OECD work in support of climate action
SECTION TITLE RUNNING FOOT . e
Contents Climate action and the economy
2
International climate negotiations
5
Moving to low-emissions pathways 7 Climate resilience and adaptation
13
Green finance and investment
16
Land-use, ecosystems and agriculture 23 Cities and regions
26
Further reading
31
For further information: oe.cd/climate-action
b . OECD WORK IN SUPPORT OF CLIMATE ACTION
OECD work in support of climate action The urgency and scale of the climate challenge is clear, reinforced by the recent IPCC Special Report on Global Warming of 1.5°C (IPCC, 2018). Achieving the goals of the 2015 Paris Agreement requires unprecedentedly rapid economic, social and technological transformations to steer countries onto low-emissions, climate-resilient development pathways that are consistent with keeping the global average temperature increase well-below 2°C above pre-industrial levels, and pursuing efforts to limit it to 1.5°C. The vast majority of countries are taking action, but aggregate efforts to reduce greenhouse gas (GHG) emissions set out in countries’ Nationally Determined Contributions are not sufficient. Future infrastructure investment decisions are crucial, but recent OECD analysis shows that while decarbonisation is underway, infrastructure being built today is not compatible with a well-below 2°C future. We are at risk of locking the world into an emissions-intensive development pathway, or creating stranded fossil-fuel assets on a massive scale. In parallel, the devastating effects of climate change and weather extremes are becoming ever more visible, exposing the lack of resilience in many of our societies to such far-reaching change. Climate action and support for such action in developing countries need to be scaled up urgently. The OECD is playing an active role. As well as supporting the international climate negotiations over many years, the OECD has increased its efforts to help countries to deliver on their national and international climate commitments and contributions. OECD work focuses on the environmental, economic, financial and social dimensions that are critical to the creation of low-emissions, climateresilient development pathways. Examples, which are detailed further in this brochure, include:
l
Integrating the climate and wider sustainable development agendas Operationalising and implementing the Paris Agreement Tracking climate finance Designing more effective and efficient climate policies Aligning policy, financial and planning frameworks with climate and other environmental and well-being goals Strengthening the adaptive capacity of our societies Enhancing finance and investment in low-carbon, resilient infrastructure
l
Promoting a just low-carbon transition, including in cities.
l l l l l
l
“Strong climate action is not a threat to, but the foundation of, our future economic well-being”. Angel Gurría – OECD Secretary-General OECD WORK IN SECTION SUPPORTTITLE OF CLIMATE RUNNING ACTION FOOT . 1
Climate action and the economy
Climate action and the economy Meeting climate objectives and achieving sustainable economic growth are critical to enhancing societal and economic resilience, improving productivity and – in parallel with other policy reforms – reducing inequalities. Chronic underinvestment has left its mark on infrastructure and productivity growth has slowed down in many economies. Global trade growth has been stalling and inequality is increasing. The urgency, scale and speed of the required economic transformation are unprecedented, and infrastructure
Transitioning to a low-carbon economy later on will be costly with a 2% GDP loss if climate action is delayed until 2025.
choices made over the next few years will be crucial. Yet the national plans put forward for the Paris Agreement
well-below 2°C future is compatible with continued
are collectively insufficient to meet the global goals
economic development. The benefits of combined
that have been agreed. This disconnect is in part due
growth and climate policies more than offset the impact
to concerns over the implications of climate action
of higher energy prices, tighter regulations, and stranded
for economic growth and development. But it is a
high-carbon assets. The overall macroeconomic benefits
continuation of fossil-intensive development pathways
of the modelled policy package also include substantial
which puts at risk our future well-being and that of the
reductions in most countries’ public debt-to-GDP ratios.
natural systems we depend on.
Delaying climate action will increase costs Pro-growth reform measures, combined with measures to mobilise investment in low-emission and climate-
There are also significant costs associated with delaying
resilient infrastructure, can spur growth and improve
action to reduce emissions. If more stringent policies
well-being in the short-term while also accelerating
were introduced later they would affect a larger stock of
progress towards climate goals. Rather than adding to
high-carbon infrastructure built in the intervening years,
economic challenges, decisive climate action should
leading to higher levels of stranded assets across the
form an integral part of economic development plans.
economy.
A decisive transition can deliver economic wellbeing and a low-emissions, climate-resilient future
Investment in modern, smart and clean infrastructure in the next decade is hence a critical factor for the lowcarbon transition and sustainable economic growth. Investing in Climate, Investing in Growth estimates that USD
The OECD report Investing in Climate, Investing in Growth
6.3 trillion of investment in infrastructure will be required
shows how governments can not only build strong
annually on average between 2016 and 2030 to meet
economic growth but also limit future climate damages
global development needs. An additional USD 0.6 trillion a
if they collectively act for a “decisive transition” towards
year over the same period would make these investments
low-carbon, resilient economies. This requires combining
compatible with a well-below 2°C goal, a relatively small
climate-consistent, growth-enhancing policies with
increase considering the short and long-term gains in
well-aligned policy packages for mobilising investment
terms of growth, productivity and well-being.
in low-carbon, climate-resilient infrastructures and technologies. OECD modelling work presented in this
OECD Economic Surveys address climate challenges and
report suggests that such a “decisive transition” to a
a number of Surveys (e.g. Japan, India, Mexico) have
2 . OECD WORK IN SUPPORT OF CLIMATE ACTION
Positive growth effects for the G20 by combining climate action with economic reforms in a decisive transition (50% probability of achieving 2°C) Average across G20, GDP difference to baseline, %
2021
2050
4.73
2.07
-0.88 2.83
1.25 0.07
-0.42
0.93 1.02
0.71
0.12
Effect of net Additional fiscal Structural Energy prices, Net growth investment to initiative reforms & stranded assets effect decarbonise supportive of green & regulatory the transition innovation settings
Effect of net Additional fiscal investment to initiative decarbonise supportive of the transition
Structural reforms & green innovation
Energy prices, stranded assets & regulatory settings
Net growth Total net growth effect including effect estimated avoided climate damages
Source: OECD (2017), Investing in Climate, Investing in Growth, http://dx.doi.org/10.1787/9789264273528-en.
encouraged countries to integrate more ambitious
The initiative, supported by the German Government,
climate policy in economic policy making. In addition,
stems from the 2017 G20 Hamburg Climate and Energy
several Surveys (e.g. Sweden, Luxembourg, Switzerland)
Action Plan, which called on the OECD, World Bank
point out that climate change and climate change
Group and UN Environment, to “compile ongoing
mitigation can generate new financial risks and
public and private activities within the G20 for making
opportunities for investors. They call on governments to
financial flows consistent with the Paris goals and,
strengthen climate-related risk disclosure, especially for
building on this, to analyse potential opportunities for
financial intermediaries.
strengthening these efforts�.
Clean Power for a Cool Planet: Electricity Infrastructure
Financing Climate Futures highlights six transformative
Plans and the Paris Agreement (2018) sheds light on the
areas and twenty key actions that are key to aligning
extent to which current electricity generation projects
financial flows with climate and development goals.
under construction at the global level are inconsistent with what a low-carbon transition requires. The paper also explores the challenges and opportunities for governments to shift away from fossil fuel energy sources, and the role governments could play to accelerate the low-carbon transition.
The six transformative areas are: l Plan
sustainable and resilient infrastructure for a low-
emission and resilient future; l Unleash
innovation to accelerate the transition to low-
emissions technologies, business models and services;
Moving to a transformational agenda for climate action
l Ensure
Current infrastructure investment and financial
l Reset
flows are insufficient and remain poorly aligned with climate and sustainable development goals. The report Financing Climate Futures: Rethinking Infrastructure provides guidance for countries to move beyond an incremental approach to financing low-emission, resilient
fiscal sustainability for a low-emission,
resilient future; the financial system in line with long-term
climate risks and opportunities; l Rethink
development finance for climate; and
l Empower
city governments to build low-emission and
resilient urban societies.
infrastructure systems towards the transformational agenda needed for decisive climate action. CLIMATE ACTION AND THE ECONOMY . 3
Climate action and the economy
Climate change mitigation through a well-being lens
citizens, whose diverse interests and influence will come into play. Creating opportunities for workers most affected by the low-carbon transition will be essential.
Efforts to mitigate climate change are likely to be
The aggregate effect of the transition on jobs may be
more successful and less costly when climate action
modest, but reallocation across sectors and activities
and broader efforts towards human well-being and
will be necessary.
sustainable development are mutually supportive. On the one hand, action in non-climate policy areas should,
The OECD’s 2018 Green Growth and Sustainable Development
wherever and to the maximum extent possible, support
Forum focussed on the theme of “Inclusive Solutions
and not undermine climate change mitigation goals.
for the Green Transition: Competitiveness, jobs/skills
On the other hand, climate change mitigation will be
and social dimensions”. The conference addressed
more attractive if it also meets other important societal
the political economy of green and low-carbon policy
goals, such as clean air and improvements in health,
reforms, discussing their distributional impacts, and
improved access through integrated public transport
exploring inclusive solutions for households, workers,
infrastructure, or energy access through distributed
sectors and regions that may otherwise be hit hard by
renewable energy generation. These non-climate
the transition. The 2019 Forum will examine how a shift
benefits will often be realised on a shorter timescale
to a circular and low-carbon economy will affect the
than the longer-term benefits of mitigation, thus
extractive and heavy industries and society as a whole.
countering to some extent the challenges associated with the up-front costs of the low-carbon transition and
The OECD is implementing a project to develop
the short-termism pervasive in decision making at a
recommendations for improving regional development
range of levels, from individuals to governments.
outcomes for regions and cities specialised in mining and extractive industries, including through a just transition.
The report Accelerating Climate Action: Refocusing Policies through a Well-being Lens offers a new rationale for action centred on peoples’ well-being that could enable countries to garner and catalyse support for mitigation domestically. Part 1 of the report elucidates how inaction on mitigation will harm current and future well-being across sectors (electricity, heavy industry, residential, surface transport and agriculture). It highlights that the attainment of the SDGs – whether gender equality, education for all, or biodiversity – depends on a stable climate. The report provides guidance on how to drive policy action in five key sectors that achieves multiple priorities, underscoring the opportunity to enhance climate action by focusing on a broader set of well-being dimensions. Each chapter includes a set of indicators to help countries track the impacts of mitigation on wellbeing across sectors. Part 2 of the report will be released in early 2020, and will detail how to better design climate policies to foster well-being and attenuate any trade-offs.
