The World in 2050-Quantifying the shift in the global economy - HSBC

EconomicsGlobal4 January 2011abcRunning out of inputs?Much of the discussion about ecological capacityhas been cast in the language of ‘running out’ ofkey inputs, notably energy and metals.In the case of metals, core commodities such asaluminium, iron and even copper are widelyavailable, and easily recyclable. Even rare earthsare not so rare. Total global production in 2009 of14 key ‘rare earth’ materials amounted to 127,520tonnes. Yet, according to a recent report by theUS Department of Energy, global reserves standat some 99 million tonnes. The issue, however, isthat current production is highly concentrated,with 95% of output accounted for by just onecountry, China.Energy availability is somewhat morecomplicated. The era of cheap and easilyaccessible oil supplies is clearly over, with somepointing to the risk of ‘peak oil’ disruptingeconomic stability. A report on energy securityfrom the Lloyds insurance market concludes, forexample, that “we are heading for a global oilsupply crunch and price spike”. Reserves of coaland gas are more plentiful, however. And suppliesof renewable energy are for all intents andpurposes unlimited (and to date, untapped), atover 3,000 times larger than current energy needs.The International Energy Agency’s (IEA) latestEnergy Technology Perspectives report shows inits BLUE Map scenario that it is possible to raiseenergy production by 2050 while simultaneouslyreducing coal, oil and gas consumption belowcurrent levels (Chart 32).Indeed, for an additional upfront cost ofUSD46trn in energy efficiency, renewables,nuclear and ‘clean coal’, fuel savings amounting32. A low-carbon future in 2050 will use less energy than ‘business as usual’ in 2030: world primary energy supply by fuel (BoE)2400022000200001800016000OtherBiomass and w asteHy droNuclearNatural gasOilCoal140001200010000800060004000200002007 Baseline 2030 Baseline 2050 BLUE Map 2050Source: IEA, Energy Technology Perspectives 201025