1990 2005 Source: FAO, State of the World’s Forests 2009, 2009 2020 2030 Energy and power Vision for 2050 Secure and sufficient supply of low-carbon Turbulent teens Tilting and leveling the playing field for energy Transformation time Greenhouse gas emissions peak and decline Huge capacity additions needed to deliver the new energy mix Average annual power generation – capacity additions – 2010-2050 30 - 35 CCS Coal- 1 - 20 CCS Gas- plants (500 MW) plants (500 MW) 24 - 32 nuclear plants (1,000 MW) 1/5 of Canada's hydropower capacity 30 - 100 biomass plants (50 MW) 2,900 - 14,000 wind turbines (4 MW) Wind- 775 - 3,750 wind turbines (4 MW) Wind-o 50 - 130 geothermal units (100 MW) 115 - 215 million m² solar panels 45 - 80 CSPplants (250 MW) 0 10 20 30 GW per year 40 50 Source: International Energy Agency, Energy Technology Perspectives 2008, © OECD/IEA 2008 60 Energy and power Vision for 2050 Secure and sufficient supply of low-carbon Turbulent teens Tilting and leveling the playing field for energy A new energy mix to reduce CO2 emissions World abatement of energy-related CO2 emissions in the 450 scenario Transformation time Greenhouse gas emissions peak and decline Source: International Energy Agency, World Energy Outlook 2009, © OECD/IEA 2009 Buildings Vision for 2050 Close to zero net energy buildings Turbulent teens Turning the market toward energy efficiency System integration is key to achieving energy efficiency in buildings Players and practices in the building market Transformation time Smarter buildings, wiser users Source: WBCSD, Energy Efficiency in Buildings, 2008 Mobility Vision for 2050 Universal access to safe and low-impact mobility Turbulent teens A holistic approach improves overall transport Transformation time Towards alternative drivetrains and fuels Materials Vision for 2050 Not a particle of waste Turbulent teens Doing more with less Eliminating waste by closing the material loop An alternative material life cycle Transformation time Closing the loop Manufacturer Long use Reuseof products Reuseof parts Closed loop materials recycling Open loop materials recycling User Landfill Source: WBCSD The risks to achieving Vision 2050 Risks in the elements of the pathway Wild cards that could take the world off the Vision 2050 track • People’s values: Can we all agree? • New understanding of how the Earth works • Economy: Swimming against the tide of mainstream economics • A World of new ideological blocs, failing states or resources war • Agriculture: Politics, water shortages could uproot the Green Revolution • Disagreement on valuing the environment • Unintended consequences of new technologies • Forests: Is it too late already? • Energy: Progress may be victim to power struggles • Extended economic recessions or economic depression • Buildings: In a bad market incentives could fall • Natural disasters • Mobility: Will not become sustainable without a systemic approach • Materials: Recycling can be expensive Economic estimates: Considerable opportunities Illustrative estimates of the global order of magnitude of potential additional sustainability related business opportunities in key sectors in 2050 A n n u al val u e i n 2 0 5 0 ( US$ t r i l l i o n at co n st an t 2 0 0 8 p r i ces: m i d -p o i n t s w i t h r an g es sh o w n i n b r ack et s) % o f p r o j ect ed w o r l d GDP i n 2050 Energy 2.0 (1.0-3.0) 1.0 (0.5-1.5) Forest ry 0.2 (0.1-0.3) 0.1 (0.05-0.15) Agriculture and food 1.2 (0.6-1.8) 0.6 (0.3-0.9) Water 0.2 (0.1-0.3) 0.1 (0.05-0.15) M et als 0.5 (0.2-0.7) 0.2 (0.1-0.3) To t al : Nat u r al r eso u r ces 4 .1 ( 2 .0 -6 .1) 2 .0 ( 1.0 -3 .0 ) 2.1 (0.8-3.5) 1.0 (0.5-1.5) 6 .2 ( 2 .8 -9.6 ) 3 .0 ( 1.5 -4 .5 ) Sect o r s Healt h and educat ion To t al Source: PwC estimates drawing on data from IEA, OECD and the World Bank Ecological estimates: Getting to one planet by the end of the 2050s Vision 2050 ecological footprint against business-as-usual How many Earths do we use? 2.5 2.3 Earths (BAU) Numberof Earths 2 1.5 1.1 Earths (Vision2050 ) 1 Carbon footprint Cropland 0.5 Grazing land Forest land 0 Built-up land 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 Fishing ground Year Source: Global Footprint Network and WBCSD Vision 2050, 2010 Business domains for the next decade – Opportunities and overlaps Building & transforming cities: The development of cities presents significant opportunities Investment requirements for urban infrastructure up to 2030 Water Energy Roads and railways Ports and airports 0 10 20 US$ trillions Source: Booz Allen Hamilton, Strategy+Business, n°46, 2007 (from Booz Allen Hamilton, Global Infrastructure Partners, World Energy Outlook, OECD, Boeing, Drewry Shipping Consultants, U.S. Department of Transportation) 30 Building & transforming cities: The development of cities presents significant opportunities Estimates suggest that by 2030 US$ 40 trillion will need to be invested in urban infrastructure worlwide Water infrastructure: A great variety of solutions will be needed Demand for water will outstrip supply – Action is needed to plug the gap Base-case demand, supply and corresponding gaps for certain regions Aggregate 2030 demand Aggregate gap 2030 supply Billion m 3 India 1,498 818 China Agriculture Industry São Paulo state 20 South Africa 18 0% 20% 40% 60% 80% 100% Municipal and domestic 0 100 200 300 400 500 600 700 800 Billion m 3 0 10 20 30 40 50 60 % of demand Source: McKinsey/Water Resources Group, Charting our water future, 2009 Waste management infrastructure: Excess inputs and outputs will be redeployed/reused Metals and materials will increasingly be mined from products in use Outlook for different sources of aluminum – 1995-2030 350 Million tonnes 300 250 200 Virgin metal shipments Scrap/increased recycling rates 150 Aluminum bank (alumin um stored in pr oducts) 100 50 0 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 Source: Hydro Aluminium, Aluminium for a Viable Society, 2004 Health Increased access to better healthcare and prevention will have positive effects on the economy and businesses Products and services for aging populations The world is aging The world population by age cohort – 1950-2050 100% 90% 80% 70% 60% Population aged 65+ 50% Population aged 15-64 40% Population aged 0-14 30% 20% 10% 0% 1950 2000 2050 Source: UN Population Division, World Population Prospects: The 2008 Revision, 2008 Products and services for aging populations Each month around 1.9 million people in the world will join the ranks of the over 65s By 2020 people aged 65 and above will account for about one-fifth of the total global population Building and managing complex coalitions Building complex coalitions for social and economic development Traditionaldevelopment (supply-side bias) New partnershipparadigm Nongovernmental organiz ations (NGO s) High Complex coalition structures Social Development Private sector Low Market-basedapproach (demand-side bias) Low EconomicDevelopment High Source: Accenture, Development Collaboration, None of our Business? 2009 Conclusion and way forward Urgent action is needed • Complex systems will provide the foundation • Business cannot do it alone • The journey begins now…