A just transition The transition to low-emissions, resilient economies will affect everyone, from central and local governments to the private sector, as well as the labour force and 4 . OECD WORK IN SUPPORT OF CLIMATE ACTION
KEY PUBLICATIONS OECD (2018), Clean power for a cool planet: Electricity infrastructure plans and the Paris Agreement, www.oecd-ilibrary.org/ environment/oecd-environment-working-papers_19970900. OECD (2017), Investing in Climate, Investing in Growth, OECD Publishing, Paris, https://doi.org/10.1787/9789264273528-en. OECD/The World Bank/UNEP (2018), Financing Climate Futures: Rethinking Infrastructure, OECD Publishing, Paris, https://doi.org/10.1787/9789264308114-en. KEY WEBSITES Financing Climate Futures – www.oecd.org/environment/cc/climate-futures/ 2018 GGSD Forum “Inclusive Solutions for the Green Transition” – www.oecd.org/greengrowth/ggsd-2018/ OECD work on climate change – http://oe.cd/climate-action #ClimateAction: 25 actions to get us back on track by 2025 – http://oe.cd/climate25 CONTACTS Anthony Cox – Anthony.Cox@oecd.org Simon Buckle – Simon.Buckle@oecd.org Virginie Marchal – Virginie.Marchal@oecd.org
In the 2015 report Climate Finance in 2013-14 and the USD 100 billion Goal, public and private finance mobilised by developed countries for climate action in developing countries was estimated at USD 62 billion in 2014, up from USD 52 billion in 2013.
International climate negotiations
provides a neutral, non-negotiating platform for experts from a wide range of countries and other organisations to facilitate a dialogue and improve understanding around the technical issues feeding into the UNFCCC process. It has an excellent track record of providing technical
Operationalising and implementing the Paris Agreement
input, which has positively contributed to the negotiation
The Paris Agreement, which was adopted at COP21 and
Tracking public and private climate finance
process.
entered into force earlier than expected, provides both Parties and non-Party stakeholders greater impetus to act
Tracking climate finance is key to building trust and
on climate change. In 2018, the Katowice Climate Package
accountability in the international efforts to address
was adopted providing details on rules and guidelines
climate change. Tracking can further inform the
for a number of items necessary for operationalising
effective design of public interventions to mobilise
the Agreement. These items included an enhanced
finance for climate action, including in the broader
transparency framework, accounting for the progress
context of making financial flows consistent with
towards and achievement of Nationally Determined
climate objectives as stated in Article 2.1 c of the Paris
Contributions (NDCs), and the Global Stocktake, a
Agreement. The OECD is working to help address these
periodic review of collective progress towards achieving
issues based on its established expertise in tracking
the long-term goals under the Paris Agreement. Parties
public and private climate finance.
made progress in negotiations on many aspects of the draft rules for Article 6 of the Paris Agreement (market
The Creditor Reporting System (CRS) of the OECD
and non-market approaches), but did not ultimately
Development Assistance Committee (DAC) provides a
reach an overall consensus. At COP25, in Madrid, Spain,
robust system for monitoring climate-related developÂ
Parties will strive to achieve an outcome on Article 6, and
ment finance provided by its members, a few non-DAC
finalise the rulebook under which the Paris Agreement
members and climate-specific funds and programmes.
will operate.
Since 2013, seven multilateral development banks (MDBs) have provided project-level data on their
The OECD-IEA Climate Change Expert Group (CCXG)
climate-related development finance for the CRS.
is engaging with Parties and non-Party stakeholders
The CRS provides consolidated activity-level data for
to improve the understanding of methodological and
bilateral and multilateral climate-related development
procedural elements arising from the Paris Agreement.
finance via the so-called “Rio markers�, which are
In these areas, the CCXG is undertaking analytical work
considered descriptive rather than strictly quantitative.
to identify gaps, draw lessons from existing practice
Many OECD DAC members use this data as a starting
and present options for future arrangements. The CCXG
point for their financial reporting to the UNFCCC. INTERNATIONAL CLIMATE NEGOTIATIONS . 5
International climate negotiations
Timeline of key events related to climate negotiations Paris Agreement adopted
Communication of new or updated NDCs; Climate finance commitment of USD 100 billion per year to be mobilised by 2020; Second commitment period of Kyoto Protocol ends
Paris Agreement enters into force 2015
2016
2020 2018
Communication of new or updated NDCs; New collective quantified climate finance goal to be agreed by 2025
Communication of new or updated NDCs
2025 2023
2018 Talanoa Dialogue; IPCC report on 1.5 degrees Celsius; Proposed finalisation of Paris rulebook
2030 2028
First Global Stocktake (GST)
Second Global Stocktake (GST)
The OECD DAC and Research Collaborative on
OECD analysis of progress made by developed countries
Tracking Finance for Climate Action, in co-operation
towards the goal of mobilising USD 100 billion a year by
with public finance providers, have made significant
2020 for climate action in developing countries.
progress on developing methods and collecting data for measuring the mobilisation of private finance by
Estimating the effects of public capacity building and
public climate finance. Data collection by the OECD is
policy interventions on private finance is more challenging.
now institutionalised within the DAC statistical system.
Further work is being conducted in this area for identifying
These developments have in particular contributed to
suitable methodologies and possible reporting formats.
KEY PUBLICATIONS OECD-IEA Climate Change Expert Group (CCXG) Lo Re, L., Ellis, J., Vaidyula, M. and A. Prag (2019), “Designing the Article 6.4 mechanism: Assessing selected baseline approaches and their implications”, OECD/IEA Climate Change Expert Group Papers, No. 2019/05, OECD Publishing, Paris, https://doi.org/10.1787/59feca56-en. Rocha, M. and C. Falduto (2019), “Key questions guiding the process of setting up long-term low-emissions development strategies”, OECD/ IEA Climate Change Expert Group Papers, No. 2019/04, OECD Publishing, Paris, https://doi.org/10.1787/54c2d2cc-en. Falduto, C. and J. Ellis (2019), “Reporting Tables - potential areas of work under SBSTA and options - Part II: Financial support provided, mobilised and received”, OECD/IEA Climate Change Expert Group Papers, No. 2019/02, OECD Publishing, Paris, https://doi.org/10.1787/b0ba5a7e-en.
OECD (2016), 2020 Projections of Climate Finance Towards the USD 100 Billion Goal: Technical Note, OECD Publishing, Paris, https://doi.org/10.1787/9789264274204-en. OECD (2015), Climate Finance in 2013-14 and the USD 100 billion Goal: A Report by the OECD in Collaboration with Climate Policy Initiative, OECD Publishing, Paris, https://doi.org/10.1787/9789264249424-en KEY WEBSITES CCXG – www.oecd.org/environment/cc/ccxg.htm Research Collaborative – www.oecd.org/env/researchcollaborative/ OECD Statistics on External Development Finance Targeting Environmental Objectives Including the Rio Conventions – http://oe.cd/RioMarkers
Rocha, M. (2019), “Reporting Tables – potential areas of work under SBSTA and options - Part I: GHG inventories and tracking progress towards NDCs”, OECD/IEA Climate Change Expert Group Papers, No. 2019/01, OECD Publishing, Paris, https://doi.org/10.1787/f8a2a5da-en.
CONTACTS Climate Change Expert Group: Jane Ellis – Jane.Ellis@oecd.org Sara Moarif – Sara.Moarif@iea.org
Climate finance OECD (2019), Climate Finance Provided and Mobilised by Developed Countries in 2013-17, OECD Publishing, Paris, https://doi.org/10.1787/39faf4a7-en.
Research Collaborative on Tracking Private Climate Finance: Raphaël Jachnik – Raphael.Jachnik@oecd.org
McNicoll, L., et al. (2017), “Estimating Publicly-Mobilised Private Finance for Climate Action: A South African Case Study”, OECD Environment Working Papers, No. 125, OECD Publishing, Paris, https://doi.org/10.1787/a606277c-en. 6 . OECD WORK IN SUPPORT OF CLIMATE ACTION
Development Assistance Committee: Nicolina Lamhauge – Nicolina.Lamhauge@oecd.org Giorgio Gaulberti – Giorgio.Gaulberti@oecd.org
Moving to lowemissions pathways Climate change mitigation: What is at stake? Understanding the consequences of climate impacts on the economy and ecosystems plays a key role in building up momentum for policy action. The OECD has found that while the economic impacts of climate change spread across all sectors and regions, the largest negative consequences are projected for health and agriculture. Regionally, damages are especially strong in non-OECD countries in Africa and Asia. By 2060, global macroeconomic costs of climate change are projected to be in the range of 1.0% to 3.3% of GDP, although uncertainties are large. Recent analysis also highlights that changes in international competitiveness are driven by the relative
Early and ambitious mitigation action can help economies avoid half of the macroeconomic consequences by 2060 and could reduce projected global damages from 2-10% to 1-3% of global GDP by the end of the century (OECD, 2015).
impacts of climate change vis-Ă -vis competitors, rather than by the sign of the impacts themselves. Climate
Countries around the world continue to implement
change also has implications for other environmental
energy-pricing reforms. For example, Argentina, India,
concerns, such as water availability and biodiversity loss.
Indonesia, and several MENA countries took important steps towards reducing their energy subsidies for
Early policy action is warranted to avoid the lock-in of large
consumers. On the production side, the subsidised hard
damages in the short and medium run, and to avoid the
coal industry in Western Europe has been phased out
high risks of crossing climate tipping points. Governments
and efforts to end state aid to coal-fired power generation
should align policies for adaptation and mitigation, and
in the European Union are continuing. While reforms of
take sectoral damages into account, to avoid the largest
fossil-fuel subsidies have translated into reduced fiscal
negative consequences and reap the most cost-effective
deficits and a better alignment of prices with costs in
opportunities to confront climate change.
several countries, recent policy developments show that such gains might be under threat, depending particularly
Pricing carbon for effective climate mitigation
on the evolution of oil prices.
Low-emission pathways consistent with the Paris
The OECD Inventory of Support Measures for Fossil Fuels,
Agreement require global emissions to peak as soon as
covering 44 OECD and G20 economies, shows that
possible, with a subsequent rapid fall in emissions. In
progress in reducing support slowed down in 2017
order to limit warming to 2°C, modelling suggests that
and IEA estimates indicate that fossil-fuel subsidies
CO2 emissions would have to reach net zero by about
for consumption are on the rise in several developing
2075, and in order to stay below 1.5°C, net CO2 emissions
economies. The combined OECD-IEA global estimate,
would need to reach zero by around 2050 (IPCC 2018).
including subsidies in 76 economies, rose to USD 340
Removing fossil fuel subsidies and pricing carbon are
billion, a 5% increase compared to 2016. The production
an essential part of a larger package of policies that can
of fossil fuels continues to be supported through tax
reduce greenhouse gas emissions. OECD work, however,
incentives in many countries across the globe, and
highlights that many national climate strategies have not
policies that keep consumer prices artificially low persist
yet integrated these key principles sufficiently. Fossil fuel
in others. In order to reduce fossil fuel use and avoid
support needs to be removed and the carbon pricing gap
locking in fossil-fuel based capacity, reforms need to be
closed urgently to drive the low-carbon transition.
accelerated. MOVING TO LOW-EMISSIONS PATHWAYS . 7
Moving to low-emissions pathways
IEA-OECD combined estimate of support for fossil fuels show that progress has slowed down Billions (2017 USD) 700
Average import cost (2017 USD) 140 Coal
Natural Gas
Petroleum
Price of Oil
600
120
500
100
400
80
300
60
200
40
100
20
0
2010
2011
2012
2013
2014
2015
2016
2017
0
Source: OECD Inventory of Support Measures for Fossil Fuels 2019.
Taxing polluting sources of energy is an effective way
OECD’s Effective Carbon Rates 2018 publication, does not
to curb emissions that harm the planet and human
change the overall conclusion.
health, and the income generated can be used to ease the low-carbon transition for vulnerable households.
