Inclusive Green Growth: For the Future We Want (2012)

INCLUSIVEGREEN GROWTH:FOR THE FUTUREWE WANTOECD WORK

2012

Rio+20 brochure [f] [update 1]_Layout 1 06/07/2012 10:05 Page 47

This work is published on the responsibility of the Secretary-General of the OECD. The opinions expressed

and arguments employed herein do not necessarily reflect the official views of the Organisation or of the

governments of its member countries.

© OECD 2012

OECD freely authorises the use of this material for non-commercial purposes. All requests for commercial

uses of this material or for translation rights should be submitted to [email protected].

Brochure design by Baseline Arts

Contents

Message from the OECD Secretary-General 1

An urgent call for action 2

What is green growth and how can it help deliver sustainable development? 8

The elements of successful green growth strategies 10

Integrating green growth into government policies 23

International co-operation for green growth 26

Measuring well-being and progress towards greener growth 32

Transforming sectors 36

OECD EPOC Ministerial Policy Statement to the Rio+20 Conference 41

OECD DAC Policy Statement for the Rio+20 Conference 43

Rio+20 brochure [f] [update 1]_Layout 1 06/07/2012 10:02 Page B

The first Rio Summit in 1992 was historic for arguingthat development has to be sustainable, and that to besustainable, it must integrate the environmental withthe social and the economic dimensions. Twenty yearson, that is still a powerful message, but sustainabledevelopment is not a reality. The Rio+20 Conferenceprovides an opportunity to change that by setting outways to move from a concept to practical proposals formaking it happen.

There has been significant progress over the past 20years. While the world’s population has increased by athird, world GDP has tripled, helping millions of peopleto work their way out of poverty. The number of childrenin developing countries who die before the age of fivedropped from 100 to 72 per 1 000 live births between1990 and 2008, and around 90% of children in developingcountries are now enrolled in primary school.

However, economic expansion has come at a price to theplanet. If we do not protect the environment and itsnatural resources, this expansion could grind to a haltbecause we will have destroyed or permanently damagedthe water and mineral resources, ecosystem diversityand other natural foundations on which our well-beingrelies.

If we do not change course, the impact on our quality oflife and health will be significant, with an increasingeconomic burden. More and more financial and humanresources will need to be spent to make enough wateravailable and drinkable, keep the land productive, ensurethat the air is breathable, and supply industry with theraw materials it needs.

Inclusive green growth offers an optimistic, realisticalternative to countries looking for new sources of growththat make economic, environmental and social sense.Green growth is not a replacement for sustainabledevelopment. Together with innovation, going green canbe a long-term driver for economic growth.

The OECD Green Growth Strategy provides a clearframework for how countries can achieve economicgrowth and development while preventing costlyenvironmental degradation, climate change andinefficient use of natural resources. The Strategy identifiescommon principles and challenges but shows that thereis no one-size-fits-all prescription for implementing greengrowth. Each country needs to devise a strategy tailored toits own circumstances. In all cases, to be sustainable,strategies have to be inclusive and open. Growth has toreduce inequality and the tensions it generates. “Green”cannot be an excuse for protectionism, depriving citizensof choice, driving up costs and stifling innovation.

However, even the best policies are nothing without thepolitical will to implement them. In 2011, Ministersmeeting at the OECD welcomed the Green GrowthStrategy as a growth strategy first and foremost, andstressed that green growth tools and indicators have thepotential to unlock new growth engines and jobopportunities. In 2012, the Mexican presidency of the G20has established green growth as one of its priorities.

It is a key priority for the OECD too. We are exploring howgreen growth strategies can be applied in the specificcontext of developing countries and emerging-marketeconomies. And we will continue to work with our membersand partner countries to design cost-effective and politicallyimplementable policy measures; robust indicators, data andmechanisms to help track progress; and dedicatedplatforms and innovative ways to facilitate knowledge-sharing and co-operation at the international level.

I wish Rio+20 every success in helping to make life betterfor us all and for future generations.

Angel GurríaOECD Secretary-General

OECD RIO+20 . 1

Message from the OECD

Secretary-GeneralInclusive green growth for a fairer,cleaner, stronger economy


Yet the fruits of this economicgrowth have not been equallydistributed and poverty eradicationstill remains a pressing concern inmany parts of the world. Thedistributional patterns of that growth,as reflected in wealth accumulationand well-being, has seen income andequity gaps widen in both developingand developed countries.

Today in advanced economies, theaverage income of the richest 10% ofthe population is about nine timesthat of the poorest 10%. Emergingeconomies have achieved dramaticreductions in poverty, yet incomeinequality, which was already high,has worsened over the last decade.Rising inequality creates economic,social and political challenges,including affecting economicperformance as a whole and fuellingprotectionist sentiments.

Even in traditionally moreegalitarian countries – such asGermany, Denmark and Sweden –the income gap between rich andpoor is expanding – from 5 to 1 inthe 1980s to 6 to 1 today. It is 10to 1 in Italy, Japan, Korea and theUnited Kingdom, has risen to 14 to1 in Israel, Turkey and the UnitedStates and has reached more than25 to 1 in Mexico and Chile.

An urgent call for action

South Africa

Brazil

Argentina

RussianFederation

China

India

Indonesia

OECD

0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8

Late 2000s Early 1990s

The OECD study Divided We Stand: Why Inequality Keeps Rising (2012) reveals that

the gap between rich and poor has widened in most advanced and emerging

economies. It analyses the major underlying forces behind these developments

and discusses the most promising policies to counter increases in inequalities and

how the policy mix can be adjusted when public budgets are under strain.

www.oecd.org/els/social/inequality

DIVIDED WE STAND

CHANGE IN INEQUALITY LEVELS, EARLY 1990s VERSUS LATE 2000s

Gini coefficient of household income

Since the Rio Summit in 1992, some impressive progress has been achieved on the

road to sustainable development. From 1992 to 2010, world GDP increased by

almost 75% and GDP per capita by 40%, bringing with it widespread improvements

in living standards while helping to lift hundreds of millions of people out of

extreme poverty.

