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2046

Japan’s population falls below 100 million

For most of the 20th century, Japan experienced high population growth. The post-war “miracle” saw its booming economy catapulted into second place behind only the USA by the 1980s. This period of rapid expansion ended with the bursting of the asset price bubble in 1991 and was followed by the “Lost Decade”, which persisted into the 21st century. Japan experienced stagnation both financially and demographically.

By 2010, the country’s population had peaked at 128 million.* From this point onward it would undergo a long, slow decline.* This net loss was caused by falling birth rates and almost no net immigration, despite the highest life expectancy in the world at 84.6 years of age. The rising costs of childbirth and child-raising, later average age of marriage, the increasing number of unmarried people and greater numbers of women in the workforce were all contributing factors. Japan’s “total fertility rate” (defined as the average number of children born to a woman over her lifetime) was now 1.43, far below the 2.07 replacement-level fertility needed to sustain a country in the long term. In some isolated rural areas, this trend was so damaging that entire communities were already disappearing.

The shrinking segment of productive workers aged 15 to 64 began to seriously impact on Japan’s GDP, affecting pensions and social welfare in particular. As the overall standard of living fell, calls were made for radical policies, but the low birth rate could not be fundamentally reversed. By the 2040s the population was falling by over a million each year. By 2046, it has dropped below 100 million,* a level last seen in the 1960s. This trend will continue for the rest of the century, with Japan struggling to achieve a “managed decline” as it deals with the inevitability of its situation and its waning influence on the world stage. Among the solutions being introduced is greater use of robots to keep society running. Japan’s love for and experience of robotics (perhaps more than any other country) and its already well-established industry is helpful in this regard, mitigating some of the impacts it would otherwise have felt.

 

 

 

The UK state pension age has risen to 70

Due to increases in life expectancy, and unsustainable levels of age-related spending, the UK’s state pension age has risen from 65 in 2012, to 70 now.* This provides a net benefit to the public finances of around 0.7% of GDP.

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2046 uk state pension age 70

 

 

Angola is declared free of landmines

For most of the late 20th century, conflict ravaged the west African nation of Angola. The War of Independence (1961–1974) resulted in tens of thousands of civilian and military deaths, before the granting of independence from Portugal in 1975. However, the Angolan Civil War immediately followed and would last from 1975 until 2002, with estimates of 800,000 killed and four million displaced. During this time, nearly 70,000 people became amputees as a result of landmines placed all over the country.

The mines continued to litter rural areas, long after the ending of the war, contributing to ongoing civilian casualties. Angola ranked among the most heavily mined countries in Africa and the world, with as many as 15 million devices having been placed by militant forces. Dozens of people continued to be killed or seriously injured each year, while vast areas of countryside remained off-limits.

Diana, Princess of Wales, had raised awareness of the landmines during a visit to Angola shortly before her death in 1997. She was influential in the signing of the Ottawa Treaty, which created an international ban on the use of anti-personnel landmines that same year.

Demining of Angola continued in the early 21st century. However, the pace of removal proved to be slow, due to lack of government funding, and despite contributions from Britain and other foreign nations. Even as late as 2020, more than 1,200 minefields remained active, covering a total area of more than 100,000,000 square metres.* Based on the rate of demining, it was estimated to take until the mid-2040s for complete clearance.* By 2046, this landmark is finally reached, with Angola declared free of landmines.*

Safe access to land and resources – such as fields, forests, water sources, and metal/mineral deposits – has now greatly improved the country’s social and economic prospects, in a way similar to Mozambique, which gained as much as 25% in GDP per capita as a result of mine clearance.*

 

angola minefields map 2020 2046
Source: IMSMA National Database

 

 

Carbon pricing is ubiquitous worldwide

By the mid-2040s, carbon pricing initiatives have been implemented by practically every government around the world, via policies such as carbon taxes and/or a requirement to buy permits to emit, generally known as cap-and-trade. This has finally solved the economic problem of CO2 and other known greenhouse gases being negative externalities – detrimental products lacking any market mechanism responsive to the costs of their emission.

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In the 1990s, only a handful of countries had these measures in place, all of them in Europe. The number grew steadily in the early 21st century amid mounting concern over environmental impacts. International agreements, such as the Paris climate accord of 2016, gave added impetus.

There were, of course, a number of setbacks along the way. In Australia, for example, the Labour Party led by Julia Gillard implemented a carbon tax from 2012-2014 (priced at $23-24/tonne). This was later revoked by the Liberal Party, led by Tony Abbott, who insisted that coal was “good for humanity” and would be the “world’s main energy source for decades to come.” In the USA, meanwhile, President Trump announced his intention to withdraw from the Paris Agreement and introduced a slew of policies aimed at rolling back regulations.

