Emissions Scenarios - IPCC

116 Scenario Driving Forces
Given the inherent ambiguities of such a complex,
multidimensional issue, it is easiest to define and develop
indicators of no development. Estimates indicate, for instance,
that 1.3 billion people in developing countries live on incomes
of less than US$1 (PPP based) per day, a level used to define
the absolute poverty cut-off in intemational compaiisons
(UNDP, 1997). An equal number of people are estimated to
have no access to safe drinking water (UNDP, 1997) and 2
billion people are estimated to have no access to services
provided by the use of modern energy forms (WEC, 1993).
Income is not an end in itself, but a way to enable human
choices, or to foreclose them in the case of poverty. Therefore,
levels of per capita income (GDP or GNP) have been widely
used as a measure of the degree of economic development, as
in many instances such levels correlate closely (as lead or lag
indicator) with other indicators and dimensions of social
development, such as mortality, nutiition, and access to basic
services, etc. Average income values also do not indicate the
distribution of income, which is an important quantity.
Composite measures, such as the UN Human Development
Index, are also used in historical analyses (see Box 3-1). Note,
however, that the overall nature of scenario results may not
vary much even if some other measure could be used, because
often-used components, such as literacy rates, are generally
correlated with income levels.
In fact, per capita income is the (and often only) development
indicator used in the literature for long-term energy and GHG
emissions scenarios. This explains why this review chapter,
while recognizing the importance of altemative dimensions
and indicators to describe long-term human development,
almost exclusively embraces an economic perspective.
The widespread use of GDP or GNP per capita (however
measured) should not distract from the fact that, while a
powerful indicator, it does not describe all aspects of economic
development (see Box 3-1). GDP and GNP are indicators of
financial flows (see Box 3-1), and are not designed to measure
stock variables such as the size of the capital stock in an
economy. GDP and GNP relate only to goods and services that
are subject to market transactions, that is only those activities
that are part of the formal economy. Subsistence and other
"gray" economic activities and socially important obligatory
activities, such as childcare or household work, are not
included; also, depletion allowances for natural capital and
resources are not considered.
Although PPP comparison (see Box 3-1) is considered a valid
indicator of relative wealth, it is sometimes quite uncertain and
dependent on detailed comparison exercises. As a result, even
if studies and scenarios consistently use the same indicator of
economic development, numeric values are often not directiy
comparable because of large differences in base-year values.
Comparison of growth rates are more robust, but even here
many difficulties exist (see, e.g., Alcamo et al., 1995, and
Chapter 2).
3.3,2. Historical Trends
Rostow (1990) described several stages in the economic
development process:
• First, the pre-industrial economy, in which most
resources must be devoted to agriculture because of the
low level of productivity.
• Second, the phase of capacity-building that leads to an
economic acceleration.
• Third, the acceleration itself, which requires about two
decades.
• Fourth, about six decades of industrialization and
catch-up to the "productivity frontiers" prevailing in the
industrialized countries.
• Fifth, the period of mass-consumerism and the welfare
state.
It is important not to conceptuaUze economic development as
a quasi-autonomous, linear development path. Numerous
socio-institutional preconditions have to be met before any
"take off' into accelerated rates of productivity and economic
growth can materialize (see Section 3.3.4). "Leading sectors"
(Fogel, 1970) that drive productivity and output growth change
over time (Freeman and Perez, 1988; Freeman, 1990), and
different "industrialization paths" (Chenery et al., 1986) have
been identified in historical analyses. Still, historical evidence,
consistent with neoclassic growth theory, allows a number of
generalizations as to the pattems of advances in productivity
and economic growth.
By and large, growth rates aie lower for economies at the
technology and productivity frontier, compared to those
approaching it. For instance, in the 19* century productivity
and per capita GDP growth in the rapidly industrializing US far
exceeded those of England, then at the technology and
productivity frontier. Likewise, in the post-World War II period
growth rales in Japan and most of Western Europe exceeded
those of the US (by then at the technology and productivity
frontier) (Maddison, 1991, 1995). High human capital
(education), a favorable institutional environment, free trade,
and access to technology are acknowledged as key factors for
rapid economic catch-up (see Section 3.3.4). Likewise,
entrenchment in progressively outdated capital and technology
vintages acts as a retarding force against growth (Frankel,
1955), and rapid capital turnover and possibilities to "leapfrog"
(Goldemberg, 1991) outdated technologies and infrastructures
provide the potential for faster economic catch-up.
Perhaps the most comprehensive compilation of data on
historical economic development is that of Maddison (1995).
Table 3-2 shows Maddison's per capita GDP growth rate
estimates for selected regions and time periods. Since 1820
global GDP has increased by a factor of 40, or at a rate of about
2.2% per year. Per capita GDP growth was 1.2% per year faster
than population growth. In the past 110 years (a time frame
comparable to that addressed in this report) global GDP
increased by a factor of 20, or at a rate of 2.7% per year, and