An

urgen

t call for action

Notes: Figures for the early 1990s generally refer to 1993, whereas figures for the late 2000sgenerally refer to 2008.

Gini coefficients are based on equivalised incomes for OECD countries and per capita incomesfor all emerging economies except India and Indonesia for which per capita consumptionwas used.

Source: OECD-EU Database on Emerging Economies and World Bank Development IndicatorsDatabase.

2 . INCLUSIVE GREEN GROWTH


At the same time, growth patternshave incurred significantenvironmental costs. Natural assetshave been and continue to bedepleted, with the ecosystemsservices they deliver alreadycompromised by environmentalpollution.

Providing for a further 2 billionpeople by 2050 and improvingliving standards for all willchallenge our ability to manageand restore those natural assets onwhich all life depends. Failure to doso will have serious consequences,especially for the poor, andultimately undermine economicgrowth and human development.

OECD RIO+20 . 3

While China, India, the RussianFederation and South Africa haveseen strong economic expansionover the last decade, they havealso recorded steep increases ininequality levels in this time. InIndonesia and Brazil, however,strong output growth went hand-to-hand with declining incomeinequality. But the gap betweenrich and poor is still high inBrazil, at 50 to 1.

Finding out more

www.oecd.org/economy/goingforgrowth/inequality

Going for Growth. Chapter on Reducing income inequality while boostingeconomic growth: Can it be done? (OECD, 2012)

Perspectives on Global Development 2012: Social Cohesion in a Shifting World(OECD, 2012)

The Impact of Publicly Provided Services on the Distribution of Resources:Review of New Results and Methods, OECD Social, Employment and MigrationWorking Papers No. 130 (OECD, 2012)

Tackling Inequalities in Brazil, China, India and South Africa - The Role ofLabour Market and Social Policies (OECD, 2010)

OECD publications are available for free preview at www.oecd-ilibrary.org


4

An

urgen

t call for action

SOCIO-ECONOMIC DEVELOPMENTSTO 2050By 2050, the Earth’s population isexpected to increase from 7 billionto over 9 billion and the worldeconomy is projected to nearlyquadruple, with growing demandfor energy and natural resources asa result. While growth will still behigh, average GDP growth rates areprojected to slow in China and India.Africa could see the world’s highestgrowth rates between 2030 and 2050.

OECD countries are expected to haveover a quarter of their populationaged over 65 years in 2050,compared with 15% today. China andIndia are also likely to see significantpopulation ageing, while moreyouthful populations in other partsof the world, especially Africa, areexpected to grow rapidly. Thesedemographic shifts and higher livingstandards imply evolving lifestylesand consumption patterns, all ofwhich will have significantconsequences for the environment.Nearly 70% of the world’s populationis projected to live in urban areas by2050, exacerbating challenges suchas air pollution, transportcongestion, and waste management.

The OECD Environmental Outlook to 2050: The Consequences of Inaction (2012) projectsdemographic and economic trends over the nextfour decades, using joint modelling by the OECDand the Netherlands Environmental AssessmentAgency (PBL). It assesses the impacts of thesetrends on the environment if we do not introducemore ambitious policies to better manage naturalassets, and examines some of the policies thatcould change that picture for the better. TheOutlook focuses on four areas: climate change,biodiversity, water and the health impacts of pollution. It concludes thaturgent action is needed now to avoid significant costs of inaction, both ineconomic and human terms.

www.oecd.org/environment/outlookto2050

Without more effective policies, aworld economy four times largerthan today is projected to use 80%more energy in 2050. It is projectedthat the share of fossil-fuel basedenergy in the global energy mix willstill remain at about 85%. The majoremerging economies are projected tobecome major energy users. To feeda growing population with changingdietary preferences, global use ofagricultural land is projected toexpand in the next decade.

In the absence of new policyaction, the OECD projects thatpressures on the environmentfrom population growth and risingliving standards will outpaceprogress in pollution abatementand resource efficiency. Continueddegradation and erosion of naturalenvironmental capital is expectedby 2050 as a result, with the risk ofirreversible changes that couldendanger centuries of rising livingstandards.


OECD RIO+20 . 5

50

2010 20202015 2025 2030 2035 2040 2045 2050

100

150

200

250

300

350

400GDP -5.5%

Ind

ex 2

010 =

100

GHG emissions -69.5%

Baseline scenario

450 ppm core scenario

Source: OECD Environmental Outlook to 2050: The Consequences of Inaction (OECD, 2012); outputfrom OECD ENV-Linkages model.

WHAT WOULD IT COST TO FIGHT CLIMATE CHANGE?450 Core scenario: global emissions and cost of mitigation

IT PAYS TO ACT NOW

Acting now makes environmental and economic sense. In the case of climate,

if countries act now, there is still a chance – although it is receding – of global

GHG emissions peaking before 2020 and limiting the world’s average

temperature increase to 2° C. The OECD Environmental Outlook to 2050 suggests

that a global carbon price sufficient to lower GHG emissions by nearly 70% in

2050 compared with the baseline scenario and limit GHG concentrations to

450 parts per million (ppm) would slow economic growth by only

0.2 percentage points per year on average. Global GDP would still almost

quadruple. The difference pales alongside the potential cost of inaction on

climate change, which some estimate could be as high as 14% of average world

consumption per capita. The Outlook also suggests that the benefits of making

further air pollution reductions in the BRIICS could outweigh the costs by 10 to

1 by 2050. Investing in safe water and sanitation in developing countries can

yield benefit-to-cost ratios as high as 7 to 1.


WHAT WOULD THE ENVIRONMENTLOOK LIKE IN 2050 IF CURRENTPOLICIES ARE MAINTAINED?More disruptive climate change islikely to be locked in, with globalgreenhouse gas (GHG) emissionsprojected to increase by over 50%.The global average temperatureincrease is projected to be 3o C to6o C above pre-industrial levels bythe end of the century. The GHGmitigation actions pledged bycountries in the Cancún Agreementsat the United Nations ClimateChange Conference in 2010 will notbe enough to prevent the globalaverage temperature from exceedingthe internationally agreed goal of2o C, unless very rapid and costlyemission reductions are realisedafter 2020. Surpassing the 2o Cthreshold would alter precipitationpatterns, increase glacier andpermafrost melt, drive sea-level rise,and the intensity of extremeweather events. This will hamperthe ability of people and ecosystemsto adapt.

