Transcript Agreement with attitudinal statements including on the role of

How the OECD is thinking about Green Growth
Prague, 16th May 2013
Simon Upton
Director
OECD Environment Directorate
For more information, see
www.oecd.org/greengrowth
Intensity of GHG emissions and GDP
(Why just making steady progress isn’t enough…)
Emissions
Emission intensity
intensity
(kg CO2e / 2010 USD PPP)
RoW
1.0
RoW GHG
emissions
13 GtCO2e
0.9
BRIICS GHG
emissions
19 GtCO2e
BRIICS 0.8
0.7
WORLD
World GHG
emissions
48 GtCO2e
0.6
0.5
OECD
OECD GHG
emissions
16 GtCO2e RoW GHG
emissions
22 GtCO2e
0.4
0.3
BRIICS GHG
emissions
39 GtCO2e
World GHG
emissions
81 GtCO2e
OECD GHG
emissions
19 GtCO2e
0.2
0.1
0.0
0
50 000
OECD
RoW
BRIICS
100 000
150 000
200 000
250 000
300 000
350 000
WORLD
GDP (thousand
GDPmillions
(billionsUSD,
20102010,
USD PPP)
Source: OECD (2012), OECD Environmental Outlook to 2050, Baseline projection using ENV-Linkages model
What policies do we need?
• Make pollution more costly
3
Revenues from environmentally related taxes
In per cent of GDP, 2011
5
4
% of GDP
3
Other
Motor vehicles
2
Energy
1
0
-1
* 2010 figures
** 2009 figure
Average tax rates on CO2 and carbon efficiency in
OECD countries
Implicit tax rate per tonne of CO2
Sweden
Switzerland
Czech
Republic
Estonia
USA
Tonnes of carbon per PPP equivalised unit of GDP (EUR)
Source: OECD (2013) Taxing Energy Use - A Graphical Analysis
50
150
100
0
250 000
500 000
750 000
Tax rate expressed in CZK per GJ
0
1 000 000
[ETS-A] = all subject to the ETS
[ETS-P] = partially subject to the ETS
Source: OECD (2013) Taxing Energy Use - A Graphical Analysis
Biofuels & waste [ETS-A]
Diesel & fuel oil [ETS-A]
Nuclear (heat)
Natural gas [ETS-A]
HEATING
& PROCESS USE
HEATING & PROCESS USE
Renewables [ETS-A]
Coal [ETS-A]
Other gases [ETS-A]
Biofuels & waste (all use) [ETS-P]
Coal (heat) [ETS-P]
Coal (all use except heat) [ETS-P]
200
Other gases (all use) [ETS-P]
TRANSPORT
TRANSPORT
Natural gas (res.)
Tax
Natural gas (all use except res.) [ETS-P]
250
Rail fuels
Aviation & marine fuels (domestic)
Diesel (ind., energy transf.) [ETS-P]
300
natural gas (road, pipeline)
LPG &(ag.)
Diesel
Other oil products (all use) [ETS-P]
400
Diesel (road)
Gasoline (road)
Taxation of energy in Czech Republic on an energy
content basis
Fuel tax credit or tax expenditure
CZE
Tax rate expressed in EUR per GJ
ELECTRICITY
ELECTRICITY
16
350
14
12
10
8
6
4
2
1 250 000
0
Tax base – energy use – expressed in TJ
Taxation of energy in Czech Republic on a carbon
emission basis
Fuel tax credit or tax expenditure
Tax
Tax rate expressed in EUR per tonne of CO2
Tax rate expressed in CZK per tonne of CO2
6 000
CZE
ж Average 2010-11 ETS price
TRANSPORT
TRANSPORT
HEATINGHEATING
& PROCESS
USE
& PROCESS USE
ELECTRICITY
ELECTRICITY
200
Diesel & fuel oil [ETS-A]
Natural gas [ETS-A]
Biofuels & waste [ETS-A]
Coal [ETS-A]
Other gases [ETS-A]
Biofuels & waste (all use) [ETS-P]
Coal (heat) [ETS-P]
Coal (all use except heat) [ETS-P]
Other gases (all use) [ETS-P]
Gasoline (road)
1 000
Diesel (road)
2 000
150
100
Natural gas (res.)
3 000
Natural gas (all use except res.) [ETS-P]
4 000
natural gas (road, pipeline)
LPG &(ag.)