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Momentum continued to build, however, as the impacts of climate change became more and more obvious. Alongside this, a demographic shift was undermining the Baby Boomer generation, who had supported many traditional conservative policies. Their influence was waning in favour of Generation X and the Millennials, who preferred stronger action on the environment. Not only were national governments taking steps, but smaller regions and individual cities were introducing policies too. As the years rolled by, public opinion showed increasing support for carbon taxes and emissions trading. Studies were finding that a price on carbon – combined with tax cuts for businesses, and rebates to low-income families most affected by the scheme(s) – could be an effective and bipartisan way to curb emissions of greenhouse gases.*

By the early 2020s, China had introduced a national cap-and-trade scheme for its power sector, boosting the share of global emissions with a pricing system in place from 15% to around 20%.*

 

carbon pricing future trend 2020 2030 2040 2050

 

As progress in carbon (and other greenhouse gas) pricing continued, a substantial economic shock lay on the horizon. The installed capacity of renewables like solar and wind power had increased exponentially,** thanks to dramatic improvements in cost and efficiency, alongside major advances in batteries, smart grids and other low carbon technology. When combined with a rapid uptake of electric vehicles (and the outright phasing out of traditional internal combustion engines by many countries),* fossil fuel companies now had trillions of dollars’ worth of stranded assets.

A sudden drop in the value of fossil fuels – and the bursting of this “carbon bubble” – became apparent in the early 2030s,* by which time, around 50% of worldwide greenhouse gas emissions had a pricing mechanism in place. While many investors had recognised the scale, speed and inevitability of this energy transition and taken steps to limit their exposure, a significant amount of economic disruption nevertheless occurred. The losses, centred on the U.S. and Canada, were greater than those seen during the financial crisis of 2008.*

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By the 2040s, the world has largely recovered from this earlier shock – although new economic risks and uncertainties abound, with technology and society now changing faster than ever before, alongside a frantic race to ameliorate the effects of climate change.

 

 

 

 

References

1 Can Japan Boost Its Low Birthrate?,
Nippon:
http://www.nippon.com/en/features/h00089/
Accessed 4th January 2015.

2 Concern as Japan’s 2014 birth rate falls to record low,
BBC:
http://www.bbc.co.uk/news/world-asia-30653825
Accessed 4th January 2015.

3 Table 1.4 Projected Population, Population Growth, Sex Ratio, and Population Density: 2010-60
Population Statistics of Japan 2012
,
National Institute of Population and Social Security Research:
http://www.ipss.go.jp/p-info/e/psj2012/PSJ2012.asp
Accessed 4th January 2015.

4 PwC wants pension age set to 70 by 2046,
Pensions Insight:
http://www.pensions-insight.co.uk/news/markets/pwc-wants-pension-age-set-to-70-by-2046/1464563.article
Accessed 22nd February 2018.

5 Angola,
MAG:
https://www.maginternational.org/what-we-do/where-we-work/angola/
Accessed 15th November 2020.

6 “…at current rates, Angola won’t achieve its mine-free vision until 2046.”
See Angola pledges $60m to fund landmine clearance in national parks,
Mongabay:
https://news.mongabay.com/2019/06/angola-pledges-60m-to-fund-landmine-clearance-in-national-parks/
Accessed 15th November 2020.

7 “At the current rate of funding, Angola won’t be land-mine-free until 2046.” […] “There is still a huge amount to do. The fact that funding has been reduced by 90% over the last decade is pretty shocking.”
See Princess Diana walked through a minefield 22 years ago. Prince Harry is retracing her steps,
The Washington Post:
https://www.washingtonpost.com/world/africa/princess-diana-walked-through-landmines-22-years-ago…
Accessed 15th November 2020.

8 What are the economic effects of landmine clearance?,
VoxDev:
https://voxdev.org/topic/infrastructure-urbanisation/what-are-economic-effects-landmine-clearance
Accessed 15th November 2020.

9 Carbon taxes could make significant dent in climate change, study finds,
MIT:
http://news.mit.edu/2018/carbon-taxes-could-make-significant-dent-climate-change-0406
Accessed 18th June 2018.

10 State and Trends of Carbon Pricing 2018,
World Bank Group:
https://openknowledge.worldbank.org/handle/10986/29687
Accessed 18th June 2018.

11 Growth of photovoltaics,
Wikipedia:
https://en.wikipedia.org/wiki/Growth_of_photovoltaics

12 Wind power,
Wikipedia:
https://en.wikipedia.org/wiki/Wind_power
Accessed 18th June 2018.

13 India will make every new car electric by 2030,
Future Timeline Blog:
https://www.futuretimeline.net/blog/2017/05/4.htm
Accessed 18th June 2018.

14 ‘Carbon bubble’ could spark global financial crisis, study warns,
The Guardian:
https://www.theguardian.com/environment/2018/jun/04/carbon-bubble-could-spark-global-financial-crisis-study-warns
Accessed 18th June 2018.

15 Carbon ‘bubble’ could cost global economy trillions,
BBC News:
https://www.bbc.co.uk/news/science-environment-44357243
Accessed 18th June 2018.

 

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