The process of economic and social development depends both on the ability of the current lead countries in productivity to maintain their technological and institutional creativity, and on the ability of other countries to adopt leading-edge technologies and institutions or to develop their own. The crucial issues of "how much" and "what kind" of productivity growth can be addressed only by describing alternative scenarios of future development. To develop alternative scenarios it is necessary to recall the important qualitative relationship between demographic transition and social and economic development. Causality links could be in either direction, but the importance of the relationship is recognized in both theoretical and empirical studies. Hence, as summarized in Section 3.2, this relationship should be incorporated into the SRES scenarios. Scenarios of accelerated rates of economic and social development should therefore be the scenarios with an accelerated demographic transition. This corresponds to a linking of high per capita development with comparatively low population levels.
There is a need to explore in particular pathways that close the development gap (see Parikh, 1992; Alcamo et al., 1995). As the likelihood of zero or even negative productivity growth in the developed countries is low, closure of the development gap requires accelerated rates of productivity growth and the need to overcome or avoid setbacks in per capita income growth in many developing countries. Scenarios that explore this possibility will necessarily extend beyond the range of futures spanned by the IS92 scenarios, as well as beyond the range of the majority of the "conventional wisdom" scenario literature on the future of developing countries.
As a major part of the needed infrastructure to meet development needs still has to be built, the spectrum of future options is considerably wider in developing than in industrial countries. For instance, the technical possibilities for low emission futures in the developing countries are many. The extent of the spectrum of future options depends on the changes discussed in Sections 3.2 and 3.3, but also on the outcome of crucial issues. These include political power structure, national governance and institutional structure; income distribution; cultural attitudes and consumption patterns (diets, housing, etc.), development of and access to modern technologies (energy, production, distribution, etc.), and the geographic distribution of activities (land use, urban settlement, transportation needs, etc.).
Particular sets of technological and behavioral options can be clustered into alternative, internally consistent packages to represent different choices over time and so define different development paths for any economy. Such clusters can give rise to self-reinforcing loops between technical choice, consumer demand, and geographic distribution, which create "lock-in" effects and foreclosures of options in technology and socio-institutional innovations. The time-dependent nature of these choices gives rise to bifurcations and irreversibilities in which the shift from one development path to another entails important economic and political costs.
Globalization of markets, technologies, and information networks may help accelerate productivity growth in the future. However, both economic and social losers could result from the globalization process. The financial instability during 1998 has cast further doubt on the inevitability of global convergence as a standard model of political economy. Hence, a further important dimension of uncertainty to be explored in the scenarios is the degree of globalization or regionalization in economic, social, and technological development.
The various perspectives on economic history discussed in Section 3.3.4 reveal several possible options for the future:
As a result, scenarios can span from low dematerialization to high dematerialization futures associated with a wide range of income levels. In the former, the shift toward more value-added products in industry would be compensated by rising labor productivity and hence lower product costs. Economic production remains material oriented. It may be a world with huge underground cities, air-conditioned tourist resort areas with indoor beaches, a significant fraction of people in low-density regions may fly their own airplanes, and robots may do housework in most homes. In the latter, much of the money flow would be associated with exchange of information and services. Industrial value added would be, to a large extent, generated from R&D and know-how, and less from increasing productivity in traditional industries. Educational, childcare, and medical services would make up a large part of personal expenditures. Already, all kinds of artistic and handicraft work have become part of the formal monetary economy, partly because of the booming world tourist industry. Much "economic growth" may revolve around the (re)distribution of scarce, positional goods such as space and valuable artworks.
Therefore, the task of future scenario development entails more than just the adoption of alternative quantitative assumptions. The overall context within which alternative assumptions on productivity growth or energy and materials intensity take place needs to be made explicit. This is simply because many key influencing factors (e.g., institutions) cannot be assessed quantitatively, or the relationship between factors is known only qualitatively. The development of alternative qualitative scenario "storylines" (see Chapter 4) is therefore an important advance over previous IPCC scenario methodologies.
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