Diesel
Other oil products (all use) [ETS-P]
fuels& marine fuels (domestic)
Rail
Aviation
Diesel (ind., energy transf.) [ETS-P]
5 000
0
50
0
0
[ETS-A] = all subject to the ETS
[ETS-P] = partially subject to the ETS
25 000
50 000
75 000
100 000
Tax base – energy use – expressed in thousands of tonnes of CO2
Source: OECD (2013) Taxing Energy Use - A Graphical Analysis
2
0
4
6
200 000
400 000
600 000
0
800 000
[ETS-A] = all subject to the ETS
[ETS-P] = partially subject to the ETS
Source: OECD (2013) Taxing Energy Use - A Graphical Analysis
Biomass & waste [ETS-A]
Coal [ETS-A]
Natural gas [ETS-A]
Oil products [ETS-A]
Renewables (res., comm., ind., ag.)
HEATING & PROCESS
USE USE
HEATING & PROCESS
Renewables
Biomass & waste (all uses) [ETS-A]
Coal, oil products & renewables (heat) [ETS-A]
Coal (energy transf.) [ETS-A]
Coal & coke (res., ind.) [ETS-P]
Natural gas (heat) [ETS-A]
Natural gas (energy transf.) [ETS-A]
Natural gas (res., comm.)
8
Natural gas (ind., ag.) [ETS-P]
10
All oil products (energy transf.) [ETS-A]
12
LPG (res., comm., ind., ag.) [ETS-P]
Tax rate expressed in EUR per GJ
18
TRANSPORT
TRANSPORT
Fuel oil (res., comm., ind., ag.) [ETS-P]
14
Rail, aviation & marine fuels (domestic)
LPG & natural gas
Tax
Diesel (res., comm.)
Biofuels (road)
Diesel (ind.) [ETS-P]
Diesel (ag.)
Diesel (road)
Gasoline (road)
Taxation of energy in Austria on energy content basis
Fuel tax credit or tax expenditure
AUT
Tax rate expressed in EUR per GJ
18
ELECTRICITY
ELECTRICITY
16
16
14
12
10
8
6
4
2
1 000 000
0
Tax base – energy use – expressed in TJ
0
[ETS-A] = all subject to the ETS
[ETS-P] = partially subject to the ETS
100
50
25 000
HEATING
& PROCESS
HEATING
& PROCESS USEUSE
0
50 000
Source: OECD (2013) Taxing Energy Use - A Graphical Analysis
Biomass & waste [ETS-A]
Oil products [ETS-A]
Tax rate expressed in EUR per tonne of CO2
Coal [ETS-A]
Coal, oil products & renewables (heat) [ETS-A]
Fuel tax credit or tax expenditure
Natural gas [ETS-A]
Biomass & waste (all uses) [ETS-A]
Coal (energy transf.) [ETS-A]
Coal & coke (res., ind.) [ETS-P]
Natural gas (heat) [ETS-A]
Natural gas (energy transf.) [ETS-A]
LPG (res., comm., ind., ag.) [ETS-P]
TRANSPORT
TRANSPORT
Natural gas (res., comm.)
Natural gas (ind., ag.) [ETS-P]
All oil products (energy transf.) [ETS-A]
Fuel oil (res., comm., ind., ag.) [ETS-P]
Tax
Diesel (res., comm.)
150
Rail, aviation & marine fuels (domestic)
LPG & natural gas
200
Biofuels (road)
Diesel (ind.) [ETS-P]
Diesel (ag.)
Diesel (road)
Gasoline (road)
Taxation of energy in Austria on a carbon emission
basis
ж Average 2010-11 ETS price
AUT
Tax rate expressed in EUR per tonne of CO2
ELECTRICITY
ELECTRICITY
200
150
100
50
75 000
0
Tax base – energy use – expressed in thousands of tonnes of CO2
Share of CO2 emissions from energy taxed and
implicit rates
Effective tax rate (EUR per tonne CO2)
450
SWE
400
TUR
NOR
350
300
250
CZE
200
150
100
50
USA
0
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Share of carbon emissions, %
Source: OECD (2013) Taxing Energy Use - A Graphical Analysis
Challenges are so big that we can’t afford expensive
solutions
“Average effective carbon price" for the main policy
instruments used in the electricity
generation sector
800
$USD costs
per tonne of
CO2 abated
775
200
Simple Average
175.7
169
150
100
76.7
50
50.3
29.5
10.4
0
Feed-in tariff
Certificate trading Emissions trading Capital subsidies
scheme
scheme
-50
Source: OECD Effective Carbon Prices Analysis (forthcoming)
Regulation
Tax preferences
Environmental Outlook to 2050: What policies
do we need?