Biodiversity loss is projected tocontinue, especially in Asia, Europeand Southern Africa. Globally, terrestrial biodiversity(measured as mean speciesabundance – or MSA – an indicatorof the intactness of a naturalecosystem) is projected to decreaseby a further 10% by 2050. Matureforests are projected to shrink inarea by 13%. Climate change isprojected to become the fastestgrowing driver of biodiversity loss by2050. Declining biodiversitythreatens human welfare, especiallyfor the rural poor and indigenouscommunities whose livelihoodsoften depend directly on naturalresources and well-functioningecosystems services.

6 . INCLUSIVE GREEN GROWTH: FOR THE FUTURE WE WANT

An

urgen

t call for action

0

20

40

60

80

10

2010 2015 2020 2025 2030 2035 2040 2045 2050

GtC

O2e

RoW

Rest of BRIICS

Russia & rest of A1

OECD A1

Infr+Encr+Frag

OECD BRIICS RoW World

Climate changeNitrogenFormer land-use

Pasture ForestryBioenergyFood cropRemaining MSA

0-50%

70%

80%

60%

90%

100%

20

10

20

30

20

50

20

10

20

30

20

50

20

10

20

30

20

50

20

10

20

30

20

50

MS

A

Note: MSA of 100% is equivalent to the undisturbed stateInfr+Encr+Frag stands for Infrastructure, encroachment and fragmentation

GHG EMISSIONS BY REGION

EFFECTS OF DIFFERENT PRESSURES ON TERRESTRIAL MSA

Notes: A1: Group of countries that are part of Annex 1 of the Kyoto Protocol Rest of BRIICS: Country group including Brazil, China, India, Indonesia and South Africa ROW: Rest of the world GtCO2e: Giga tonnes of CO2 equivalent


OECD RIO+20 . 7

Freshwater availability will befurther strained in many regions,with 2.3 billion more people thantoday – in total over 40% of theglobal population – projected to beliving in river basins under severewater stress, especially in Northand South Africa, and South andCentral Asia. Global water demandis projected to increase by 55%,intensifying competition amongusers. Environmental water flowswill be contested, puttingecosystems at risk. Pollution fromurban wastewater and agricultureis projected to worsen in mostregions, increasing eutrophicationand damaging aquatic biodiversity.Globally more than 240 millionpeople are expected to be withoutaccess to an improved water sourceby 2050, and 1.4 billion people stillwithout access to basic sanitation.

Sub-Saharan Africa is unlikelyto meet the MDG of halving the1990 level of the populationwithout access to an improvedwater source by 2015.

Air pollution is set to become theworld’s top environmental causeof premature mortality. Airpollution concentrations in somecities, particularly in Asia, alreadyfar exceed World HealthOrganization safe levels. By 2050,the number of premature deathsfrom exposure to particulatematter is projected to more thandouble to 3.6 million a yearglobally, with most deathsoccurring in China and India. Theburden of disease related toexposure to hazardous chemicalsis significant worldwide, but mostsevere in non-OECD countrieswhere chemical safety measuresare still insufficient.

GLOBAL WATER DEMAND

2000 2050 2000 2050 2000 2050 2000 20500

1000

2000

3000

4000

5000

OECD BRIICS RoW WORLD

6000

Domestic

Manufacturing

Livestock

Electricity

Irrigation

Km

3

0.0

Malaria

Indoor airpollution

Unsafe watersupply and sanitation*

Ground-levelozone

Particulatematter

0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0

2030

2010

2050

Deaths (millions of people)

Note: This graph only measures ‘blue water’ demand and does not consider rainfedagriculture.

Note: *Child mortality only

Source: OECD Environmental Outlook to 2050: The Consequences of Inaction (OECD, 2012); outputsfrom IMAGE and ENV-Linkages models.

GLOBAL PREMATURE DEATHS FROM ENVIRONMENTAL RISKS

About one-third of globalfreshwater biodiversity hasalready been lost, and furtherloss is projected to 2050.


Twenty years after the first RioSummit, the world continues to facea twin challenge: expandingeconomic opportunities for all in thecontext of a growing globalpopulation; and addressingenvironmental pressures that, if leftunaddressed, could undermine ourability to seize these opportunities.

Green growth is where these twochallenges meet and it is aboutexploiting the opportunities torealise the two together.

Green growth means fosteringeconomic growth anddevelopment while ensuring thatnatural assets continue to providethe resources and environmentalservices on which our well-beingrelies.

To do this it must catalyseinvestment and innovation whichwill underpin sustained growth andgive rise to new economicopportunities.

Green growth is not a replacementfor sustainable development.Rather, it provides a practical andflexible approach for achievingconcrete, measurable progressacross its economic andenvironmental pillars, while takingfull account of the socialconsequences of greening thegrowth dynamic of economies. Thefocus of green growth strategies isensuring that natural assets candeliver their full economic potential

on a sustainable basis. Thatpotential includes the provision ofcritical life support services – cleanair and water, and the resilientbiodiversity needed to support foodproduction and human health.Natural assets are not infinitelysubstitutable and green growthpolicies take account of that.

Green growth policies are anintegral part of the structuralreforms needed to foster strong,more sustainable and inclusivegrowth. They can unlock newgrowth engines by:

� Enhancing productivity by creatingincentives for greater efficiency inthe use of natural resources,reducing waste and energyconsumption, unlockingopportunities for innovation andvalue creation, and allocatingresources to the highest value use.

� Boosting investor confidencethrough greater predictability inhow governments deal with majorenvironmental issues.

� Opening up new markets bystimulating demand for greengoods, services and technologies.

� Contributing to fiscal consolidationby mobilising revenues throughgreen taxes and through theelimination of environmentallyharmful subsidies. These measurescan also help to generate or freeup resources for anti-povertyprogrammes in such areas aswater supply and sanitation, orother pro-poor investments.

