1 1 studia generalia lecture sustainable development: one of the main challenges for the oecd’s...
TRANSCRIPT
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Studia Generalia Lecture
Sustainable Development: One of the Main Challenges for the
OECD’s Future Work
Kiyo AkasakaOECD, Deputy Secretary General
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Overview
I. What is the OECD?
II. Sustainable Development
III. OECD Recommendations
IV. Finland’s track record
V. OECD and the Global Challenges
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I. What is the OECD?
An intergovernmental organisation
30 Member Countries + 100 partners
€188m budget and 2000 staff
Mission:- Growth- Development- Trade
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Address the economic, social and environmental challenges of globalisation.
Provide and pool comparative data.
Do analysis and forecasts to underpin national policies and multilateral co-operation.
Share experiences about policy among policymakers.
Submit to “peer reviews” of their national policies and performance.
OECD is a forum where countries:
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OECD work method
Analysis
Data collection &case studies
Discussion
Recommendations
Implementation
Peer reviews,multilateral surveillance
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II. Sustainable Development
3 dimensions of Sustainable Dev:– Environmental Protection– Economic Growth– Social Development
Our Common Future - Brundtland Report– development which meets the needs of the present without
compromising the ability of future generations to meet their own needs
OECD aims to reduce trade offs between the three dimensions
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OECD Environmental Challenges
• Some air pollutants (lead, CFCs, NOx, SOx)
• Forest coverage in OECD regions
• Water use
• Surface water quality
• Hazardous waste & toxic emissions from industry
• Energy production & use
• Forest quality in OECD regions
•Waste management
•GHG emissions
• Motor vehicle & aviation air pollution
• Agricultural pollution & groundwater quality
• Over-fishing
• Biodiversity & tropical forest coverage
• Chemicals in the environment
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Considerable progress in:Water management:
Water pricing, tradable permits, river basin managementClean up of most polluted waters, point-source pollutionChallenges: groundwater pollution, diffuse pollution (e.g. agricultural)
Reducing local air pollutants:OECD NOx emissions reduced by 15% since 1990, and SOx emissions by 40%.Regulatory timetables for air quality in all OECD regions to 2008Better transport and air pollution taxes, charges and regulationsChallenges: small PMs, VOCs, smog, critical loads for acid rain
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Reductions in SOx and NOx emissions
0
50
100
150
1990 1992 1994 1996 1998 2000
fossil fuel supply
SOx emissions
gross domestic product
OECD SOx and NOx emissionsIndex 1990=100
NOx emissions
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Progress (contd.)
Environmental and health risks from chemicals & GMOs:
Regulatory frameworks for assessing risks of GMOs, Unique Identifiers.
Challenges: bioaccumulating and toxic chemicals in the environment.
Entry into force of multilateral environmental agreements:
Rotterdam Convention on Prior Informed Consent.
Stockholm Convention on Persistent Organic Pollutants.
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Major environmental challenges:
Climate change
Decoupling environmental pressures from economic growth
Biodiversity management
Resource mobilisation
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Climate Change
●Only one-third of OECD countries have stabilised or reduced GHG emissions since 1990.
●Policies slowly being adopted, but insufficient.
●Only a slight decoupling of GHG emissions from economic growth.
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CO2 Emissions
0
25
50
75
100
125
1990 1992 1994 1996 1998 2000
fossil fuel supplyCO2 emissions from energy use
gross domestic product
OECD emissionsIndex 1990=100
GHG emissions
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1990-2001 1990-2001% %
change change
Australia 21 Korea ..Austria 10 Luxembourg -55Belgium 6.7 Mexico ..Canada 18.5 Netherlands 4.6Czech Republic -22.9 New Zealand 17.2Denmark 0.3 Norway 8.1Finland 4.7 Poland -32.2France 0 Portugal 36.4Germany -18 Slovak Republic -30.6Greece 26.1 Spain 33.1Hungary -22.7 Sweden -3.1Iceland -4.1 Switzerland 0.7Ireland 31.5 Turkey ..Italy 7.2 United Kingdom -11.7Japan 9.5 United States 13
OECD 5.6
GHG Emmissions
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Decoupling Environmental Pressures from Growth
AgricultureGovernment support to farmers = €229 billion (2003).
80% are environmentally damaging subsidies.
Transport & EnergyAir pollution, CO2 emissions, congestion, urban sprawl.
New technologies: promising, but slow.
Challenges: air transport, public transport, energy efficiency, fuel mix.
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BiodiversityProtected areas have increased in OECD to 14.6% of land area, but biodiversity loss outside these areas continues.
Percentage of endangered species continues to increase.
75% of marine fish stocks are fully exploited, overexploited, depleting, or recovering.
Challenges: better management of protected areas, establishment of marine parks, integration of biodiversity concerns in sectoral policies.
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Biodiversity (contd.)
1980 1985 1990 1997 20030
2
4
6
8
10
12
14
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Natural monuments (III)Habitat/species management areas (IV)Protected landscapes/seascapes (V)Managed resource protected areas (VI)
Strict nature reserves (Ia)Wilderness areas (Ib)National parks (II)
I to VI
Protected areas, OECD% of total area
IUCN categories:
Without IUCN category assigned
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International Financial Resources
Resources are insufficient:
$68.5 billion ODA in 2003
Only $5-6 billion to environment-related projects.
MDG goals to halve population without access to water & sanitation by 2015
Additional investment needs = $75 billion p.a. (current ODA and lending = $4 billion).
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Traffic Lights Summary
Some progress, but not enough.
Priority red lights: climate change, biodiversity, decoupling in agriculture, transport, energy.