• Make pollution more costly
• Value and price the natural assets and ecosystem services
13
Sub-Saharan Africa – capital depletion
Forests & protected areas
% of GNI
Subsoil Assets
Pasture Land
Crop
Sub-Saharan Africa
Net
saving
7.6%
28% of
wealth
Natural Capital
Education
Produced Capital
+3.3%
Resource
depletion
-16.1%
Net Foreign Assets
Intangible Capital
-2,000
Pollution
-1.0%
2,000 4,000 6,000 8,000 10,000
USD 2005, per
capita
-6.2%
Adjusted net
savings
Source: World Bank Wealth of Nations
0
Norway – capital substitution
Norway
Savings rate
Education
Net
saving
26.2%
+6.0%
Wealth
Natural Capital
Produced Capital
Net Foreign Assets
Intangible Capital
1,000,000
Resource
depletion
800,000
-16.1%
Pollution
-0.1%
USD 280,000
per capita
600,000
400,000
16.2%
Adjusted
net
savings
OECD average, 6.8%
200,000
0
Norway
-200,000
USD 2005, per capita
% of GNI
Source: World Bank Wealth of Nations
OECD
The System of Environmental-Economic Accounting
(SEEA) – A framework for measuring interactions
between the environment and the economy
High level messages from UK NEA
synthesis report
Source: DEFRA
Monetised impacts 2000-2060 under
different scenarios – UK NEA
Source: DEFRA
Environmental Outlook to 2050: What policies
do we need?
• Make pollution more costly
• Value and price the natural assets and ecosystem services
• Remove environmentally harmful subsidies
19
Support to fossil fuels in OECD countries by
year and type of fuel (Millions of current USD)
$100,000
$80,000
$60,000
$40,000
$20,000
$0
2005
2006
2007
Coal
2008
Petroleum
2009
2010
2011
Natural Gas
Notes:
The above charts are based on an arithmetic sum of the individual support measures identified for all 34 OECD member countries. It
includes the value of tax relief measured under each jurisdiction’s benchmark tax treatment. The estimates do not take into account
interactions that may occur if multiple measures were to be removed at the same time. PSE = Producer Support Estimate; CSE =
Consumer Support Estimate; GSSE = General Services Support Estimate
Data source: OECD (2013), Inventory of Estimated Budgetary Support and Tax Expenditures for Fossil Fuels.
20
Support to fossil fuels in OECD countries by
year and indicator (Millions of current USD)
$100,000
$80,000
$60,000
$40,000
$20,000
$0
2005
2006
2007
PSE
2008
CSE
2009
2010
2011
GSSE
Notes:
The above charts are based on an arithmetic sum of the individual support measures identified for all 34 OECD member countries. It
includes the value of tax relief measured under each jurisdiction’s benchmark tax treatment. The estimates do not take into account
interactions that may occur if multiple measures were to be removed at the same time. PSE = Producer Support Estimate; CSE =
Consumer Support Estimate; GSSE = General Services Support Estimate
Data source: OECD (2013), Inventory of Estimated Budgetary Support and Tax Expenditures for Fossil Fuels.
21
Consumer support element to fossil fuels in Czech
Republic by year and fuel (Millions of CZK, nominal)
$2,000
$1,800
Support for gas
$1,600
$1,400
$1,200
Support for coal
$1,000
$800
Support for oil
$600
$400
$200
$2008
2009
2010
2011p
Notes: Tax expenditures for any given country are measured with reference to a benchmark tax treatment that is generally specific to that
country. Consequently, the estimates contained in the table above are not necessarily comparable with estimates for other countries. In
addition, because of the potential interaction between them, the summation of individual measures for a specific country may be
problematic. The allocation of particular measures across fuel types was done by the OECD Secretariat based on the IEA’s Energy
Balances.
Data source: OECD (2013), Inventory of Estimated Budgetary Support and Tax Expenditures for Fossil Fuels.
22
Environmental Outlook to 2050: What policies
do we need?
