1. THE NEW
OECD ENVIRONMENTAL OUTLOOK
Shardul Agrawala, Head of Environment and Economy Integration Division
Elisa Lanzi, Senior Economist
Working Party on Climate Change (WPCC)
27 September 2023

2. Past Outlooks
EPOC has produced a series of highly impactful Environmental Outlooks
Environmental Outlooks Thematic Outlooks

3. • Focus on the “triple planetary crisis”
• Model-based quantitative analysis, complemented with qualitative
insights
– 2050 time horizon, aligned with many international policy goals
– Focus on interlinkages between the three environmental issues
– Consideration of cross-cutting issues, such as material and water
resources 3
The new Environmental Outlook
Climate change Biodiversity Pollution

4. • What are the consequences of current policies on
climate, biodiversity and pollution by 2050?
• What are the benefits and potential trade-offs of
integrated policies to tackle the triple planetary
crisis?
4
Main questions posed

5. 5
The three planetary challenges are interlinked

6. 6
Policy responses
• Nationally Determined Contributions (NDCs) under the Paris
agreement.
• An increasing number of net-zero targets by the middle of the century.
Climate
• The Kunming-Montreal Global Biodiversity Framework
• Halt and reverse biodiversity loss and put nature on a path to
recovery, by 2030.
• By 2050 biodiversity is restored and sustainably used.
Biodiversity
• Updated WHO air quality guidelines.
• Negotiations to develop a post 2020 UN framework on the sound
management of chemicals and waste are in progress.
• Negotiations to stop plastic leakage to oceans are ongoing.
Pollution

7. 7
Interlinkages between the three policy domains
Reduce fossil fuel intensity
Forest carbon sequestration Expand use of bioenergy
CLIMATE
Improve air quality
Eliminate plastic leakage
Reduce fertilisers
POLLUTION
Increase protected areas
Restore ecosystems
Preserve natural ecosystems
BIODIVERSITY
Increase
circularity

8. Modelling the triple planetary crisis
Economic growth: macro calibrated to ENV-Growth
8
Demographics Capital Technology
Economic growth by region
Land
use
Transport
Energy
use
Extraction and
mining
GHG emissions
Air pollutant
emissions
Water pollutant
emissions
Land use change
Pollution
Climate
change Biodiversity
Economic drivers
Sectoral activity
Env. pressure
Env. change

9. In-house modelling tools:
economic drivers to environmental pressures
Multisectoral
model
ENV-
Linkages
Environmental pressure
(GHG, air pollutants,
materials, plastics)
Structural change
assumptions on demand
and production
Macro
long-
term
model
Capital
Technology
Labour
Demographics
Economic
projections
Projections of
environmental
pressure
9

10. • Policy scenarios that reflect international goals
• Climate change: transition towards net-zero
• Biodiversity: halt biodiversity loss and nature positive solutions
• Pollution: improve air quality, reduce plastic and chemical pollution
• An integrated policy scenario
• Take into account spillover effects
• Address possible trade-offs across domains
• Assess feasibility of achieving multiple environmental goals
10
Policy scenarios

11. • Build on the recently published NZE scenario
Countries achieve carbon neutrality by their
commitment date (2050, 2060 or 2070)
Going beyond carbon pricing
Price-based instruments: carbon pricing and other taxes
Other instruments: household subsidies, power
regulations, buildings and transport regulation, energy
efficiency
Possible improvements
Update ambition (NDCs, NZE commitments)
Increase scope: CO2, CH4, N2O, BC
11
The climate scenario
• Build on the recently published NZE scenario
• Countries achieve carbon neutrality by their
commitment date (2050, 2060 or 2070)
• Going beyond carbon pricing
– Price-based instruments: carbon pricing and other taxes
– Other instruments: household subsidies, power
regulations, buildings and transport regulation, energy
efficiency
• Possible improvements
– Update ambition (NDCs, NZE commitments)
– Increase scope: CO2, CH4, N2O, BC

12. The climate scenario:
gross and net emissions
Source: OECD ENV-Linkages model (Fouré et al., 2023).
Carbon neutrality
“net” CO2 emissions in
2050: 5.6 Gt
“gross” CO2 emissions
in 2050 : 11 Gt
12
Emissions and sequestration of CO2 in the NZE Ambition scenario (Gt CO2)

13. 13
Next steps and timeline
2023
• Selecting external partners
• Establishing modelling approach
• Modelling baseline 2024
• Finalising baseline
• Modelling policy scenarios
• Working with external partners
2025
• Finalising scenario analysis
• Approval process
• Publication
2026 (TBC)
• Environment Ministerial

14. • What are the key policy interactions between climate
and other domains that you would like the Outlook to
include?
• What important factors should be considered in
designing a global climate scenario to study the triple
planetary crisis?
• What policy insights and recommendations would
countries welcome to address the triple planetary crisis?
14
Questions for discussion

15. THANK YOU
Shardul.Agrawala@oecd.org
Elisa.Lanzi@oecd.org