The OECD paper “The Joint Impact of the European Union
Yet, the OECD’ Taxing Energy Use 2019 report shows that
Emissions Trading System (ETS) on Carbon Emissions
70% of energy-related CO2 emissions from advanced
and Economic Performance” (2018) empirically estimates
and emerging economies are entirely untaxed, offering
the impact of the EU ETS, Europe’s main climate change
little incentive to move to cleaner energy. Taxes on coal
policy, on carbon emissions and economic performance
– which is behind almost half of CO2 emissions from
of regulated companies based on micro-data. It shows
energy – are zero or close to zero in most countries. For
that the EU ETS has reduced carbon emission by around
international flights and shipping, fuel taxes are zero,
10% but had no negative impact on employment or
meaning long-haul frequent flyers and cargo shipping
profits of regulated firms while boosting revenues and
firms are not paying their fair share. Broadening the
investment. It demonstrates that carbon pricing can go
scope to emissions trading systems, as is done in the
hand in hand with firms’ competitiveness.
Table 1. Overall, taxes are not being used to provide meaningful carbon price signals Average* fuel excise per tCO2 in 2018
Average* explicit carbon tax per tCO2 in 2018
Average* effective carbon tax per tCO2 in 2018
Coal and other solid fossil fuels
0.61
0.13
0.73
Fuel oil
3.50
0.46
3.96
Diesel
70.65
3.11
73.76
Kerosene
4.27
0.34
4.61
Gasoline
84.34
1.50
85.83
LPG
10.23
0.89
11.12
4.08
1.19
5.26
Natural gas
Note: *Emission-weighted average across 44 OECD and G20 countries and int. aviation & maritime Source: OECD (2019), Taxing Energy Use 2019: Using Taxes for Climate Action, OECD Publishing, Paris, oe.cd/TEU2019
8 . OECD WORK IN SUPPORT OF CLIMATE ACTION
“Improving economic efficiency and climate mitigation
benefits that occur far into the future, particularly by
outcomes through international co-ordination on carbon
showing how conventional procedures for establishing
pricing�, (OECD, forthcoming) presents the potential
the social discount rate become problematic in this
benefits and challenges of enhanced international
intergenerational context and what new approaches
co-ordination on carbon pricing and outlines the different
might be needed. The contribution of climate economics
types and levels of co-ordination that are available for
has also entailed thinking further about uncertainty
national and sub-national governments.
in CBA, especially where uncertain outcomes might be associated with large (and adverse) impacts.
Appraising policy options using cost-benefit analysis
Monitoring the nexus between economy and environment
Cost-benefit analysis (CBA) has long been a core tool of public policy. The systematic process of calculating the
The OECD, in close co-operation with other international
benefits and costs of policy options and projects is now
organisations, is working on the compilation of accounts
widely regarded as an essential step in the policy process.
according to the System of Environmental-Economic
It helps decision makers to have a clear picture of how
Accounting (SEEA) 2012 Central Framework. These
society would fare under a range of policy options for
accounts link environmental statistics, including on
achieving particular goals. Cost-Benefit Analysis and the
GHG-emissions, to economic activities as recorded
Environment: Further Developments and Policy Use (2018),
in the system of national accounts. Furthermore,
provides a timely update on recent developments in the
methodological improvements are made in the data
theory and practice of CBA. Perhaps the most significant
available, for example in the area of emissions by air
development is the contribution of climate economics in
transport, by using data on air movements from the
its response to the challenge of appraising policy actions
International Civil Aviation Organization (ICAO). This
to mitigate (or adapt to) climate change. Work in this
data will improve the monitoring and analysis of the
area has increased the focus on how to value costs and
nexus between economy and environment.
The OECD Taxing Energy Use 2019 report shows that 70% of energy-related CO2 emissions from advanced and emerging economies are entirely untaxed, offering little incentive to move to cleaner energy.
MOVING TO LOW-EMISSIONS PATHWAYS . 9
Moving to low-emissions pathways
Decarbonising transport
l The
“Decarbonising Transport in Emerging Economies”
project, supports transport decarbonisation in Transport emissions continue to increase globally
Argentina, Azerbaijan, India and Morocco, and
despite the implementation of disruptive innovations.
includes the design of a common assessment
The International Transport Forum (ITF) has estimated
framework for transport emissions that will cover
that passenger transport and global freight demand
several transport sub-sectors and transport modes.
will triple between 2015 and 2050 based on the current demand pathway. Transport CO2 emissions remain a
Both projects will lead to the development of effective
major challenge. The extrapolation of current policy
policy pathways for achieving national or local transport
ambitions into the future shows that these will fail to
CO2 reduction goals in 2050. ITF also continues its
mitigate increases in transport CO2 emissions in the
partnership with the European Union through the
face of strong growth in transport demand. In a scenario
“Decarbonising Transport in Europe” project, which aims
where current and announced mitigation policies are
to help the European Union to achieve its CO2 reduction
implemented, worldwide transport CO2 emissions are
ambitions for the transport sector. The project will provide
projected to grow by 60% by 2050. Although disruptive
European policy makers with better quantitative evidence
innovations such as automation, shared mobility,
on the actual impact of CO2 mitigation measures.
e-commerce, high-capacity vehicles, energy transition in long-distance road freight, and autonomous vehicles
Policies that could change travel behaviour will
have the potential to reduce emissions, appropriate
have significant mitigation impact. In the ITF’s
regulatory frameworks would need to be in place.
“Understanding Consumer Vehicle Choice: A New Car Fleet Model for France” report, a model was developed
Through its Decarbonising Transport initiative, the ITF
to better understand consumers’ vehicle purchase
has launched two new projects in 2019:
choice and ways in which to increase the uptake of electric vehicles. Factors that determine vehicle choice
l The
“Decarbonising Transport in Latin American
go beyond vehicle technology and include personal
Cities” project focuses on helping policy makers in
preferences, the availability of recharging infrastructure
Bogotá, Buenos Aires and Mexico City achieve their
for electric vehicles, and policy incentives, such as
CO2 reduction ambitions for the transport sector.
subsidies or preferential vehicle use rights.
10 . OECD WORK IN SUPPORT OF CLIMATE ACTION
Aligning policies for a low-carbon transition
It will provide tools to diagnose misalignments and prioritise and phase climate action across sectors and
Core climate policies must be complemented and
time. Understanding the political economy factors
supported by governments ensuring that policies
surrounding the transition (e.g. identifying communities
and regulatory frameworks are aligned with climate
at risk of being stranded; revenue losses for
policy goals. OECD work has identified a number of
governments; benefits of climate action on air quality)
misalignments in investment, fiscal and innovation
and adopting a well-being lens to mitigation will be
policies, which, if corrected, could help countries
key components of a successful low-carbon transition.
increase their ambition, improve the effectiveness of
Through the Environmental Performance Review
climate policies, as well as contribute to other policy
programme, the OECD will continue to assess countries’
objectives consistent with green and inclusive growth.
climate and broader green growth policies, and their progress towards a low-emissions economy.
These include the need to scale up and shift infrastructure investments away from fossil fuels. Continued investment in carbon-intensive infrastructure will result in a carbon lock-in. Economic policies – particularly those linked to taxation – should be tailored to push consumers into making low-carbon choices. Taxation favouring carbonintensive products (e.g. favourable personal tax treatment
In a scenario where current and announced mitigation policies are implemented, worldwide transport CO2 emissions are projected to grow by 60% by 2050.
of company cars) should be revised. Policies focusing on innovation, green technology deployment as well as international trade also have a considerable role to play in achieving climate mitigation goals. A comprehensive approach to the transition is needed, as demonstrated by “Power struggle decarbonising the electricity sector” (2018), which shows that climate policies, non-climate policies, as well as political economy factors, must support and mutually reinforce each other. The OECD Development Centre’s Policy Dialogue on Natural Resource-based Development helps design transformational development strategies aligned with the 2030 Agenda, focusing on sustainable transition of natural resource-rich developing countries towards a low-carbon economy and better integration into global value chains. The extractive industries sector is in in resource-rich developing countries often the single largest CO2 emitter and energy user. The Policy Dialogue supports the decarbonisation of the mining industry, and of fossil fuel production processes. The Policy Dialogue also focuses on the role of sovereign wealth funds and strategic investment fund in climate finance, and more generally on the use of resource revenues to support the low-carbon transition. In the years to come, the OECD will deepen and expand its work to help governments move to lowemissions, climate resilient development pathways. MOVING TO LOW-EMISSIONS PATHWAYS . 11
Moving to low-emissions pathways
KEY PUBLICATIONS Alova, G. (2018), “Integrating renewables in mining: Review of business models and policy implications”, OECD Development Policy Papers, No. 14, OECD Publishing, Paris, https://doi.org/10.1787/5bbcdeac-en. ITF (2019), ITF Transport Outlook 2019, OECD Publishing, Paris, https://doi.org/10.1787/transp_outlook-en-2019-en. ITF (2019), Understanding Consumer Vehicle Choice: A New Car Fleet Model for France, International Transport Forum Policy Papers No. 72, OECD Publishing, Paris. ITF (2018), “Decarbonising Maritime Transport: Pathways to zero-carbon shipping by 2035”, International Transport Forum Policy Papers, No. 47, OECD Publishing, Paris, https://doi.org/10.1787/b1a7632c-en. ITF (2018), “Transport CO2 and the Paris Climate Agreement: Reviewing the Impact of Nationally Determined Contributions”, International Transport Forum Policy Papers, No. 50, OECD Publishing, Paris, https://doi.org/10.1787/23513b77-en. Mirabile, M. and Calder, J. (2018), “Clean Power for a Cool Planet: Electricity Infrastructure Plans and the Paris Agreement”, OECD Trade and Environment Working Papers, OECD Publishing, Paris. https://doi.org/10.1787/9789264305304-en. OECD (2019), Global Material Resources Outlook to 2060: Economic Drivers and Environmental Consequences, OECD Publishing, Paris, https://doi.org/10.1787/9789264307452-en. OECD (2019), Accelerating Climate Action: Refocusing Policies through a Well-being Lens, OECD Publishing, Paris, https://doi.org/10.1787/2f4c8c9a-en. OECD/ITF (2019), Tax Revenue Implications of Decarbonising Road Transport: Scenarios for Slovenia, OECD Publishing, Paris, https://dx.doi.org/10.1787/87b39a2f-en. OECD (2018), Taxing Energy Use 2019: Using Taxes for Climate Action, OECD Publishing, Paris, https://doi.org/10.1787/058ca239-en OECD (2018), Cost-Benefit Analysis and the Environment: Further Developments and Policy Use, OECD Publishing, Paris, https://doi.org/10.1787/9789264085169-en. OECD (2018), Effective Carbon Rates 2018: Pricing Carbon Emissions Through Taxes and Emissions Trading, OECD Publishing, Paris, http://oe.cd/ECR2018. OECD (2018), OECD Companion to the Inventory of Support Measures for Fossil Fuels, OECD Publishing, Paris. https://doi.org/10.1787/9789264286061-en. OECD (2015), Aligning Policies for a Low-carbon Economy, OECD Publishing, Paris. http://dx.doi.org/10.1787/9789264233294-en Röttgers, D. and Anderson, B. (2018), “Power struggle: decarbonising the electricity sector”, OECD Trade and Environment Working Papers, OECD Publishing, Paris. 12 . OECD WORK IN SUPPORT OF CLIMATE ACTION
KEY WEBSITES Fossil Fuel Support – www.oecd.org/site/tadffss/ Policy Dialogue on Natural Resource-based Development – www.oecd.org/dev/natural-resources.htm Effective Carbon Rates – www.oecd.org/tax/effective-carbon-rates2018-9789264305304-en.htm OECD Action on Climate Change – www.oecd.org/environment/action-on-climate-change/ CIRCLE – www.oecd.org/env/indicators-modelling-outlooks/circle.htm Environmental Performance Review – http://oe.cd/epr Taxing Energy Use – http://oe.cd/TEU2019 ITF Decarbonising Transport initiative – www.itf-oecd.org/decarbonising-transport ITF Transport Outlook Project – www.itf-oecd.org/itf-transport-outlook-project CONTACTS Overall: Simon Buckle – Simon.Buckle@oecd.org Low-emissions development pathways and well-being: Aimee Aguila Jaber – Aimee.AguilarJaber@oecd.org Nicolina Lamhauge – Nicolina.Lamhauge@oecd.org Effective Carbon Rates: Kurt Van Dender – Kurt.VanDender@oecd.org Economic Cost of Climate Change: Rob Dellink – Rob.Dellink@oecd.org Fossil Fuel Subsidies: Nathalie Girouard – Nathalie.Girouard@oecd.org Transport and Mobility: Wei-Shiuen Ng – Wei-Shiuen.Ng@itf-oecd.org Stephen Perkins – Stephen.Perkins@itf-oecd.org Taxing Energy Use: Jonas Teusch – jonas.teusch@oecd.org Kurt Van Dender – kurt.vandender@oecd.org
Climate resilience and adaptation
Adaptation planning The characteristics of risks are increasingly difficult to predict over long time-horizons. Proportionate, flexible and iterative approaches are required to manage these risks.
