PriceWaterhouseCoopers (PwC) is an international accounting and management consultancy that has published a series of reports on what the world might look like, economically, in 2050. They make interesting reading.

According to their latest updates, Britain and other developed countries may spend the next four decades in the slow lane of the global economy unless their entrepreneurs can break into the fast-growing markets of Asia and Latin America. The consulting group believes that if developed economies continue to rely too heavily on customers in Europe and North America, they will gradually slide down the international economic rankings by 2050. By then, even the mighty US will have lost its crown as the world’s largest economy leader, not only China but also will have been surpassed by India. The UK will have plummeted from the 7th to the 10th largest, while Brazil will have gone from 9th to 4th. Mexico and Indonesia will also have claimed a place in the top 10.

UK political leaders have led high-profile trade missions to Asia in recent years in an attempt to emulate Germany’s success in entering the markets of major emerging economies. UK businesses are being encouraged to take advantage of the falling value of the pound to take advantage of the opportunities brought by rapid industrialization and increasing consumer purchasing power in China and India in particular. But John Hawksworth, PwC’s chief economist, says there is little evidence that they are succeeding, despite the fact that major emerging economies have quickly recovered from the deep recession triggered by the collapse of Western banks in the 2008 financial crisis. and they are currently growing three to four times faster than the US, Japan or the major eurozone nations. The latest forecasts from the International Monetary Fund suggest that China will grow 10.5% this year, India 9.7%, Brazil 7.5% and Russia 4.0%; however, the four economies combined account for 7% of UK exports, the same as for the Irish crisis.

Britain suffered its longest and deepest recession of the post-World War II era in 2008 and 2009, but is still ranked as the sixth largest economy in the world. International comparisons between economies can be made using market exchange rates or “purchasing power parity”, which takes into account the relative purchasing power of the currency in its home market. Using either measure, China will be the world’s largest economy by mid-century, the report says.

If we look beyond the aggregated numbers to see what it could mean for individual people, it paints a very different picture. Using the GDP data from the report and combining it with the 2008 edition of the United Nations World Population Prospects, it is possible to calculate GDP per capita in purchasing power parity for major countries for 2010 and 2050. This drastically changes the way in which the top 20 economies look calm. . Australia, which would not rank in the top 10 for size of the total economy, emerges as the second richest country, a position it manages to maintain by 2050. The United Kingdom, which is the fourth richest per capita, falls to sixth while that the progress of developing countries is less spectacular with China moving up just one place from 18th to 17th, although South Korea jumps from 10th to 4th.

The most dramatic changes take place in the distribution of GDP per capita with the number of countries at half or less of the US per capita number falling from 11 to 7 with Vietnam’s relative wealth per capita jumping from 7 to 38 % of the US level while China goes from 15 to 45%. This narrowing of the distribution of wealth gives some support to the idea that economic growth is good for everyone, but somehow I suspect that some of these projections will come true.

The tendency of humans is to predict the future in the same way as the past but with increasing or decreasing influences of predictable impacts, for example, large numbers of women entering the workforce. Thus, PwC looks at the growth of the working-age labor force, the average education levels of the adult population, the growth of the stock of physical capital, and the growth of total factor productivity, all of which are quite current economic levers. standard. Much of human behavior (and therefore economies) is driven by what is perceived as “normal”, so the current paradigm of energy-intensive economies with country specialization and free flows of international capital is probably the underlying thought. What is considered “normal”, however, is more difficult to predict; just a year after Roger Bannister achieved the 4-minute “impossible” mile, three men ran less than 4 minutes in the same race, before Milgram’s electric shock experiments, he asked his colleagues what percentage they thought he would manage the “fatal” discharge level and predicted 1% when in fact two-thirds went all the way.

Over the next 40 years, the idea of ​​what “normal” conditions are will be challenged in the extreme. The current course of carbon emissions means that we will be well on our way to a 4 degree Celsius increase in average temperatures, a level that Rachel Warren points out in a Royal Society article “The role of interactions in a world that implements solutions.” adaptation and mitigation. to climate change”, means,

In such a 4 degree world, the limits of human adaptation are likely to be exceeded in many parts of the world, while the limits of adaptation of natural systems would be greatly exceeded throughout the world. Therefore, the ecosystem services on which human livelihoods depend would not be preserved.

In a companion document to their report, PwC has a report titled “Can rapid global growth be reconciled with the move to a low carbon economy?” which envisions a situation in which global warming is avoided by reducing current levels of emissions to about half their current level through increased energy use efficiency, increased use of renewable energy, and capture and carbon storage, and a reduction in deforestation. The cost of their projections is just one year of global GDP growth, meaning the world reaches the same level of GDP in 2051 that might otherwise have occurred in 2050. What they have not calculated is how much wealth destruction, such as The estimated cost of $13 billion in damage from the Australian floods of early 2011 will occur if no action is taken.

A 50% reduction is not as far as climate scientists say is currently needed, but this report suggests that the world has a bright future. Putting that at risk through further prevarication over significant global action borders on criminal activity. Solutions to climate change are available and eminently affordable; it only takes the political will to implement them.

You can download a free PDF of the PwC report from their website.