� Reducing risks of negative shocks togrowth due to resourcebottlenecks, as well as damagingand potentially irreversibleenvironmental impacts.

What is green growth and how can it

help deliver sustainable development?


Wh

at is green grow

th

In May 2011, the OECD delivered its Green GrowthStrategy to Heads of State and Ministers from overforty countries, who welcomed it as a useful tool forexpanding economic growth and job creationthrough more sustainable use of natural resources,efficiencies in the use of energy, and valuation ofecosystem services.

The Strategy responds to a request from Ministers ofthe 34 countries who signed the Green GrowthDeclaration in 2009, committing to strengthen their efforts to pursue greengrowth strategies as part of their response to the economic crisis and beyond.

www.oecd.org/greengrowth


Strategies for greener growth needto be tailored to fit specific countrycircumstances. They will need tocarefully consider how to manageany potential trade-offs and bestexploit the synergies between greengrowth and poverty reduction. Thelatter include, for example, bringingmore efficient infrastructure topeople (e.g. in energy, water andtransport), tackling poor healthassociated with environmentaldegradation and introducing efficienttechnologies that can reduce costsand increase productivity, whileeasing environmental pressure. Giventhe centrality of natural assets inlow-income countries, green growthpolicies can reduce vulnerability toenvironmental risks and increase thelivelihood security of the poor.

Green growth strategies alsorecognise that focusing on GDP asthe main measure of economicprogress generally overlooks thecontribution of natural assets towealth, health and well-being. Theytherefore need to rely on a broaderrange of measures of progress,encompassing the quality andcomposition of growth, and how thisaffects people’s wealth and welfare.

The OECD is working to identify thepolicy mixes and measurement tools

that countries in different situationscan adopt to implement greengrowth in a way that contributes topoverty eradication, employmentopportunities, and a strong andsustainable economy.

The starting point of OECD workis that there is no “one-size-fits-all” prescription for fosteringgreener growth.

Greening the growth path of aneconomy depends on policy andinstitutional settings, level of

The OECD report on Green Growth and DevelopingCountries (forthcoming) aims to identify promisingareas in which green growth objectives could beachieved and the policies, regulations, technologytransfer, financing and new market and innovationopportunities that could help to deliver them. Itreviews key barriers and includes options for a policyframework and a set of criteria that developingcountries could consider in their efforts towardsgreen growth policy making. Work will alsocommence on how progress could be assessed.

The report is being developed based on a consultative process withdeveloping countries. It aims to provide a platform for developing countrypartners to indicate their interest in collaborating with the OECD to shapea green growth agenda that is feasible and relevant for them and addressesthe aspirations of their citizens.

www.oecd.org/dac/greengrowth

OECD RIO+20 . 9

development, social structures,resource endowments andparticular environmental pressurepoints. Advanced, emerging, anddeveloping countries will facedifferent challenges andopportunities. While national planswill differ, in all cases green growthstrategies need to go hand-in-handwith the main pillars of action topromote social equity: moreintensive human capitalinvestment, inclusive employmentpromotion, and well-designedtax/transfer redistribution policies.


The elements of successful

green growth strategies The OECD Green Growth Strategyprovides an analytical lens that canbe applied to differing country needsand priorities. It helps to identify themost appropriate policy mix foradvancing more sustainable andinclusive growth.

A number of criteria to help guidethe design of policy strategies areproposed, such as: cost-effectiveness,adoption and compliance incentives,and ability to cope with uncertaintyand provide a clear and credible signalto investors. Other important criteriainclude effectiveness in stimulatinginnovation and the diffusion of greentechnologies, and the extent to whichinstruments can be designed andimplemented in a way that facilitatesinternational co-ordination.

Governance issues are also animportant consideration in policydesign and implementation.Difficulties in monitoringenvironmental performance andcompliance, collecting green taxes,adapting new technologies or settingup new markets may influence thechoice of policy instruments incountries with large informaleconomies and where there is weakinstitutional or human capacity.Distributional effects will play anequally important role in policydevelopment, including for theprotection of poor households fromany adverse effects of policy reforms.Successful strategies will likely drawon the key elements identified in thissection.

VALUING NATURAL ASSETS ANDECOSYSTEM SERVICESValuing and properly pricing naturalresources, biodiversity and theecosystem services they provide leadto more sustainable use of thesegoods and services. For example,pricing can be an effective way ofallocating water, particularly whereit is scarce, and for encouragingmore sustainable consumption.Appropriate water tariffs cangenerate the essential financeneeded to help cover the costs ofwater infrastructure, essential toensuring continued and expandedaccess to water supply andsanitation services for all.

Economic instruments also showpromise with respect to biodiversityand other ecosystem services.Estimating the monetary value of theservices provided by ecosystems andbiodiversity can make their benefitsmore visible, and can lead to better,more cost-effective decisions.Creating markets and incentives tocapture these values are animportant element of the greengrowth toolkit, for example throughpayments for ecosystem services(PES) for forests and watersheds,tradable water rights, or through theuse of eco-labelling certificationschemes. OECD policy analysisfocuses on the economic valuation ofbiodiversity and ecosystem services,and the use of economic incentivesand market-based instruments topromote the conservation andsustainable use of biodiversity and


Th

e elemen

ts of successfu

lgreen

growth

strategies

associated ecosystem services. Thiswork supports the UN Convention onBiological Diversity.

Interest in PES has beenincreasing rapidly over the pastdecade, with more than 300programmes being implementedworldwide to date. PESprogrammes in China, Costa Rica,Mexico, the United Kingdom andthe United States alone areestimated to channel over USD6.53 billion annually.

