Transcript OECD Perspectives and Work on Green Growth: A Brief Overview

OECD Perspectives and Work on Green
Growth: A Brief Overview
Angela Bularga
Principal Administrator, EAP Task Force Secretariat
UNEP/MAP 14th Meeting of the
MCSD, 30 May - 1 June 2011
The OECD Green Growth Strategy
• Requested by Ministers of Finance, Economy and Trade, at the 2009 OECD
Ministerial Council Meeting (MCM)
• Multi-disciplinary inter-governmental process, involving 25 OECD
Committees
• Key deliverables for the 2011 MCM:
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Synthesis Report: Towards Green Growth – sets the analytical framework for
developing green growth strategies
– Toolkit: Tools for Delivering on Green Growth
– Communication by the “Freedom of Investment Roundtable”
Indicators Report: Towards Green Growth: Measuring Progress – OECD
Indicators
• Thereafter, integrated into OECD work
The OECD Perspective on Green Growth
in a Nutshell
Green growth means fostering economic growth and development while
ensuring that natural assets continue to provide the resources and
environmental services on which our well-being relies. It catalyses
investment and innovation which will underpin sustained growth and give
rise to new economic opportunities.
• Green Growth requires effective environmental and cross-cutting policies
• Green Growth and Sustainable Development
– SD is an important antecedent for GG; GG does not replace it.
– GG helps operationalise SD: policies to achieve concrete, measurable progress
– GG is narrower, but pays attention to social issues and equity concerns as a result of GG
Dividends from green growth
• Dividends for development
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Enhanced productivity
Spurred (eco-)innovation
New markets and job opportunities
Water and energy security
Higher investor confidence
Economic diversification
Increased stability of prices for natural resources
Reduced costs of environmental degradation
• Fiscal revenue – to be treated with care
• Reduced risks of negative shocks to economic growth and security
in a trans-boundary context
– arising from, e.g., resource scarcities or imbalances in ecosystems
Complementarities between green growth
and poverty reduction
• Green growth can help drive progress towards the MDGs by:
– Bringing more efficient infrastructure to people
– Underpinning sustained long-term growth, e.g. by promoting the use of
efficient technologies
– Alleviating public health impacts associated with environmental pollution
– Minimizing the risks of a legacy of costly environmental degradation as
development proceeds
• Green growth can preserve the countries’ natural capital by improving
the use of natural assets (including ecosystems)
– In low-income countries, natural capital comprises, in average, 25% of total
per capita wealth - as compared to 2% in OECD countries
The essentials of green growth policies
• A comprehensive policy toolkit including, for instance:
– Instruments to price pollution and natural resource use
– Mechanisms for using subsidies more effectively
• Shaping good incentives
• Removing and reforming perverse subsidies which encourage pollution or overextraction of resources and place a drain on the public purse – with due consideration
to social and competitiveness impacts
– Effective regulatory requirements and information-based instruments
• A larger focus with policies that address education and employment,
innovation, trade, investment, as well as territorial planning and
infrastructure development
• Access to finance, particularly in lower-income countries
• Better institutional frameworks and international cooperation
• Full understanding of distributional effects and impacts on competitiveness
• Need for a tailored approach: policies will differ across countries according
to local environmental and economic conditions, institutional settings and
stages of development
Institutional capacity to implement reforms
• Integrate green growth objectives into broader economic policymaking and
development planning, e.g.
– formal national level planning processes/ national plans
– public financial management (especially the budget process)
– strategies for key economic sectors, including at the sub-national level
• Building capacity to improve the governance and oversight of natural
assets and to enforce policies, i.e. cooperation with stakeholders
• Finance, economic and environmental agencies need to play a leading role
• Effective governance/coordination across different levels of government
The importance of pricing: Water Conservation
(% ownership against water fee structure)
Removing fossil fuel subsidies can reduce GHG
emissions, public spending … and grow the economy
5%
% change in GHG emissions w.r.t BAU: phasing-out of fossil fuel subsidies
subsidies in 37 countries; caps on
emissions in other countries
2050
0%
% deviation from baseline
-5%
-10%
10% less global
emissions
-15%
-20%
-25%
+ increased economic efficiency for
countries implementing the reforms - up to
4% real income gains in certain countries
-30%
-35%
World
Japan
EU27 plus EFTA
Brazil
United States
Canada
Australia and
New Zealand
Rest of the World
China
India
Non-EU East Europe (1)
Russia
Oil-exporting
countries (2)
-40%
Source: OECD ENV-Linkages, based on IEA subsidies data.
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Green taxes may serve fiscal objectives
Environmental-related taxes (revenues as % of GDP)
Includes: taxes on energy, CO2, vehicles and pollutants;
Excludes: royalties and taxes on natural resource rents
Source: OECD
International co-operation for green growth
• Strengthened arrangements for managing access to global public goods,
especially in biodiversity and climate
• More concerted approaches to accelerate technology development and
diffusion:
– building research capacity in developing countries
– targeted, time-bound financing mechanisms, e.g. loan guarantees and
insurance mechanisms, other forms of risk sharing
– stable, predictable economic and environmental policy
• Increased efforts to boost global trade and investment flows  to help
underpin sustained growth and diffusion of green technologies
• Address concerns about green protectionism
• Official Development Assistance could help align incentives across
countries with different initial conditions
– Ensure policy coherence for development
Selected elements of future OECD work
Timeline
Deliverables
2011 MCM
 Green Growth Strategy Synthesis Report
 Green Growth Indicators Report
2011/2012
 A Green Growth Strategy for Food and Agriculture (preliminary report)
 Joint IEA/OECD Green Growth Study for Energy
 Green growth monitoring work: green growth indicators, further green growth
chapters in Economic Surveys and Environmental Performance Reviews
 Green growth reports for emerging economies and developing countries
 Monitoring green investment protectionism concerns
 Report on green innovation
 Green growth and biodiversity
 Green Cities Programme
 Project on green financing
 Green growth and water
 Environmental regulations and growth
 Green fiscal revenue
 Job potential of a shift towards a low-carbon economy
Regional Programmes: Relevant OECD Work
in Eastern Europe, Caucasus, and Central Asia
• OECD has provided assistance to the EECCA region in support to countries’
“environmental reconstruction” and policy reforms as part of their
transition to market economy – under the umbrella of the EAP Task Force
• Almost 20 years of cooperation, with an evolving focus of work
• A strong record of real changes, induced in policies and legal frameworks
• Various tools developed in support to reforms
• Demonstration projects and National Policy Dialogues
• Demand for future work on green growth (2012-2015), including
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Integration of fiscal and environmental policies
Economics of water management
Providing incentives for the private sector’s green investment
Financing for climate change adaptation
Strengthening governance and institutional capacity
• Mandate to be renewed at the “Environment for Europe” Ministerial
Conference in September 2011
Cooperation with MENA countries: Initiative on
Governance and Investment for Development
• A regional effort, initiated and led by countries in the Middle East and
North Africa
• Promotes broad reforms to enhance the investment climate, modernise
governance structures and operations, strengthen regional and
international partnerships, and promote sustainable economic growth
throughout the MENA region
• Consists of two pillars:
– Good Governance for Development (GfD) in the Arab Countries Initiative –
aimed at modernising public governance structures and processes (a new
focus group on territorial development and green growth)
– Investment Programme – aimed at improving investment climate and policies
• Complemented by work in other areas, such as education or water
management
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