Climate change poses risks to people, ecosystems and
The policy response should improve knowledge about the
every sector of the global economy. Significantly reducing
risks from climate change through national assessments
greenhouse gas emissions is not enough – impacts of
and use these assessments to plan for a range of possible
climate change are increasingly being felt today and
outcomes rather than one “most likely” projection.
need to be met with co-ordinated action to increase
The Real Cost of Disasters (2018) highlights pathways to
resilience. Climate adaptation polices reduce the adverse
improving the understanding of disasters’ impacts, a key
consequences of climate impacts that are already
step towards improving knowledge about the risks from
underway and help societies proactively prepare for the
climate change.
future. It will not be possible to eliminate risks entirely, so How do we make the right decisions in the face of
effective response and recovery systems are needed
uncertainty and long-term time horizons? What needs
to address those that remain. Climate Change Risks and
to be in place or be overcome to implement adaptation?
Adaptation: Linking Policy and Economics (2015) provides
What does success look like? The OECD is working with
an iterative process for managing the risks from
countries to address these and other key issues and put
climate change, gives an overview of costs and benefits
in place the right policies to prepare for the effects of a
of adaptation at the national and regional scale and
changing climate.
discusses adaptation finance in OECD countries.
CLIMATE RESILIENCE AND ADAPTATION . 13
Moving to low-emissions pathways
Economic robustness of coastal protection globally At the level of coastline segments in terms of the percentage of scenarios with benefit-cost ratio (BCR)>1 and countries in terms of the shares of a countries’ coast having a BCR > 1 under all scenarios considered
Source: OECD (2019), Responding to Rising Seas: OECD Country Approaches to Tackling Coastal Risks, OECD Publishing, Paris, https://doi.org/10.1787/9789264312487-en, drawing from Lincke, D. and J. Hinkel (2018).
Sectoral action
in OECD countries to help them ensure new and existing infrastructure is resilient to climate change.
Adaptation challenges, opportunities and constraints
Future work will examine how this framework can be
vary by sector. The OECD is supporting the
applied in specific country contexts.
implementation of adaptation at the sectoral level through targeted recommendations.
l
The use of nature-based solutions is gaining traction as a cost-effective, flexible response to climate risks.
l Sea-level
rise will affect the world’s coasts by
However, their implementation remains piecemeal as
increasing flood and erosion risks, and potentially fully
they face a variety of barriers. On the basis of a policy
inundating some areas. As risks increase, so will the
evaluation framework, the OECD is working on a series
associated economic and human costs from extreme
of detailed country case studies, focusing on current
events and slow-onset changes. OECD’s work on
decision-making approaches for water-related disaster
coastal adaptation takes stock of how OECD countries
risk management, to understand how to mainstream
are responding to coastal risks, examines the relative
the use of nature-based solutions in existing policies
distributional impacts of these policies, and highlights
and practices. The goal of this work is to provide
what is needed for an effective adaptation response.
guidance on the enabling conditions needed for naturebased solutions to be considered on an equal footing
l
Reliable infrastructure networks underpin economic
with grey options, and ultimately unlock replicable and
activity. By building resilience into decisions both to
scalable approaches to nature-based solutions.
upgrade existing systems and build new networks, there is the scope to enhance overall resilience to
l
Developing countries are disproportionately affected
climate change and avoid the risk of costly retrofitting
by extreme weather events. To help address these
in the future. The Policy Perspectives report on
risks, the OECD is producing guidance for development
“Climate-Resilient Infrastructure” (2018) provides a
co-operation actors and governments on strengthening
framework for action aimed at national policy makers
climate resilience. Case studies on Peru, Ghana, and
14 . OECD WORK IN SUPPORT OF CLIMATE ACTION
policy or project is delivering as expected. National Climate Change Adaptation: Emerging Practices in Monitoring and Evaluation (2015) draws upon emerging monitoring and evaluation practices across developed and developing countries to tools that countries can draw upon for their climate adaptation policies. The report Policy lessons on managing disaster-related contingent liabilities in public finance frameworks sets out policy guidance to take a forwardlooking approach to understanding and managing contingent liabilities that can arise from climate-related and other natural hazards.
KEY PUBLICATIONS Gamper, C., et al. (2017), “Managing disaster-related contingent liabilities in public finance frameworks”, OECD Working Papers on Public Governance, No. 27, OECD Publishing, Paris, https://doi.org/10.1787/a6e0265a-en. OECD (2019), Responding to Rising Seas: Comparing OECD Countries’ Approaches to Coastal Adaptation, OECD Publishing, Paris, https://doi.org/10.1787/9789264312487-en.
the Philippines have been developed under this work, and an interim report focusing on the links between climate adaptation and disaster risk management in a development context will be released in early 2020. With a specific focus on the private sector, the OECD is also examining the role of development cooperation in engaging private sector in climate change adaptation and risk management. Development of a working paper, Enabling Private Sector Engagement for Climate Change Adaptation: the Role of Development Co-operation Provider, is underway. The OECD is also conducting three country case studies in Guatemala, the Philippines and Senegal. Outcomes of this work will inform development of the guidance.
OECD (2018), “Climate-resilient infrastructure”, OECD Environment Policy Papers, No. 14, OECD Publishing, Paris, https://doi.org/10.1787/4fdf9eaf-en. OECD (2018), “Resilient Infrastructure for a Changing Climate”, OECD Publishing, Paris. OECD (2018), Assessing the Real Cost of Disasters: The Need for Better Evidence, OECD Reviews of Risk Management Policies, OECD Publishing, Paris, https://doi.org/10.1787/9789264298798-en. OECD (2018), “Innovative Approaches to Building Resilient Coastal Infrastructure”, OECD Environment Policy Papers, No. 13, OECD Publishing, Paris, https://doi.org/10.1787/9c8a13a0-en. Vallejo, L. and M. Mullan (2017), “Climate-resilient infrastructure: Getting the policies right”, OECD Environment Working Papers, No. 121, OECD Publishing, Paris, https://doi.org/10.1787/02f74d61-en.
implemented, and that lessons are shared.
KEY WEBSITES Adaptation – www.oecd.org/environment/cc/adaptation.htm Development and Climate Change – www.oecd.org/env/cc/ developmentandclimatechange.htm Water – www.oecd.org/water/ Risk Governance – www.oecd.org/governance/risk/
Robust monitoring and evaluation is needed to inform
CONTACTS Catherine Gamper – Catherine.Gamper@oecd.org
Supporting learning and accountability Given the scale of the adaptation challenge, it is essential that effective approaches are being adopted,
policy development. Monitoring and evaluation can improve policy learning and strengthen accountability by tracking how resources are spent and whether the
Nicolina Lamhauge – Nicolina.Lamhauge@oecd.org Takayoshi Kato – Takayoshi.Kato@oecd.org CLIMATE RESILIENCE AND ADAPTATION . 15
Green finance and investment
Green finance and investment
the Centre on Green Finance and Investment. The Centre provides a focal point for developing new OECD work on green finance and investment, drawing on expertise in finance, environmental policy, development and cities, among other areas. It also provides a global platform for
Investment in the green economy needs to take place on
engaging with key players and harnessing the insights of
a far greater scale over coming decades to achieve the
private sector partners.
Sustainable Development Goals (SDGs) and the ambition of the Paris Agreement. This will require the supply of
The flagship event of the Centre is the OECD Forum on
financing – through for example debt, equity and other
Green Finance and Investment, which has been held annually
channels – to significantly increase while its cost – that is
since 2014. This event brings together leading actors from
the return financiers demand – has to significantly decrease.
the green finance and investment community to promote effective engagement, collaboration and action on green
Green finance and investment addresses these and other
finance and investment, including institutional investors,
issues relating to the transition to a green, low-emissions
asset managers, ministries of finance and central banks,
and climate-resilient economy. To help catalyse and
financial regulators, commercial and investment banks,
support this transition through the development of
international climate funds, multilateral development
effective policies, institutions and instruments for green
banks, green investment banks, corporations, civil society,
finance and investment, in 2016 the OECD established
philanthropic sectors and more.
16 . OECD WORK IN SUPPORT OF CLIMATE ACTION
Since 2010 50% of private finance in infrastructure (USD 1.3 trillion) has been directed to renewable energy (Investing in Climate, Investing in Growth, OECD 2017).
A range of recent OECD publications contributing
the continued importance of state-owned enterprises
to the Centre has been developed on topics relating
(SOEs) both for renewable and fossil-fuel-based
to renewable energy investment and innovation;
electricity generation. They point to an opportunity
investment channels, interventions and institutions for
for governments to use their ownership of SOEs to
a low-carbon transition; good practice in infrastructure
accelerate the low-carbon transition. Beyond core
planning and developing a bankable pipeline of projects;
climate policies and a strong enabling environment,
green finance and investment in developing countries;
the transition also requires countries to adopt a suite
and tracking and measuring private climate finance.
of demand- and supply-side innovation policies and finance measures that are tailored to the climate
Renewable energy investment and innovation
challenge.