Finding out more

www.oecd.org/env/biodiversity

www.oecd.org/water

Green Growth and Biodiversity,OECD Green Growth Papers (OECD,forthcoming)

Paying for Biodiversity: Enhancingthe Cost-Effectiveness of Paymentsfor Ecosystem Services (OECD, 2010)

Pricing Water Resources and Waterand Sanitation Services, OECDStudies on Water (OECD, 2010)


OECD RIO+20 . 11

The OECD Economic Surveyssystematically assess howenvironmental and growthpolicy recommendationsinteract, including in areassuch as taxation, innovation,infrastructure, energy,agriculture and productmarket regulation. Recentsurveys covering greengrowth include Brazil,Denmark, Germany, India,Korea, Mexico, New Zealand,Poland and the Russian Federation.

The OECD EnvironmentalPerformance Reviewsexamine how countries’environmental policyframeworks can support greengrowth, including throughpricing mechanisms andtransition measures. Recentreviews include Ireland, Israel,Japan, Luxembourg, Norway,Portugal, the Slovak Republic,and Greece.

The OECD report Going forGrowth identifies structuralreform priorities to boost realincome for each OECDcountry and key emergingeconomies. It will start tohighlight policy opportunitiesthat can strengthen growth,improve environmentaloutcomes and identifypossible trade-offs.

In response to countrydemand, the OECDInvestment Policy Reviewsnow seek to help countriesimprove domestic conditionsfor investment in support ofgreen growth objectives. TheInvestment Policy Review ofColombia and forthcomingReviews of Tunisia, Jordan andMalaysia all include a greengrowth focus.

Also based on countrydemand, the OECD Reviews ofInnovation Policy incorporategreen growth considerations intheir recommendations as wellas best practice examples onhow to improve policies whichimpact on innovationperformance, including R&Dpolicies. Recent reviews includeRussia and Peru.

The OECD Green Citiesprogramme assesses theimpact of urban green growthand sustainability policies onurban and national economicperformance andenvironmental quality indifferent geographical,economic and nationalregulatory contexts. A firstround of case studies includedthe Paris-IDF region, theChicago/Tri-State Area and Korea. Case studies ofStockholm, Kitakyushu, Abu Dhabi and China arecurrently underway.

Tailoring green growth policies to individual countries

The OECD is supporting countries in their efforts to design and implement strategies for greener and moreinclusive growth, including through its core advice in country-specific and multilateral surveillance. Throughthese, the OECD is providing guidance tailored to the needs of individual countries.

www.oecd.org/greengrowth/countries



Th

e elemen

ts of successfu

lgreen

growth

strategies

Finding out more

www.oecd.org/env/taxes

Interactions Between EmissionTrading Systems and OtherOverlapping Policy Instruments,General Distribution Document(OECD, 2011)

Taxation, Innovation and theEnvironment (OECD, 2010)

The OECD Environmental Fiscal Reform for PovertyReduction, DAC Guidelines and Reference Series (2005)identifies approaches to fiscal reform for greengrowth that can work well in most developingcountries. The report provides insights and examplesof good practice on using environmental taxation andpricing measures in country development andpoverty reduction strategies. It also looks at thepolitical economy of environmental fiscal reform andthe role of donors in supporting the reform process.

www.oecd.org/dev/poverty

MAKING POLLUTION MORE COSTLYPutting a price on pollution –through carbon taxes or emissionstrading schemes – is a key policy forgreener growth. Pricingmechanisms tend to minimise thecosts of achieving a givenenvironmental objective andprovide incentives for furtherefficiency gains and innovation,encouraging more sustainableproduction and consumptionpatterns. Better pricing of

environmental ‘bads’ cancontribute to improved healthoutcomes through a cleanerenvironment, with positiverepercussions for human capital,labour productivity and reducedhealth-related expenditures.Pricing instruments can alsogenerate additional fiscal revenuesto ease tight government budgetsand help finance critical prioritiessuch as health, education, orinfrastructure development.

A number of countries haveembarked on green tax reforms, oftenusing the revenues raised to reducetaxes on labour which could helpboost employment and encouragegreen growth.

If advanced economies used taxesor auctioned permits to achievethe greenhouse gas emissionreductions they pledged in theCancún Agreements, they couldraise USD 250 billion in revenuesper year by 2020.


OECD RIO+20 . 13

Mex

ico

U

nite

d St

ates

Chi

leC

anad

a*N

ew Z

eala

ndJa

pan

Spai

nA

ustr

alia

Fran

cePo

land

Hun

gary

Slov

ak R

epub

lic*

Switz

erla

ndBe

lgiu

mG

reec

e*Ic

elan

dG

erm

any

Luxe

mb

ourg

Nor

way

Aus

tria

Irel

and

Port

ugal

Uni

ted

King

dom

Ital

ySw

eden

Kore

aFi

nlan

dC

zech

Rep

ublic

Esto

nia

Slov

enia

Isra

elN

ethe

rland

sTu

rkey

Den

mar

k

Wei

ghte

d av

erag

e

Arg

entin

a*Br

azil

Chi

naC

olom

bia

*C

osta

Ric

a*D

omin

ican

Rep

ublic

*G

uate

mal

a*Pe

ru *

Uru

guay

*So

uth

Afr

ica

-0.5

-1.0

Motor vehicles OtherEnergy

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

% o

f GD

P

* 2009 figures

The use of environmentally related taxation (and emission trading systems) has widened in recent years, but there is still

significant scope for increased use of these pricing instruments.

Meanwhile, the revenue from taxes on energy, the most widespread form of environmentally related tax, has tended to decline as

a share of GDP, partly because growing global energy demand has pushed up pre-tax prices and encouraged increased fuel

efficiency – showing the impact of economic incentives.

ENVIRONMENTALLY RELATED TAXES IN PRACTICE

Note: Revenues from motor fuel taxes are included in 'Energy', not in 'Motor vehicles'. Royalties and tax revenues from oil and gasextraction are not included.Source: OECD/EEA database on instruments for environmental policy: www.oecd.org/env/policies/database

REVENUES IN % OF GDP, 2010



Th

e elemen

ts of successfu

lgreen

growth

strategies

REFORMING ENVIRONMENTALLYHARMFUL SUBSIDIESReforming policy-induceddistortions that are damaging bothfor growth and the environment is akey priority within the green growthpolicy mix. Subsidies to fossil fuels,for example, encourage pollutionand constrain the ability ofgovernments to engage inprogrammes that help improve longterm growth prospects such asimproved health and education.There is significant scope forreducing the heavy burden thatthese subsidies place ongovernment budgets, while alsobetter targeting support to thosewho most need it.