•
Make pollution more costly
•
Value and price the natural assets and ecosystem services
•
Remove environmentally harmful subsidies
•
Devise effective regulations and standards
•
Encourage green innovation
23
“…large leaps in clean technology, triggering a structural
shift in the way we produce and consume energy, are
required.
This is a ‘green growth’ rather than a ‘no growth’ world.
The continuation of growth in value to humans is
consistent with us living within the material constraints
imposed by a finite (if very large) planet, provided that we
continue to expand the intellectual economy through
innovation, technology development, an increased focus
on services and, more fundamentally, the art of living.”
Forthcoming as Hepburn, C. and Bowen, A. (2013), ‘Prosperity
with growth: Economic growth, climate change and
environmental limits’ in Fouquet, R. (ed.), Handbook of Energy
and Climate Change, Edward Elgar
24
Israeli freshwater use (2009)a
AbstractionAbstraction
per capita per capita
el
220
Israel
ny
390
y
Turkey 560
ia
Australia 640
710
Spain
esUnited States
0
400
Israel
220
390
Germany
n
Intensity ofIntensity
use
of use
Germany
560
Germany 27.6
Turkey
640
1 630
17.8
Turkey
Australia
710
3.6
Australia
Spain
1 630
86.4
Israel
17.8
3.6
Spain 29.2
United StatesUnited States
19.6
800
1200 800
1600 1200
2000 1600
2400 2000 2400
0
400
m3/ capita m3/ capita
0
20
27.6
29.2
19.6
0 40 20 60 40 80 60 100 8
abstraction as
%
abstraction
as %
of internal resources
of internal resource
available
year.
a) Or latest
available year.
CD,
Environment
Directorate. Directorate.
Source:
OECD, Environment
a) Or latest available year
Source: OECD, Environment Directorate.
25
Israeli economic efficiency of agricultural water use,
1986-2008
Index 1986=100
140
120
100
80
60
40
Value of agricultural production per m3 of water utilized for irrigation
20
0
Real price of fresh water to agriculture (inflation adjusted)
1986
1988
1990
1992
1994
1996
Source: OECD (2010), OECD Review of Agricultural Policies: Israel, 2010 .
1998
2000
2002
2004
2006
2008
General environmental management
Israeli Patents
in selected environment & climate-related
technologies, 1995-2008
technologies
number
Number
of of
patents
patents
100
90
Total
Totalpatents
number of patents
80
70
Water-related
Water
pollutionpatents
abatement
60
50
40
30
20
10
0
1995 1997 1999 2001 2003 2005 2007
Source: OECD (2011), OECD Patent Statistics Database; OECD, Environment Directorate.
27
Prices matter – and spur innovation
NOx Tax in Sweden
180
Marginal Abatement Cost
Curves of Taxed Emitters
160
SEK per kg NOx
140
120
100
80
60
40
20
0
-20
0
100
200
300
400
500
600
700
800
Emission intensity in kg NOx per GWh
1991
Source: OECD
1992
1994
1996
900
You can’t manage what you don’t measure
Towards green growth - Monitoring progress
Headline indicators
Environmental and resource productivity
Carbon productivity
1. CO2 productivity
Resource productivity
2. Non-energy material productivity
Multifactor productivity
3. Multifactor productivity including environmental services
The natural asset base
Renewable and non-renewable stocks
Biodiversity and ecosystems
4. Natural resource index
5. Changes in land use and cover
Environmental quality of life
Environmental health and risks
6. Air pollution (population exposure to PM 2.5)
Economic opportunities and policy responses
Technology and innovation, environmental goods
and services, prices and transfers, etc.
Placeholder – no indicator specified
“Green” difficult to isolate
Diversity of country circumstances, of instruments
 countries to choose
For more information, see
www.oecd.org/greengrowth
The OECD well-being framework
People rather than economic
system
Outcomes rather than inputs
and outputs
Both averages and
inequalities
 Both objective and subjective
aspects
 Attributes of both individuals
and communities
Both ‘here & now’ and
‘elsewhere & later’
Agreement with attitudinal statements including on
the role of technological progress to address
environmental issues Source: OECD (2012) Greening Household Behaviour
60%
50%
40%
30%
20%
10%
0%
Environmental issues should be dealth with primarily by
future generations.
Environmental impacts are frequently overstated.
Environmental issues will be resolved through technological
progress.