The report Financing Climate Futures: Rethinking
Investment channels, de-risking interventions and institutions for a low-carbon transition
Infrastructure underscores the critical role of innovation in determining the economic cost and likelihood of achieving the goals of the Paris Agreement. There is
Transitioning to a low-carbon economy will require
an urgent need for governments to accelerate the
institutions, instruments and market designs that
deployment of existing technologies, business models
efficiently allocate capital to zero emission, energy
and services, and swiftly move the next generation of
efficient infrastructure and technologies. Financing
climate solutions from the lab to the market.
Climate Futures: Rethinking Infrastructure highlights three priority actions to scale up and shift private investment
The working paper “The Empirics of Enabling Investment
in its chapter “Reset the financial system in line with
and Innovation in Renewable Energy” (2017) provides
long-term climate risks and opportunities”: integrate
empirical evidence for the importance of core climate
climate impacts in investment decisions and strategies,
policies and an enabling investment environment.
increase transparency and disclosure of climate-related
A further study, “State-Owned Enterprises and the
risks and opportunities in financial markets, and bolster
Low-Carbon Transition” (2018), highlights the role of
the role of financial supervisory authorities to ensure a
state-ownership in the electricity sector. Results show
stable and sustainable financial system. GREEN FINANCE AND INVESTMENT . 17
Green finance and investment
Potential for low-carbon bond issuance ranges between USD 620 billion and USD 720 billion per year by 2035 USD billions
Amount outstanding
Issuance
5 500
1 700
4 500
1 500 3 500
1 300 1 100
2 500
900 1 500
700
Annual bond issuance in the four regions
Bonds outstanding in the four regions
1 900
500 500 300
0 -500
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035
100
Source: OECD (2017), Mobilising Bond Markets for a Low-Carbon Transition, DOI: http://dx.doi.org/10.1787/9789264272323-en.
The report Mobilising Bond Markets for a Low-Carbon Transition (2017) demonstrates the contribution that
Developing robust project pipelines for Low-carbon infrastructure
bond markets can make to a low-carbon transition. Further, Green Investment Banks: Scaling up private
Developing Robust Project Pipelines for Low-Carbon
investment in low-carbon, climate-resilient infrastructure
Infrastructure (2018), looks at “project pipelines”, a key focal
(2016) provides the first comprehensive study of green
point in countries’ efforts to implement their climate and
investment banks, analysing the rationales, mandates
development commitments, including the Nationally
and financing activities of this relatively new category of
Determined Contributions. Meeting climate objectives
public financial institution.
requires the successful implementation of many new low-carbon infrastructure projects constituting a pipeline
The working paper “OECD Progress Update on
of projects, delivered at the right time, providing the
Approaches to Mobilising Institutional Investment
right level of service, and involving the right institutions.
in Sustainable Infrastructure” (2018) shows findings
Through a series of case studies, this report focuses on the
of an OECD database of institutional investments in
concrete actions needed to develop low-carbon project
sustainable infrastructure with public interventions at
pipelines. It highlights that while governments and public
the project-level. The paper builds on “Mapping Channels
institutions are already taking actions to develop robust
to Mobilise Institutional Investment in Sustainable
pipelines in a range of country settings, these actions
Energy” (2015). The database of the progress update
nevertheless need to be strengthened significantly to meet
includes 152 projects and detailed information on the
long-term climate mitigation objectives.
channels used by institutional investors and the types of public interventions and other actors involved, among others. Based on this information, the work analyses recent developments in the mobilisation of institutional investment in climate-related infrastructure. 18 . OECD WORK IN SUPPORT OF CLIMATE ACTION
Key recommendations from the report include:
the deployment of “high-value� and strategically important projects and sectors;
l Link
policy making to forward-looking objective
setting and the programmes and institutions to deliver
l Foster
the development of a diverse set of bankable
them, providing overall co-ordination and leadership
projects and promote business models suitable for
to champion project pipelines;
private sector needs, setting strong eligibility criteria to determine which projects should be built and
l Focus
on strengthening the interface and mechanisms
supported and which should not; and
that governments employ to disseminate information and convene actors, offering transparent processes
l Increase
country resilience to changes in climate
and communicating relevant information on projects
and development needs, deploying infrastructure
and the pipeline with the financing and investment
that remains pertinent and relevant over time and
community;
tailored to changing external conditions, and avoiding expensive path dependency or lock-in.
l Take
a holistic, whole-of-government approach to
infrastructure planning and investment, feeding
Ensuring fiscal sustainability
lessons back into policy-making processes to bolster the investment enabling environment and providing
The way governments choose to raise and spend money
funding or institutional support to projects when
is decisive in delivering the low-emission, resilient
appropriate;
transformation needed. The climate challenge requires governments to align all channels of public finance with
l Fast-track
suitable infrastructure project investment
climate and growth objectives, while also taking into
in a way that brings the carbon and energy intensities
account medium-term budgetary cycles and longer-term
of the country’s economy to target levels, prioritising
fiscal sustainability.
GREEN FINANCE AND INVESTMENT . 19
Green finance and investment
new, innovative tools to assess and drive improvements in the alignment of national expenditure and revenue processes with climate and other environmental goals. This is a crucial step in achieving a central objective of the Paris Agreement on climate change as well as of the Aichi Biodiversity Targets and the United Nations’ Sustainable Development Goals – aligning national policy frameworks and financial flows on a pathway towards low greenhouse gas emissions and environmentally sustainable development. Green budgeting involves using the tools of budgetary policy-making to help achieve environmental goals. It will support governments in achieving environmental goals by: l
Identifying and evaluating environmental impacts of budgetary and fiscal policies;
l
Assessing their coherence towards the delivery of national and international commitments and redirecting budget decisions; and
l
Contributing to informed, evidence-based debate and discussion on sustainable growth.
The 2019 OECD Green Growth and Sustainable Development Forum addressed the fiscal implications of The Paris Collaborative on Green Budgeting was
the low-carbon transition for countries whose revenues
launched by the OECD Secretary-General Angel Gurría
rely on fossil energy resources as well as for countries
at the One Planet Summit in Paris on 12 December
where energy consumption is a significant tax base.
2017 to help governments ensure that their fiscal and budgetary actions reflect the environmental and climate
Financial innovation for sustainable infrastructure
goals to which they have committed. It aims to design new, innovative tools to assess and drive improvements
The transition to a low-carbon future requires a
in the alignment of national expenditure and revenue
visionary reassessment of infrastructure systems
processes with climate and other environmental goals.
and services, from their interaction with consumers
This is a crucial step in achieving a central objective
all the way through planning, procurement,
of the Paris Agreement on climate change as well
financing, construction, and operations. Embracing
as of the Aichi Biodiversity Targets and the United
new technologies that enable drastic reductions in
Nations’ Sustainable Development Goals – aligning
greenhouse gas (GHG) emissions will be a crucial
national policy frameworks and financial flows on a
element to a successful transition. Emerging distributed
pathway towards low greenhouse gas emissions and
ledger technologies (DLT), such as blockchain, have the
environmentally sustainable development.
potential to improve current processes and systems by acting as a digital enabler across the infrastructure
The OECD Paris Collaborative on Green Budgeting (PCGB)
value chain.
works with governments to ensure that their fiscal and budgetary actions reflect the environmental and climate
The case study Blockchain Technologies as a Digital
goals to which they have committed. It aims to design
Enabler for Sustainable Infrastructure identifies key
20 . OECD WORK IN SUPPORT OF CLIMATE ACTION
areas where blockchain is already impacting the
The GREEN Action Task Force hosted by the OECD also
provision of sustainable infrastructure services, and
examines and provides comprehensive and consistent
presents four original case studies where blockchain
record of energy subsidies in countries of Eastern
could unlock value across the infrastructure life
Europe and the Caucasus, conducted a country review
cycle. A roadmap for public and private sector actors
of investment needs and policy frameworks to mobilise
provides guidance on bringing ideas to life through pilot
finance for climate action in Georgia, and explored the
programmes. The technology’s potential advantages and
role of Shardara Multi-Purpose Water Infrastructure in
disadvantages are outlined, along with implications for
Kazakhstan.
policy makers. The OECD’s new Programme on Clean Energy Finance
Promoting green finance and investment in emerging and developing economies
and Investment Mobilisation (CEFIM), funded by the Danish government, will help five emerging economies in Latin America, South and Southeast Asia
Blended finance, an approach to mix different forms
to strengthen their domestic policy frameworks to
of capital in support for development, is emerging as
attract more private sector finance and investment in
an important solution to help meet the infrastructure
renewable electricity and energy efficiency. The five-year
investment gap in developing countries by using
programme which aims to support the development of
public support to mobilise commercial finance. OECD
bankable clean energy project pipelines will be delivered
Blended Finance Principles have been endorsed by the
in close collaboration with governments and other
Development Assistance Committee and will guide
relevant stakeholders.
the use of development finance in blended approaches going forward. The OECD report, Making Blended Finance Work for the SDGs provides a comprehensive assessment
Tracking the consistency of finance flows with climate objectives
of the state and priorities for the use of blended finance in developing countries, and a new OECD Policy
Beyond only looking at finance that contributes to
Perspectives “Blended Finance: Mobilising resources
climate action, the OECD-led Research Collaborative on
for Sustainable Development and Climate Action in
Tracking Finance for Climate Action initiated work to
developing countries” collates the latest OECD work on
more broadly assess the consistency of investment and
this topic.
finance flows with climate mitigation and adaptation objectives (as called for in the Article 2.1 of the Paris
The paper “Scaling up climate-compatible infrastructure:
Agreement). This requires an all-encompassing scope in
Insights from national development banks in Brazil and
terms of types of finance and geographies. As a first step,
South Africa” provides a focus on enabling institutions.
the Research Collaborative has initiated country pilots
National development banks (NDBs) and development
to test data and methods and learn lessons relevant to
finance institutions – domestically focused, publicly
scale up such analysis across countries. This work may
owned financial institutions with a specific development
inform both the Global Stocktake under the UNFCCC
mandate – are poised to play a role in bridging the
(see “International climate negotiations” on pages 5-6),
investment gap for climate-compatible infrastructure
as well as domestic policies towards making finance
in developing countries. But delivering on the Paris
flows more consistent.
Agreement will require NDBs to transition from their traditional role as ‘financer’ to ‘mobiliser’ of investment for infrastructure, and to be better recognised in
Aligning development co-operation and climate action
the international climate and development finance landscape. New work on the application of blended
As countries prepare their next round of commitments
finance for climate in Brazil and the role of NDBs for
under the Paris Agreement, it is timely to assess the
climate-compatible infrastructure in China will similarly
progress that providers of development co-operation
advance the topic of greening financial systems in
have made to date in accounting for climate change
emerging and developing economies.
and aligning their activities with the objectives of the GREEN FINANCE AND INVESTMENT . 21
Green finance and investment
Agreement. It is vital to identify, analyse and creatively
Another recent OECD publication on Greening Development
overcome the major barriers that currently undercut
Co-operation emphasises the importance of going
coherent and effective climate action in developing
beyond doing no harm to the environment, ensuring that
countries and that thereby jeopardise sustainable
development co-operation providers take every opportunity
development. The OECD report Aligning Development
to do good. It proposes five building blocks to deliberately
Co-operation and Climate Action: The Only Way Forward
and proactively integrate environmental concerns including
examines the imperatives, challenges and priority
climate into development policies, plans, budgets and
actions for development co-operation to align with
actions. It highlights the fact that more needs to be done to
ambitious climate action.
invest in biodiversity and to address environmental pollution and associated environmental health issues.