Governments and taxpayers spentabout half a trillion USD in 2010supporting the production andconsumption of fossil fuels. For thefirst time ever, the OECD hascompiled an inventory of over 250measures that support fossil-fuelproduction or use in 24industrialised countries, whichtogether account for 95% of theOECD’s total primary energy supply.Those measures had an overallvalue of about USD 45-75 billion ayear between 2005 and 2010. Inemerging and developing countries,the International Energy Agency(IEA) estimated that subsidies tofossil fuel consumption amountedto some USD 409 billion in 2010.

Fossil fuel subsidies encourage thewasteful use of energy, contribute toprice volatility by blurring marketsignals and act to lower the cost-competitiveness of renewableenergy sources and energy-efficienttechnologies. Moreover, they oftenfail to meet their stated objectivesof alleviating poverty or promoting

economic development. The IEAfound that only 8% of the USD 409billion spent on fossil fuelsubsidies in 2010 was distributedto the poorest 20% of thepopulation; other direct forms ofwelfare support would cost muchless and reach the people who needthem most.

OECD analysis suggests that mostcountries or regions would recordreal income gains followingunilateral removal of their subsidiesto fossil fuel consumption, as aresult of a more efficient allocationof resources across sectors. Scarcegovernment resources would befreed up for other priorities, such asprotecting vulnerable households,stimulating employment creation,

or helping to address climate changeat home or in developing countries.

Real income gains from theunilateral removal of fossil fuelconsumption subsidies could beas much as 4% in some countries.At the same time, global GHGemissions would be reduced 6%by 2050 compared with business-as-usual.

Considerable momentum is buildingto cut fossil fuel subsidies, notably inthe G20 forum as well as amongAsia-Pacific Economic Cooperation(APEC) economies. Many countriesare now pursuing reforms, thoughformidable economic, political andsocial hurdles will need to beovercome to realise lasting gains.

To assist governments’ understanding of the natureand scale of their policies supporting fossil fuels, theOECD Inventory of Estimated Budgetary Support andTax Expenditures For Fossil Fuels (2012) containsdetailed information of over 250 mechanisms thatsupport fossil fuel production and use in OECDcountries. The Inventory will be updated regularlyand expanded over time to cover more countries andmore support mechanisms.

www.oecd.org/iea-oecd-ffss

Finding out more

www.oecd.org/g20/fossilfuelsubsidies

An update of the G20 Pittsburgh and Toronto Commitments, joint report byIEA, OPEC, OECD and World Bank on fossil-fuel and other energy subsidies(2011)

Mitigation Potential of Removing Fossil Fuel Subsidies: A General EquilibriumAssessment, OECD Economics Department Working Papers no. 853 (OECD, 2011)


OECD RIO+20 . 15

The OECD and the IEA haveestablished an online database toincrease the availability andtransparency of data on energyconsumer subsidies and measuresthat support the production or useof fossil fuels in OECD countries.The OECD’s Economic Surveys alsoprovide targeted analysis and adviceto countries implementing fossil fuelsubsidy reforms, for example inMexico, India and Indonesia.

In the case of agriculture andfisheries, some support measures tothese sectors may hamper theallocation of scarce resources tomore productive activities, andincrease the pressures on theenvironment, for instance throughelevated GHG emissions, nutrientloading, rates of resource depletionand pressures on land and waterresources. Not all forms of

0

5

10

15

20

25

30

35

40

1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010

% o

f gro

ss r

eceip

ts Potentially most distorting supportPotentially least distorting supportOther

Notes: Potentially most distorting = support based on commodity production and inputs with no constraints attached to their use. Potentially least distorting = support not based on production. Data for 2010 are provisional. Source: OECD PSE/CSE database, 2011.

Finding out more

Decoupling agricultural support:www.oecd.org/agriculture/decoupling

Producer and Consumer SupportEstimates database:www.oecd.org/agriculture/pse

Agricultural Policy Monitoringand Evaluation 2011: OECDCountries and EmergingEconomies (OECD, 2011)

agricultural support areenvironmentally harmful, however,and some support measures arelinked to the achievement of specificenvironmental objectives. OECD workshows that the share of agriculturalsupport that is linked to commodityproduction has decreased (e.g.market price support and associatedtrade barriers, direct productionsupport, or input subsidies) andsupport measures conditional uponmeeting environmental, food safetyand animal welfare requirements orsupport based on the generation ofecosystem services have increased.Targeting policies to specificobjectives is likely to achieve greatereconomic efficiency and betterenvironmental performance. Furtherwork is underway in the OECD todeepen understanding of the linkagesbetween agricultural policies, supportand green growth.

TRANSFERS FROM CONSUMERS AND TAXPAYERS TO AGRICULTURAL PRODUCERS 1986-2010


INNOVATION AND GREENTECHNOLOGY DEVELOPMENT AND DIFFUSION Innovation, involving the creation,diffusion and application of newproducts, processes andtechnologies, can help to achieve thedecoupling of growth fromenvironmental pressures, at thelowest possible cost. Innovation alsoleads to new ideas, newentrepreneurs and business models,contributing to the establishment ofnew markets and eventually to thecreation of new jobs.

The drivers of green innovationdiffer across countries. Advancedand emerging economies can oftenmobilise foreign direct investment,trade and human capital to buildtheir technological and innovationcapacity. However, in manydeveloping countries, innovationtakes place in small firms or in theinformal economy, with less capacityto seek and absorb knowledge. Policyframeworks to foster greeninnovation should be adjusted tonational circumstances, includingthe economic structure, existingcapabilities to innovate, and theinstitutions in place.