More efficient and effective environmental policies -- taxes, tradable permits, subsidy removal.
Need for greater environmental policy integration and international co-operation.
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III. OECD Recommendations
Based on:
Costs & benefits of present and future environmental policies
Costs of inaction on environmental issues
Obstacles to reform, such as competitiveness concerns and social impacts
Appropriate policy mixes for particular sectors
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Environmental Goals & Economic Efficiency
Environment protection costs about 1 to 2% of GDP in OECD countries.
Design policies that lead to more economically efficient environmental policies.
Costs could be reduced by approximately 25%.
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Economic Instruments
Voluntary agreements
Regulations
Trading Schemes
Taxation
Removal of Subsidies
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Trends in environmental policy
Increased use of economic instruments (taxes; tradable permits)
Concern with impacts on society and competitiveness
Increased use of voluntary approaches… but these are often ineffective and costly
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Regulations
The main instrument used to control air pollution and resource extraction.
Many forms of regulations.
Regulatory instruments typically impose different costs across emitters.
Regulations mandating the use of a particular technology discourage innovation and have very high costs.
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Environmentally related taxes7 % of total tax revenue (OECD average)
2.5 % of GDP (range 1 - 4.5%)
http://www.oecd.org/env/policies/taxes/index.htm
Motor vehicles
26%
Transport fuels
64%
Heating &process fuels
5%
Electricity
3%
Other9%
Other 1%
Waste 1%
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Effectiveness of taxes?
FINLAND: – Pioneer in carbon taxes (1990)
DENMARK: – sulphur tax – tax on non-hazardous waste NORWAY:
– CO2 tax
SWEDEN:– sulphur tax
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But… taxes can be distortionary
Tax rate variations or exemptions such as: – under-taxing transport diesel fuel.– under-taxing coal.– tax-free aviation fuel (& airlines tickets).– almost full energy tax exemption to the industrial
sector.
Over 1500 tax exemptions recorded in the OECD environmental taxes database.
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Voluntary approaches
Broad use in EU, US, Japan Some Benefits Limitations:
– may not achieve extra environmental benefits– asymmetry in information – industry knows
more about costs – need of back-up policy for non-compliance
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Tradable permits
High potential for CO2/ GHGs:
Continue/ extend in other areas: – SOx
– Water, waste, transport
OECD: strategic guidelines and ex post evaluation.
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Reform of harmful subsidies
OECD country subsidies: – Well over €400 billion p.a. – $318 billion (2002) for agriculture
Environmentally harmful subsidy reform:
Obstacles to reform:– lack of comparable/ reliable data.– vested interests.– difficult to agree on alternative (e.g. income support)
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Estimates of Env-Related Subsidies – late 1990s
Sector OECD countries
non-OECD countries
Total
Agriculture 335 65 400
Water 15 45 60
Energy 80 160 240
Forestry 5 30 35
Fisheries 10 10 20
Other sectors (mainly road transport)
280 30 310
Total 725 340 1065
(% GDP) (3.4) (6.3) (4)
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Integrated Decision Making
Is there a common understanding of SD? Is there clear commitment and leadership? Are institutional structures in place to steer
SD? Is stakeholder involvement in decision making
encouraged? Is the diversity of knowledge and scientific
input to problems well managed?
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Future Work on SD at the OECD
Obstacles to removing environmentally harmful subsidies
Obstacles to the further use of economic instruments
Material flow accounting, decoupling and resource productivity
Inputs to the UNCSD process
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IV. Finland’s Track Record
The economy:
Impressive record from 1993-2000 Strong recovery since 2002 GDP per capita well ahead of Euro-area
and OECD averages Population aging a major challenge Need to enhance effectiveness of public
spending
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Finland and Sustainable Development
What is Finland’s environmental policy track record?
What more can it contribute to help reach targets such as those set out in the MDGs?
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2002-2003 OECD Economic Surveys : S.D. in Finland
1. Climate Change
2. Air Pollution
3. Natural Resources - forests
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SD Policy Advice to Finland (1)
Climate Change:
Participate in EU-wide permit trading scheme in order to increase cost effectiveness of emission abatement.
Equalise carbon taxes across various sectors of the economy.
Reassess exemption of energy taxes on peat.
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SD Policy Advice (2)
Air Pollution:
Reduce particulate pollution by accelerating the replacement of older cars and diesel engines by new models.
Reconsider tax differential between diesel and gasoline so they reflect externalities.
Create a trading scheme for NOx emissions.
Institute road pricing.
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SD Policy Advice (3)
Natural Resources:
Good governance of forest resources.
Costs and benefits of expanding protected areas needs to be weighed.
Competitive bidding might expand forest protection at least cost to society.
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V. Global Challenges
Millennium Development Goals
Plan of Implementation of the World Summit on Sustainable Development
– Poverty eradication– Changing patterns of consumption and production– Protecting and managing natural resources– Health (HIV/AIDS, etc)
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OECD Development Strategy
Shaping Globalization– Regionalisation, Globalisation, the Doha Agenda, International Migration,
Global Risk Management, Security and Development
Supporting Reforms for Development– Policy Coherence, Poverty Reduction, Investment and Private Sector
Development, Institutions, Governance and Capacity Building
Improving Development Co-operation and Finance
– Aid Effectiveness, Aid Harmonisation, Mobilisation of Domestic Resources and Taxation, Statistical Capacity Building
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OECD Contributions
OECD Clients:
OECD Member Countries
100 partner Countries
International organisations & forums– UNCSD, MDG+5, G-8
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Finland and the OECD
Julin Report Trade and Development Ministerial Active participation in the OECD