KEY PUBLICATIONS Ang, G., D. Röttgers and P. Burli (2017). “The empirics of enabling investment and innovation in renewable energy”, OECD Environment Working Papers, No, 123, OECD Publishing, Paris, http://dx.doi.org/10.1787/67d221b8-en. Crishna Morgado, N. and B. Lasfargues (2017), “Engaging the Private Sector for Green Growth and Climate Action: An Overview of Development Co-Operation Efforts”, OECD Development Co-operation Working Papers, No. 34, OECD Publishing, Paris, https://doi.org/10.1787/85b52daf-en. Jachnik, R., M. Mirabile and A. Dobrinevski (2019), “Tracking finance flows towards assessing their consistency with climate objectives”, OECD Environment Working Papers, No. 146, OECD Publishing, Paris, https://doi.org/10.1787/82cc3a4c-en. OECD (2019), Biodiversity: Finance and the Economic and Business Case for Action, http://oe.cd/bio-fin-econ-case4action. OECD (2019), Making Blended Finance Work for Water and Sanitation: Unlocking Commercial Finance for SDG 6, OECD Studies on Water, OECD Publishing, Paris, https://doi.org/10.1787/5efc8950-en. OECD (2019), Aligning Development Co-operation and Climate Action: The Only Way Forward, The Development Dimension, OECD Publishing, Paris, https://doi.org/10.1787/5099ad91-en. OECD (2019), Greening Development Co-operation: Lessons from the OECD Development Assistance Committee, The Development Dimension, OECD Publishing, Paris, https://doi.org/10.1787/62cc4634-en. OECD (2019), “Blockchain technologies as a digital enabler for sustainable infrastructure”, OECD Environment Policy Papers, No. 16, OECD Publishing, Paris, https://doi.org/10.1787/0ec26947-en. OECD (2019), “Scaling up climate-compatible infrastructure: Insights from national development banks in Brazil and South Africa”, OECD Environment Policy Papers, No. 18, OECD Publishing, Paris, https://doi.org/10.1787/23097841 OECD (2018), Developing Robust Project Pipelines for Low-Carbon Infrastructure, Green Finance and Investment, OECD Publishing, Paris, https://doi.org/10.1787/9789264307827-en. 22 . OECD WORK IN SUPPORT OF CLIMATE ACTION
OECD (2018), Inventory of Energy Subsidies in the EU’s Eastern Partnership Countries, Green Finance and Investment, OECD Publishing, Paris. http://dx.doi.org/10.1787/9789264284319-en OECD (2017), Mobilising Bond Markets for a Low-Carbon Transition, Green Finance and Investment, OECD Publishing, Paris, https://doi.org/10.1787/9789264272323-en. KEY WEBSITES Centre on Green Finance and Investment – www.oecd.org/cgfi/ Green Budgeting – www.oecd.org/environment/green-budgeting Environment and Climate Change in Development Co-operation – http://www.oecd.org/dac/environment-development/ OECD Blended Finance – www.oecd.org/dac/financing-sustainable-development/ development-finance-topics/blended-finance.htm Green Growth – www.oecd.org/greengrowth/ggsd2019/ Financing Climate Futures – www.oecd.org/environment/cc/climate-futures/ CONTACTS Development Co-operation and climate change: Jens Sedemund – Jens.Sedemund@oecd.org Green Finance and Investment: Robert Youngman – Robert.Youngman@oecd.org GREEN Action Task Force: Kumi Kitamori – Kumi.Kitamori@oecd.org Paris Collaborative on Green Budgeting: Juliane Jansen – Juliane.Jansen@oecd.org Private Finance for Sustainable Development: Paul Horrocks – Paul.Horrocks@oecd.org Programme on Clean Energy Finance and Investment Mobilisation: Cecilia Tam – Cecilia.Tam@oecd.org Tracking the climate-consistency of finance and investments: Raphael Jachnik – Raphael.Jachnik@oecd.org
Land-use, ecosystems and agriculture
Managing the interactions between climate change, land use and terrestrial ecosystems Climate change is a key pressure on biodiversity and ecosystem services. The OECD Environmental Outlook to 2050
Land-use systems play a crucial role in achieving
projects this pressure to increase in the future. The report
a number of the Sustainable Development Goals,
Scaling Up Finance Mechanisms for Biodiversity (OECD, 2013)
including those relating to climate, biodiversity, water,
highlights that various land-use related climate mitigation
sustainable energy, food security, and poverty.
strategies, such as Reducing Emissions from Deforestation and Degradation (REDD+), as well as ecosystem-based
In particular, agriculture, forestry and other land
climate adaption strategies, can offer significant co-
use will play a critical role towards meeting climate
benefits for biodiversity and ecosystems. Biodiversity
goals under the Paris Agreement, with 21% of
policy instruments that help ensure the conservation and
global greenhouse gas emissions stemming from
sustainable use of forests, such as payments for ecosystem
agriculture, forestry and land use change, and their
services programmes and biodiversity offsets, are relevant
role as possible carbon sinks. Effective climate
for climate change mitigation.
change mitigation through sustainable land-use and management practices are also crucial for meeting
Climate change also impacts water quality and quantity
the biodiversity goals under the Aichi Targets of the
(droughts and floods), with potentially adverse impacts on
Convention on Biological Diversity. The linkages
aquatic ecosystems and agricultural productivity. Water
and interactions between climate change, land use,
Risk Hotspots for Agriculture (2017) identifies and proposes
ecosystems and agriculture offer both opportunities
targeted responses to address these issues. OECD Green
for synergies and the need to reconcile trade-offs
Growth Indicators (2017) provides new indicators on land
when devising policies. The OECD conducts multiple
use and land use conversion across a range of OECD
areas of work across this diverse nexus of issues.
and G20 countries, data that can enable more informed policy-making. LAND-USE, ECOSYSTEMS AND AGRICULTURE . 23
Land-use, ecosystems and agriculture
Strengthening mitigation and adaptation efforts in the agriculture sector
potential of the food sector to reduce its GHG emissions while providing a healthy diet to the world’s population. Transitioning to a sustainable agriculture and food
Agriculture contributes to a significant share of the GHG
sector entails that policy makers:
emissions – 12% directly through agricultural activities and an additional 9% through land use changes. The
l
Analyse agriculture’s performance beyond food
main direct agricultural GHG emissions are nitrous
production and GHG emissions. The sectors’
oxide emissions from soils, fertilisers, manure and urine
sustainability needs to be assessed in terms of
from grazing animals, as well as methane production
ecosystem services and well-being more broadly (e.g.
by ruminant animals and from paddy rice cultivation.
healthy diets, healthy environment and sustainable
Limited efforts have been undertaken to reduce
resource management).
emissions from agriculture thus far. A continued lack of progress could lead the sector to overtake energy and
l
Take a food system approach that explores change
become the largest source of global GHG emissions by
levers on both the supply (agriculture) and demand
mid-century.
sides (e.g. limiting meat consumption and animal proteins in our diets benefits both consumers’ health
The report Enhancing Climate Change Mitigation through
and climate).
Agriculture assesses the economic consequences of different mitigation policies. It finds that market-based instruments are the most cost-effective ways to cut
Managing the interactions between climate change and our oceans
emissions from farming, even though they introduce different trade-offs for farmers, consumers and
Climate change is rapidly impacting marine ecosystems
taxpayers and are challenging to implement. Agriculture
and species. As highlighted in Marine Protected Areas:
policy reforms are needed to correct misaligned
Economics, Management and Effective Policy Mixes Policy
agriculture incentives and redirect policy efforts to
(2017), it is estimated that climate change has already
specific investments that explicitly target climate
resulted in either loss or degradation of 50% of salt
and sustainability objectives. As shown in the paper
marshes, 35% of mangroves, 30% of coral reefs and 20%
“Evaluating the environmental impact of agriculture
of seagrass worldwide. The report highlights the key
policies”, some of the existing support policies encourage
pressures on oceans and examines how instruments such
GHG emissions.
as marine protected areas and blue carbon payments for ecosystem services can be scaled up to help mitigate
At the same time, agriculture is projected to be the second
climate change and enhance ecosystem resilience.
most economically damaged by climate change. Warming and more prevalent extreme climate events are already
Promoting coherent policy responses
impacting agriculture crops and livestock production in many regions. The changing climate will also add to
As highlighted in OECD/IEA/NEA/ITF (2015), Aligning
resource problems, such as water scarcity, pollution,
Policies for the Low-Carbon Economy, sustainable land
and soil degradation. Self-initiated efforts by farmers
management practices – reduced deforestation, restoring
to adapt to climate change are unlikely to be sufficient,
degraded land, better agricultural practices and increased
given uncertainties surrounding future projections of
carbon sequestration in soils and forests – could make
weather patterns and extreme weather events. The paper
a large contribution to the global climate change effort
“Overcoming barriers to the adoption of climate-friendly
while delivering the productivity improvement needed
practices in agriculture” examines options to deliver both
to respond to growing food demands. As noted in the
mitigation and adaptation benefits.
report Innovation, Productivity and Sustainability in Food and Agriculture, governments should minimise policy
The report Accelerating Climate Action: Refocusing Policies
incoherencies in policies affecting the agriculture sector,
through a Well-being Lens includes a specific chapter on
and prioritise interventions to the long term performance
climate mitigation and the food sector. It assesses the
of the sector.
24 . OECD WORK IN SUPPORT OF CLIMATE ACTION
Effective climate change mitigation through sustainable land-use and management practices are crucial for meeting the Paris Agreement and biodiversity goals under the Aichi Targets of the Convention on Biological Diversity.
Sustainable land-management practices can also improve
countries with large agricultural and forestry sectors and
the resilience of economies to a changing climate by
associated greenhouse gas emissions, many of which
protecting ecosystems. More coherent policy frameworks
also host globally-important biodiversity. Drawing on
will therefore be needed to address the multiple and
these countries’ relevant national strategies and plans,
overlapping challenges. On-going OECD work, Towards
institutional co-ordination, and policy instruments, the
Sustainable Land Use: Aligning Biodiversity, climate and food
report will provide good practice insights on how to better
polices, is examining the interactions, potential synergies
align land use decision-making processes and to achieve
and trade-offs across these areas. The work will draw
stronger coherence between land use, climate, ecosystems
on insights from a selection of OECD and non-OECD
and food objectives.