Green innovation thrives under thesame conditions as overallinnovation, as the fundamentaldrivers and barriers are similar.Therefore a sound framework forinnovation is important, includingcompetitive markets, openness toforeign trade and investment, and

well-functioning financial markets.Removing barriers to new andyoung firms is particularlyimportant, as these firms tend to bemore responsive to newtechnological or commercialopportunities. Providing effectiveprotection and enforcement ofintellectual property rights (IPR) isessential to encourage thedevelopment and diffusion oftechnologies and to facilitateforeign direct investment andlicensing.

But the rate and pattern of ‘green’innovation is also affected by otherfactors, such as the environmentalpolicy framework. Emission taxesand tradable permit systems provideprice signals that indicategovernments’ commitment togreener growth, giving innovators anincentive to invest in greeninnovation and the flexibility toidentify the best means of meetingenvironmental objectives. Pricesignals enhance efficiency inallocating resources by strengtheningmarkets for green innovation, andwill lower the costs of addressingenvironmental challenges.

But price signals are not sufficient,particularly if breakthroughtechnologies are to be developedand diffused throughout theeconomy. Temporary support forthe development andcommercialisation of greentechnologies will be needed incertain cases as well as public andprivate investment in relevant

research, including in emerging anddeveloping economies that will needto adapt existing technologies totheir own local context.Strengthening markets for greeninnovation is also important, forexample through well-designedpublic procurementstandards and regulation.

Investing only in energy andenvironmental R&D is not enoughto spur green innovation. R&D infields such as chemistry, materialsciences and engineering areequally important sources ofscientific research for greeninventions.

Recent OECD work suggests that thereare significant differences betweenthe effects of different policymeasures depending on the level oftechnological development, so havingthe appropriate mix of policyinstruments is important. Forexample, when a technology is still farfrom being competitive, relative pricesare less important than ambitiousperformance standards, or significantpublic support for research.

More generally, characteristics of thepolicy framework for green growthlike stringency, predictability andflexibility are key for encouraginginnovation and technology transfer.An “unpredictable” policy regimecan slow down technologyinvention and adoption. Forinstance, the increased volatility ofpublic R&D spending has a negativeimpact on innovation.


Th

e elemen

ts of successfu

lgreen

growth

strategies

GREEN INNOVATION IN TOURISMTourism, as a transversal sector interacting with many other industriesand services, can contribute significantly to the shift towards moresustainable, cleaner and low-carbon economic growth. Entrepreneurs andpolicy-makers are increasingly looking at innovation as key to improvingenvironmental performance and achieving sustainable targets. Innovationis also essential to improve existing products and to develop moresustainable tourism products and experiences.

www.oecd.org/cfe/tourism


OECD RIO+20 . 17

15

Pate

nting a

ctivi

ty w

orld

wid

e

(3-y

r m

ovi

ng a

vera

ge in

dexed

on 1

997=

1)

Wind power

Improved combustion/carbon

capture and storage

Air emissions purification

Material recycling

Kyo

to p

roto

col a

dop

ted

Solar photovoltaics

Climate change adaption

All tech. sectors

Electric/Hybrid cars

Energy storage

Wastewater treatment

0

1978 1980 1982 1984 1988 1992 1996 2000 2004 20081986 1990 1994 1998 2002 2006

3

6

9

12

THE IMPORTANCE OF CLEAR POLICY SIGNALS Trends in patenting activity worldwide

Note: Patent counts refer to the number of "claimed priorities", by the first filing date worldwide, shown as 3-year moving averages andindexed on the year 1997.Source: OECD calculations based on data extracted from the EPO Worldwide Patent Statistical Database (PATSTAT, October 2011) usingalgorithms developed at the OECD and the EPO. See Energy and Climate Policy and Innovation: Bending the Trajectory (OECD, 2012).

Although energy and environmentalR&D still account for a small share ofGDP, in recent years governmentshave been promoting increasedinvestment in green technologies,notably in the area of renewableenergy. As competition betweenalternative technological trajectoriesis key, there is a risk thatgovernments will attempt to pickwinners. One way to avoid this is tosupport general infrastructure orbasic conditions for a wide range ofalternative technologies, e.g.advanced grid management systemsthat are needed for a number ofgenerating technologies, or general-purpose technologies such as ICT,industrial biotechnology ornanotechnologies. Good policy designis essential for any support, e.g. inensuring competitive selection

Finding out more

www.oecd.org/environment/innovation

www.oecd.org/sti/innovation/green

Energy and Climate Policy and Innovation: Bending the Trajectory, OECDStudies on Environmental Innovation (OECD, 2012)

Invention and Transfer of Environmental Technologies, OECD Studies onEnvironmental Innovation (OECD, 2011)

Fostering Innovation for Green Growth, OECD Green Growth Studies(OECD, 2011)

processes, focusing on performancerather than specific technologies,avoiding favouring incumbents orproviding opportunities for lobbying,ensuring a rigorous evaluation of

policy impact, and containing costs.Support for commercialisation shouldbe temporary and accompanied byclear sunset clauses and transparentphase-out schedules.


sent to labour and employmentministries reveals that about 60% ofthe responding countries haveimplemented at least one greengrowth labour market measure, withtraining being the most common.The challenges that emerge are:detecting how green growth ischanging labour demand and jobsskill requirements, co-ordinatinglabour market and skill policies withenvironmental policy, and ensuringthat both men and women areequally well-prepared for the shift toa greener economy and that theyboth benefit from new jobs andentrepreneurial opportunities.

Women’s under-representation inscience, technology, engineering andmathematics fields in tertiaryeducation directly limits women’sopportunities to participate in agrowing green labour market. In themajority of OECD countries, fewerthan 30% of tertiary qualifications inthe fields of engineering,manufacturing and constructionand about 40% of tertiaryqualifications in science degreeswere awarded to women.

Gender differences in these subjectchoices are even more distinct invocational training programmes. Ifgreen content is introduced only inscience and engineering orientedvocational programmes, a largeproportion of women will not benefitfrom the training and miss theopportunity to acquire the necessaryskills for new green jobs.

