Section 12.1: Global trends & need for Sustainability Management
Section 12.2: Vision 2050 – The new agenda for business
Since the start of the new millennium, significant strides have been made in achieving global sustainable development goals. In some instances, we’ve seen improvement such as decreasing poverty across all the world’s regions and consistent economic growth in developing and emerging markets.
Even so, for global development to be sustainable, we need to consider a number of other challenges and trends. For example, economic and social progress has been uneven, the global fuel, food and financial crises have revealed how fragile our economic systems are, as have the growing scarcity and rising cost of natural capital by accelerating environmental degradation.
These challenges to sustainable development are driven by broad underlying economic, social, technological, demographic and environmental megatrends. Megatrends reflect major shifts in economic, social and environmental conditions that influence and reinforce each other that alter how society works and pose significant challenges for sustainability.
Explore the sections below for an insight into some of the metrics which influence these megatrends.
Rural to Urban Migration
Globally, more people live in urban areas than in rural areas. In 2007, for the first time in history, the global urban population exceeded the global rural population. The world population has remained predominantly urban thereafter. The planet has gone through a process of rapid urbanization over the past six decades
In 1950, more than two-thirds (70 per cent) of people worldwide lived in rural settlements and less than one-third (30 per cent) in urban settlements. In 2014, 54 per cent of the world’s population is urban. The urban population is expected to continue to grow, so that by 2050, the world will be one-third rural (34 per cent) and two-thirds urban (66 per cent).
Megacities are notable for their size and concentration of economic activity, but are home to only about one in eight of the world’s urban dwellers. In 1990 there were 10 cities with more than 10 million inhabitants. These “megacities” were home to 153 million people, representing less than 7 per cent of the global urban population. Today, the number of megacities has nearly tripled to 28, the population they contain has grown to 453 million, and these agglomerations now account for 12 per cent of the world’s urban dwellers.
Global Economic Powers
The figure above illustrates how the relative sizes of different economies are projected to change over time. It shows that in 2014, the Emerging Seven (E7) economies have already overtaken the Group of Seven (G7) economies at PPP exchange rates. This is a measure of the volume of goods and services produced, after correcting for price level variations across countries. Based on total GDP at market exchange rates (MER), however, the G7 economies are still around 80% larger than the E7 economies. This reflects the much lower average price levels present in emerging economies rather than in established economies at current market exchange rates.
Much of the growth taking place within the E7 stems from China and India. China, India and the US are likely to be by far the three largest economies in the world by 2050. According to the latest economic data, China has already overtaken the US in PPP terms. Models also suggest that China could overtake the US before 2030 in MER terms. It is expected that this shift in economic power that has been witnessed in recent decades will continue.
Growing Middle Class
The shift in global goods production towards Asia is well documented. Global consumer demand has so far been concentrated in the rich economies of the OECD, but this is expected to shift towards Asia as its countries become more developed. At present, research shows that Asia accounts for less than one-quarter of today’s middle class. By 2020, that share could double. More than half the world’s middle class could be in Asia and Asian consumers could account for over 40 per cent of global middle class consumption. This is because a large mass of Asian households have incomes today that position them just below the global middle class threshold and so increasingly large numbers of Asians are expected to become middle class in the next ten years.
Greenhouse Gas Emissions
Research projections expect GHG emissions will increase by another 50% by 2050, primarily driven by a projected 70% growth in CO2 emissions from energy use. Transport emissions are projected to double, due to a strong increase in demand for cars in developing countries. Historically, OECD economies have been responsible for most of the emissions. In the coming decades, increasing emissions will also be caused by high economic growth in some of the major emerging economies.
CO2 emissions are projected to remain the largest contributor to global GHG emissions, driven by economic growth based on fossil fuel use in the energy and industrial sectors. The International Energy Agency (IEA) estimates that unless policies prematurely close existing facilities, 80% of projected 2020 emissions from the power sector are already locked in.
Transport emissions are projected to double between 2010 and 2050. This is due to a strong increase in demand for cars in developing countries, and growth in aviation. However, CO2 emissions from land use, land-use change and forestry, driven in the last 20 years by the rapid conversion of forests to grassland and cropland in tropical regions, are expected to decline over time and become a net sink of emissions in the 2040- 2050 time-frame.
Environmental Degradation and Service Loss
Biodiversity loss is projected to continue, especially in Asia, Europe and Southern Africa. Globally, terrestrial biodiversity is projected to decrease by a further 10% by 2050. Climate change is projected to become the fastest growing driver of biodiversity loss by 2050. Declining biodiversity threatens human welfare, especially for the rural poor and indigenous communities whose livelihoods often depend directly on biodiversity and ecosystems services. The aggregate loss of biodiversity and ecosystem service benefits, is estimated to be between USD 2 and 5 trillion per year, according to the Economics of Ecosystems and Biodiversity (TEEB) study.
Freshwater availability will be further strained in many regions, with 2.3 billion more people than today (over 40% of the global population) projected to be living in river basins experiencing severe water stress. Global water demand is projected to increase by some 55%, due to growing demand from manufacturing (+400%), thermal electricity generation (+140%) and domestic use (+130%).
Groundwater depletion may become the greatest threat to agriculture and urban water supplies in several regions. Nutrient pollution from urban wastewater and agriculture is projected to worsen in most regions, intensifying eutrophication and damaging aquatic biodiversity. Globally more than 240 million people are expected to be without access to improved water sources by 2050.
Human Development and its Ecological Footprint
In spite of the fact that over $150 billion is spent annually on global sustainable development, few studies have been done to see if we have made any progress in increasing human well-being while minimizing our impact on the natural environment.
The HDI is an indicator of human development that measures a country’s achievements in the areas of longevity, welfare (social and environmental), education and income. The UNDP’s Human Development Index (HDI) measures how much human wellbeing each country generates, against its level of natural resource demand (ecological footprint). The ecological footprint is a measure of a population’s demand on nature and can be compared to the available biocapacity.
Sustainable human development depends on ensuring and achieving well-being for all people, within the resource budget available over the long term. Measuring these two variables reveals that very few countries come close to achieving sustainable development despite growing adoption of the Sustainable Development goals that strive to increase well-being without sacrificing the environment.
At current levels, our planet has only 1.7 global hectares (gha) of biologically productive space per person. To achieve global sustainable development, humanity’s demand (at current population levels) needs to fall below the average of 1.7 gha/person. Through this, we are increasingly reminded that human welfare is critically dependent on healthy ecological assets.
The graph exemplifies the challenge of creating a high level of human well-being without depleting the planet’s/ region’s ecological resource base. The lower right quadrant represents the goal of sustainable development. Only a few nations have achieved entering and staying in this quadrant.