KEY PUBLICATIONS Henderson, B. and J. Lankoski (2019), “Evaluating the environmental impact of agricultural policies”, OECD Food, Agriculture and Fisheries Papers, No. 130, OECD Publishing, Paris, https://doi.org/10.1787/add0f27c-en. OECD (2019), Enhancing Climate Change Mitigation through Agriculture, OECD Publishing, Paris, https://doi.org/10.1787/e9a79226-en. OECD (2019), Innovation, Agricultural Productivity and Sustainability: Main findings from country reviews and policy lessons, OECD Publishing, Paris, https://doi.org/10.1787/c9c4ec1d-en OECD (2017), Water Risk Hotspots for Agriculture, OECD Studies on Water, OECD Publishing, Paris, https://doi.org/10.1787/9789264279551-en . OECD (2020, forthcoming) Towards Sustainable Land Use: Aligning Biodiversity, Climate and Food Policies, OECD Publishing, Paris. KEY WEBSITES Agriculture and the environment – www.oecd.org/agriculture/ topics/agriculture-and-the-environment/
Biodiversity – www.oecd.org/environment/resources/biodiversity/ Climate change and food systems – www.oecd.org/agriculture/ topics/climate-change-and-food-systems/ The ocean – www.oecd.org/ocean CONTACTS Land-use, ecosystems and biodiversity: Katia Karousakis – Katia.Karousakis@oecd.org Jane Ellis – Jane.Ellis@oecd.org Will Symes – Will.Symes@oecd.org Hélène Blake – Helene.Blake@oecd.org Agriculture: Guillaume Gruère – Guillaume.Gruere@oecd.org Ben Henderson – Ben.Henderson@oecd.org Jussi Lankoski – Jussi.Lankoski@oecd.org Marcel Adenauer – Marcel.Adenauer@oecd.org
LAND-USE, ECOSYSTEMS AND AGRICULTURE . 25
Land-use, ecosystems and agriculture
Cities and regions
The OECD is supporting subnational governments in delivering on both the climate and inclusion agendas. By launching the OECD Champion Mayors for Inclusive
Cities are home to more than half of the world’s
Growth initiative in March 2016, the OECD created
population, consume 70% of the world’s energy, and
a coalition of more than 50 mayors from around the
account for a roughly equivalent share of global
world committed to tackle inequalities and promote
greenhouse gas emissions. Because they concentrate
more inclusive economic growth. By signing the Seoul
physical, human and financial assets, cities are
Implementation Agenda for Inclusive Growth in Cities, Mayors
disproportionately vulnerable to climate impacts. Cities
recognised the importance of bridging strategies for
also compete for human talent and inward investment.
climate change and inclusive growth as one of the two
Quality of life and quality of infrastructure are critical
key priorities.
and will have major consequences for our ability to manage and adapt to climate risks.
The OECD helps cities identify knowledge gaps, advance research, and ultimately promote best practices
Delivering inclusive climate action in cities
and policy solutions for achieving more inclusive, sustainable cities. The OECD Case study of Inclusive Growth
Cities will be key to a just low-carbon transition.
in Seoul, a first of its kind, diagnoses inequalities in Seoul
They are on the frontline of climate action, and in the
and assesses key dimensions of its Inclusive Growth
search for solutions to ensure that climate strategies
policy framework, including the interaction between
effectively respond to major social and economic
climate change and inequalities.
challenges such as rising inequality, unemployment, poverty and unequal access to opportunities. While
Subnational governments also have an important role to
many cities have put climate change and rising
play in scaling up finance for inclusive climate action, and
inequalities at the top of their policy agendas, climate
have at their disposal a broad range of financial tools and
change and inclusive growth have been addressed
incentives. The 2018 Financing Climate Futures case study
through separate policy portfolios, with limited attention
“Financing climate objectives in cities and regions to deliver
paid to the trade-offs and synergies between these two
sustainable and inclusive growth” shows that on average
areas.
two-thirds of environment- and climate-related public
26 . OECD WORK IN SUPPORT OF CLIMATE ACTION
investment is conducted by cities and regions. The OECD
of national climate mitigation and adaptation strategies
is developing new work, in co-operation with CPI, which
and plans, where regional and city-level actions contribute
aims at “Measuring and tracking subnational climate-
to overarching national climate policy strategies.
related finance for climate action”. This project is is part of the initiative on Leadership for Urban Climate Investment
“Delivering the Paris Agreement Through a Whole-
(LUCI) led by Germany, which was launched during the
of-Government Approach” (forthcoming) highlights
UNSG Climate Action Summit in September 2019 under
the importance of a whole-of government approach
the Cities, Infrastructure and Local Action Track.
involving multiple stakeholders, to effectively implement Nationally Determined Contributions
Building resilient cities
and scale up climate action ambitions. Through a study of policy co-ordination mechanisms between
Extreme weather events can be particularly disruptive
local, regional, and national authorities in the state
to complex urban systems and areas of high population
of California (United States), Canada, France, and
density. Much of the world’s urban population inhabits
Germany, the paper demonstrates that the development
low-lying coastal areas, making them more vulnerable
of NDCs provides a unique opportunity for co-ordination
to storm surges and rising sea levels. Many of these
and alignment across levels of government. The paper
low-lying urban areas are also rapidly expanding,
also analyses current climate mitigation investments,
which compounds risks. Cities in developing countries
by applying the OECD Recommendation on Effective Public
are particularly vulnerable to flood risks, as they are
Investment across Levels of Government.
relatively less equipped to prepare for and address the fallout from disasters.
By moving from a linear to a circular economy, cities and regions can greatly contribute to the reduction of
Building Resilient Cities: An Assessment of Disaster Risk
greenhouse gas emissions. Ongoing work on Economics
Management Policies in Southeast Asia (forthcoming)
and Governance of Circular Economy in Cities aims to
focuses on national and subnational policy approaches
identify the state of the art of the circular economy in
to enhancing urban resilience. It provides a framework
cities, challenges and best practices.
for assessing disaster risk management policies in cities, and presents the results of assessments and
Managing water in cities
tailored policy recommendations for five cities of different institutional, geographic, socio-economic
Cities face growing water-related challenges, such as
and environmental contexts in Southeast Asia. The
implementing more-stringent health and environmental
study was conducted by the OECD with the support
standards, diffuse pollution, competition to access water
of the Global Initiative on Disaster Risk Management
resources, increased intensity and frequency of extreme
(GIDRM), a project commissioned by the German Federal
weather (affecting precipitation and evaporation), and
Ministry of Economic Cooperation and Development
higher uncertainty about future water availability and
(BMZ) and the Deutsche Gesellschaft für Internationale
demand. Cities in OECD countries face a particular
Zusammenarbeit (GIZ) GmbH.
challenge in that most are locked-in to specific technical trajectories. Retrofitting existing infrastructure to
Improving governance and policy alignment at the subnational level
address new and emerging pressures is particularly
Cities and regions play a key role in climate action. It is
The report Water and Cities: Ensuring Sustainable Futures
estimated that 50 to 80% of adaptation and mitigation
explores policy responses at both the central and
actions are, or will be, implemented at the regional and
local government levels and focuses on four mutually
local level.1 Multi-level governance is increasingly a feature
dependent dimensions: finance, innovation, urban-
expensive and technically difficult.
rural linkages, and governance. The report builds on 1. Networks of regional government for sustainable development (nrg4SD) (2016), Regions Adapt 2016 Report: An assessment of risks and actions, available at: http://www.nrg4sd.org/regionsadapt2016report/.
OECD work on water economics and governance. It includes detailed case studies from ten cities on the CITIES AND REGIONS . 27
Cities and regions
water challenges they face, the innovative responses
long-term impacts that will determine the economic and
they are putting in place, and the barriers that had to be
environmental outcomes of the future.
overcome to implement these responses. Ongoing work focuses on investigating the long-term
Strengthening Spatial Planning
consequences of potential land-use and transport policy choices through the application of an integrated land-use
The OECD is currently investigating how cities can tackle
and transport model (MOLES) to specific city contexts.
climate change through the Spatial Planning Instruments
Every city case study aims at deriving evidence-based
and the Environment (SPINE) project. SPINE examines
conclusions regarding the long-run effect of relevant
the urban form in OECD countries to identify how the
policy instruments on the shape of future cities and their
organisation of built environment affects the energy
carbon footprint. These instruments include tools such
needs of modern cities, their dependency on private
as road pricing, parking fees, incentives for the adoption
modes of transportation and, in turn, their CO2 footprint.
of electric vehicles, zero-emission zones, density regulations and property taxation.
Spatial planning and land-use policies play a crucial role in managing the trade-offs between environmental,
The first city case study assesses pathways to reduce
economic and social objectives. These policies are
emissions in Auckland, New Zealand. Auckland is a
becoming increasingly important, as demand for
representative example of a city low population density,
housing, food, services and infrastructure grows. It is
high population growth and structural car dependency.
essential to design and implement the right policies
The second city case study looks at the case of Santiago,
today as spatial planning and land-use policies have
Chile. It aims to identify synergies and possible trade-offs
28 . OECD WORK IN SUPPORT OF CLIMATE ACTION
between reducing greenhouse gas emissions and tackling
Linking rural development with the transition to a carbon neutral economy
KEY PUBLICATIONS Delivering inclusive climate action in regions and cities OECD (2019), “Financing climate objectives in cities and regions to deliver sustainable and inclusive growth”, OECD Environment Policy Papers, No. 17, OECD Publishing, Paris, https://doi.org/10.1787/ee3ce00b-en.
Rural regions are home to one-quarter of the population
OECD (2018), Inclusive Growth in Seoul, Korea, OECD Publishing, Paris, https://doi.org/10.1787/9789264290198-en.
air pollution at the urban level. Both studies are due to be published in 2020.
and contain the vast majority of the land, water and other natural resources in OECD countries. They are complementary to cities through links related to the flow of people, goods and services. Rural economies and livelihoods are closely connected to their natural resource endowments and specialisation in resourcebased industries (agriculture, forestry, fisheries, mining and energy). These industries are highly sensitive to climate change. Increasing frequency and intensity of extreme weather events, as well as increased drought heavily affect rural infrastructure and economies. Further, rural areas are disproportionately affected by policy efforts to decarbonise the economy. Carbon intensive rural industries like agriculture, mining and energy are important employers in regions with low economic diversity. Measures to decarbonise the economy, for instance by phasing out certain industries, threaten local livelihoods and prosperity. Similarly, putting a price on carbon effects rural households and firms who are reliant on car and truck transportation and have limited alternatives. Overall, rural economies are less resilient than urban economies in responding to these challenges, especially because their economies are less diverse, more remote and with lower levels of human capital. Linking Renewable Energy to Regional Development focuses on how regional policy can reconcile energy security, climate change mitigation, and job creation in rural areas from developing renewable energy. It identifies potential complementarities among the three objectives und underlines the need for a shift in approach to rural development policy in many OECD countries. Mining Regions and Cities aims to develop guidelines on better regional development in the mining and extractives context. In light of the need to shift to a carbon neutral economy, the project highlights how regions specialised
OECD (2016), Making Cities Work for All: Data and Actions for Inclusive Growth, OECD Publishing, Paris, https://doi.org/10.1787/9789264263260-en. OECD (2015), All on Board: Making Inclusive Growth Happen, OECD Publishing, Paris, https://doi.org/10.1787/9789264218512-en. Building resilient cities OECD (2018), Building Resilient Cities: An Assessment of Disaster Risk Management Policies in Southeast Asia, OECD Publishing, Paris, www.oecd.org/publications/building-resilient-cities-9789264305397en.htm. Improving policy alignment and governance at the local level OECD (forthcoming), Delivering the Paris Agreement Through a Wholeof-Government Approach, OECD Publishing, Paris. Managing water in cities OECD (2019), Enhancing the Economic Regulatory System for Moldova’s Water Supply and Sanitation, OECD Studies on Water, OECD Publishing, Paris, https://doi.org/10.1787/8696bde7-en. OECD (2016), OECD Council Recommendation on Water, www.oecd.org/environment/resources/Council-Recommendation-onwater.pdf. OECD (2015), Water and Cities: Ensuring Sustainable Futures, OECD Studies on Water, OECD Publishing, Paris, https://doi.org/10.1787/9789264230149-en. OECD (2013), Water and Climate Change Adaptation: Policies to Navigate Uncharted Waters, OECD Studies on Water, OECD Publishing, Paris, https://doi.org/10.1787/9789264200449-en. Regions OECD (2012), Linking Renewable Energy to Regional Development, OECD Publishing Paris, https://dx.doi.org/10.1787/9789264180444-en Strengthening Spatial Planning OECD (2018), Rethinking Urban Sprawl: Moving Towards Sustainable Cities, OECD Publishing, Paris, https://doi.org/10.1787/9789264189881-en.
in the extraction of hydrocarbons face adjustment costs, while others can profit from mining associated with a growing market for metals needed for the generation of hydro, wind and solar power. CITIES AND REGIONS . 29
Cities and climate change
KEY WEBSITES Greening Cities, Communities and Regions – www.oecd.org/regional/greening-cities-regions/ Seoul Implementation Agenda – www.oecd-inclusive.com/ champion-mayors-doc/seoul-implementation-agenda.pdf OECD Case Study of Inclusive Growth in Seoul – www.oecdinclusive.com/champion-mayors-doc/seoul-policy-highlights.pdf Champion Mayors Platform – www.oecd-inclusive.com/champion-mayors/ Roundtable on Financing Water – www.oecd.org/environment/ resources/roundtableonfinancingwater.htm SPINE – www.oecd.org/env/tools-evaluation/spine-spatial-planninginstruments-and-the-environment.htm Mining regions and cities – www.oecd.org/cfe/regional-policy/ mining-regions-project.htm CONTACTS Inclusive climate action in cities: Aziza Akhmouch – Aziza.Akhmouch@oecd.org Nicolina Lamhauge – Nicolina.Lamhauge@oecd.org Building resilient cities: Tadashi Matsumoto – Tadashi.Matsumoto@oecd.org Improving governance and policy alignment at the local level: Tadashi Matsumoto – Tadashi.Matsumoto@oecd.org Oriana Romano – Oriana.Romano@oecd.org Water and cities: Xavier Leflaive – Xavier.Leflaive@oecd.org SPINE project: Walid Oueslati – Walid.Oueslati@oecd.org Subnational climate finance: Dorothée Allain-Dupré – Dorothee.Allain-Dupre@oecd.org Mining regions and cities: Jose Enrique Garcilazo – JoseEnrique.Garcilazo@oecd.org Chirs McDonald – ChrisMcDonald@OECD.org
30 . OECD WORK IN SUPPORT OF CLIMATE ACTION
FURTHER READING Intergovernmental Panel on Climate Change (IPCC) IPCC (2018), Global Warming of 1.5 °C: an IPCC special report on the impacts of global warming of 1.5 °C above pre-industrial levels and related global greenhouse gas emission pathways, in the context of strengthening the global response to the threat of climate change, sustainable development, and efforts to eradicate poverty, www.ipcc.ch/report/sr15/
Vallejo, L., S. Moarif and A. Halimanjaya (2017), “Enhancing mitigation and finance reporting”, OECD/IEA Climate Change Expert Group Papers, OECD Publishing, Paris, http://dx.doi.org/10.1787/2227779X. Moving to low-emissions pathways Dellink, R., et al. (2017), “International trade consequences of climate change”, OECD Trade and Environment Working Papers, No. 2017/01, OECD Publishing, Paris, http://dx.doi.org/10.1787/9f446180-en.
Climate action and the economy IEA (2017), Chapters 1 and 2 in Perspectives for the Energy Transition: Investment Needs for a Low-Carbon Energy System, International Energy Agency/OECD Publishing, Paris, www.energiewende2017.com/wp-content/ uploads/2017/03/Perspectives-for-the-Energy-Transition_ WEB.pdf.
Marten, M. and K. van Dender (2019), “The use of revenues from carbon pricing”, OECD Taxation Working Papers, No. 43, OECD Publishing, Paris, https://doi.org/10.1787/3cb265e4-en.
NEA (2019), The Costs of Decarbonisation: System Costs with High Shares of Nuclear and Renewables, OECD Publishing, Paris, https://doi.org/10.1787/9789264312180-en.
OECD (2015), Climate Change Mitigation: Policies and Progress, OECD Publishing, Paris. http://dx.doi.org/10.1787/9789264238787-en
NEA (2018), The Full Costs of Electricity Provision, OECD Publishing, Paris, https://doi.org/10.1787/9789264303119-en.
OECD (2015), The Economic Consequences of Climate Change, OECD Publishing, Paris. http://dx.doi.org/10.1787/9789264235410-en
OECD (2015), Aligning Policies for a Low-carbon Economy, OECD Publishing, Paris, http://dx.doi.org/10.1787/9789264233294-en.
Van Dender, K. (2019), “Taxing vehicles, fuels, and road use: Opportunities for improving transport tax practice”, OECD Taxation Working Papers, No. 44, OECD Publishing, Paris, https://dx.doi.org/10.1787/e7f1d771-en.
OECD (2019), Business Models for the Circular Economy: Opportunities and Challenges from a Policy Perspective, OECD Publishing, Paris, https://doi.org/10.1787/g2g9dd62-en
International climate negotiations Moarif, S. (2017), “Information needed for the clarity, transparency and understanding (CTU) of mitigation contributions”, OECD/IEA Climate Change Expert Group Papers, No. 2017/01, OECD Publishing, Paris, http://dx.doi.org/10.1787/2227779X.
Green finance and investment OECD (2019), Promoting Clean Urban Public Transportation and Green Investment in Moldova, Green Finance and Investment, OECD Publishing, Paris, https://doi.org/10.1787/31925aae-en.
OECD (2017), OECD DAC Rio Markers for Climate: Handbook, OECD, Paris, www.oecd.org/dac/environment-development/Revised%20 climate%20marker%20handbook_FINAL.pdf.
OECD (2019), Promoting Clean Urban Public Transportation and Green Investment in Kyrgyzstan, Green Finance and Investment, OECD Publishing, Paris, https://doi.org/10.1787/b6b91b9a-en.
Vaidyula, M. and J. Ellis (2017), “Information needs for the 2018 facilitative dialogue: issues and options”, OECD/IEA Climate Change Expert Group Papers, OECD Publishing, Paris, http://dx.doi.org/10.1787/2227779X.
OECD (2019), Promoting Clean Urban Public Transportation in Kazakhstan, Kyrgyzstan and Moldova: Summary Report of Project Implementation 2016-2019, Green Finance and Investment, OECD Publishing, Paris, https://doi.org/10.1787/fcb6c9de-en. FURTHER READING . 31
Further reading
OECD (2018), Access to Private Finance for Green Investments: Energy Efficiency and Renewable Energy Financing in Ukraine, Green Finance and Investment, OECD Publishing, Paris, https://doi.org/10.1787/9789264303928-en. OECD (2018), Energy Subsidy Reform in the Republic of Moldova: Energy Affordability, Fiscal and Environmental Impacts, Green Finance and Investment, OECD Publishing, Paris, https://doi.org/10.1787/9789264292833-en. OECD (2018), Mobilising Finance for Climate Action in Georgia, Green Finance and Investment, OECD Publishing, Paris, https://doi.org/10.1787/9789264289727-en. OECD (2018), Strengthening Shardara Multi-Purpose Water Infrastructure in Kazakhstan, OECD Studies on Water, OECD Publishing, Paris, https://doi.org/10.1787/9789264289628-en. Climate resilience and adaptation Kato, T. and J. Ellis (2016), “Communicating progress in national and global adaptation to climate change”, OECD/ IEA Climate Change Expert Group Papers, No. 2016/01, OECD Publishing, Paris, http://dx.doi.org/10.1787/5jlww009v1hj-en. OECD (2018), Preventing the Flooding of the Seine in the Paris–Ile de France Region: Progress Made and Future Challenges, OECD Publishing, Paris, https://doi.org/10.1787/9789264289932-en. OECD (2017), OECD Review of Risk Management Policies Morocco, OECD Publishing, Paris, https://doi.org/10.1787/9789264276482-en.
Land-use, ecosystems and agriculture Hardelin, J. and J. Lankoski (2018), “Land use and ecosystem services”, OECD Food, Agriculture and Fisheries Papers, No. 114, OECD Publishing, Paris, https://doi.org/10.1787/c7ec938e-en. OECD (2018), Facilitating the Reform of Economic Instruments for Water Management in Georgia, OECD Studies on Water, OECD Publishing, Paris. https://doi.org/10.1787/9789264281776-en. OECD (2017), The Land-Water-Energy Nexus: Biophysical and Economic Consequences, OECD Publishing, Paris, http://dx.doi.org/10.1787/9789264279360-en. OECD (2016), Biodiversity Offsets: Effective Design and Implementation, OECD Publishing, Paris, https://doi.org/10.1787/9789264222519-en. OECD reports on the governance of land-use www.oecd.org/gov/governance-of-land-use.htm Cities and climate change Cárdenas Rodríguez, M., L. Dupont-Courtade and W. Oueslati (2015), “Air Pollution and Urban Structure Linkages: Evidence from European Cities”, OECD Environment Working Papers, No. 96, OECD Publishing, Paris, https://doi.org/10.1787/5jrp6w9xlbq6-en. OECD (forthcoming), Decarbonising Urban Mobility with Land Use and Transport Policies: The Case of Auckland, OECD Publishing, Paris.
OECD (2015), Climate Change Risks and Adaptation: Linking Policy and Economics, OECD Publishing, Paris, http://dx.doi.org/10.1787/9789264234611-en.
Green Growth Studies OECD (2019), Addressing Industrial Air Pollution in Kazakhstan: Reforming Environmental Payments Policy Guidelines, OECD Green Growth Studies, OECD Publishing, Paris, https://doi.org/10.1787/0e04ea86-en
OECD (2015), National Climate Change Adaptation: Emerging Practices in Monitoring and Evaluation, OECD Publishing, Paris, https://doi.org/10.1787/9789264229679-en.
OECD (2019), Mining and Green Growth in the EECCA Region, OECD Green Growth Studies, OECD Publishing, Paris, https://doi.org/10.1787/1926a45a-en.
32 . OECD WORK IN SUPPORT OF CLIMATE ACTION
“Ambitious climate policy is simply good policy.”
Angel Gurría – OECD Secretary-General
For more information: oe.cd/climate-action @OECD_ENV © OECD Environment Directorate, December 2019 d . OECD WORK IN SUPPORT OF CLIMATE ACTION