SKILLS DEVELOPMENT ANDLABOUR MARKET POLICIESA successful transition towards agreener economy will create newopportunities for workers, but alsonew risks. The challenge for labourmarket and skill policies is tomaximise the benefits for workersand help assure a fair sharing ofadjustment costs, while alsosupporting broader green growthpolicies (e.g. by minimising skillbottlenecks). The three main policypriorities are:

� support a smooth reallocation ofworkers from declining togrowing firms, while reducing theadjustment costs borne bydisplaced workers

� support eco-innovation and thediffusion of green technologies bystrengthening initial educationand vocational training, andensuring that overly-strictproduct market regulations arenot blunting the incentive toinnovate

� reform tax and benefit systemsfor workers to make sure thatcost pressures generated byenvironmental policies do notbecome a barrier to employment.

There is also need for green-specific labour market and skillpolicies, including top-up trainingfor mid-career workers who needto adapt to greener ways ofworking. An OECD questionnaire


Th

e elemen

ts of successfu

lgreen

growth

strategies

In OECD countries, women have asmaller carbon footprint thanmen. Moreover, women are morelikely to recycle, buy organic foodand eco-labelled products andthey place a higher value onenergy-efficient transport thanmen.

From the demand side, an OECDsurvey of small and medium-sizedenterprises indicates that firms areoften not sufficiently aware of theneed for green skills for the future,and their investment in greentraining or green knowledge-intensive activities is often limited,as is their awareness of the impactof regulations on their industry.

By 2030 employment in the solarand wind electricity sector in theOECD area as a whole could be40% higher than without climatemitigation policies. By contrast,the fossil fuel and coal miningsectors could lose more than 35%of their jobs in the OECD area.


-50

-40

-30

-20

-10

0

10

20

30

40

50Employment Value added

% d

evi

atio

n fro

m t

he B

AU

in 2

03

0

Gas

Co

al

Fo

ssil

fuel b

ased

ele

ctr

icity

Cru

de o

il

Petr

ole

um

&co

al p

rod

ucts

Ric

e

Liv

esto

ck

Oth

er

min

ing

Oth

er

cro

ps

Fo

od

pro

ducts

Fis

heries

Co

nstr

uctio

n &

dw

elling

s

Oth

er

serv

ices

Fab

ricate

d m

eta

lp

rod

ucts

Oth

er

manufa

ctu

ring

Fo

restr

y

Chem

icals

Pap

er

& p

ap

er

pro

ducts

No

n-f

err

ous m

eta

ls

No

n-m

eta

llic m

inera

ls

Iro

n &

ste

el

Tra

nsp

ort

serv

ices

Hyd

ro &

geo

therm

al

ele

ctr

icity

Nucle

ar

po

wer

Co

mb

ustib

le r

enew

ab

les

& w

aste

ele

ctr

icity

So

lar

& w

ind

ele

ctr

icity

WHAT WOULD CLIMATE CHANGE POLICIES MEAN FOR JOBS?

A study using the OECD’s ENV-Linkages model shows that awell-designed emissions trading system could sharply reduceGHG emissions while allowing GDP to keep growing (although at a slightly lower rate). These modelling results also indicate

small net impacts on total employment, but other studies

suggest bigger gains if the right policies are in place. These

studies also show that green growth could be a powerful

weapon to help developing economies in their fight against

underemployment. The key is mobility, with workers able to

move easily from sectors where employment would drop,

notably fossil-fuel industries, to sectors such as renewable

energy industries where job opportunities rise rapidly.

Countries exporting fossil-based energies would be most affected.

Finding out more

Greening jobs and skills: www.oecd.org/greengrowth/skills

OECD Employment Outlook 2012, chapter on green jobs (OECD, forthcoming)

Employment Impacts of Climate Change Mitigation Policies in OECD: A General-Equilibrium Perspective, OECD Environment Working Papers no. 32(OECD, 2011)

Enabling Local Green Growth: Addressing Climate Change Effects on Employment and Local Development, OECD LEED Working Papersno. 2012/01 (OECD, 2012)

Greening Jobs and Skills: Labour Market Implications of AddressingClimate Change, OECD LEED Working Papers no. 2010/02 (OECD, 2010)

SECTORAL CHANGES IN EMPLOYMENT WITH AMBITIOUS CLIMATE CHANGE MITIGATION POLICIES, OECD COUNTRIESIn % deviation from the business-as-usual (BAU) scenario in 2030

The OECD model demonstrates that the impact of GHG

mitigation policy on GDP growth is small when the labour

market adjusts smoothly to employment opportunities and

losses, but that the costs rise significantly when workers in

declining sectors become unemployable elsewhere due to

an incapacity to change and lack of flexibility in labour

markets. One way to combine environmental policy with

measures to help workers take advantage of new

opportunities would be use revenues from carbon taxes to

reduce taxes on labour income. This can generate a

“double-dividend” by delivering both lower GHG emissions

and higher employment.

OECD RIO+20 . 19

Source: OECD ENV-linkages model.


LEVERAGING PRIVATEINVESTMENT FOR GREENINFRASTRUCTURE ANDTECHNOLOGIES Investing in greener infrastructure iscritical for more sustainable growthbecause the choice of infrastructurecan lock-in polluting and climatevulnerable development patterns,and because it accounts for the bulkof investment needed to addresspressing environmental challenges.In addition, infrastructure projectsare particularly vulnerable toclimate change, due to longoperational life times.

In developing countries, where amajor part of the infrastructurerequired for development is still tobe built, there is an opportunity toleap-frog by introducing greener andmore efficient infrastructure. Indeveloped countries, the challenge ismore about renovation andupgrading outdated infrastructure.

Major shifts in long-terminvestments will be required totransform energy, transport, waterand building infrastructure tobecome resource- and energy-efficient and increase the use of

renewable energy. The IEA andothers estimate the investmentrequired is USD 1 trillion per yearglobally, in addition to the OECD’sestimates of global infrastructurerequirements of USD 50 trillion to2030, almost half of which isrequired by 2020.

While private investment in cleanenergy is rising quickly, domesticand international privateinvestment in green infrastructureis still seriously constrained bymarket failures and by activity- andsector-specific investment barriers.


Th

e elemen

ts of successfu

lgreen

growth

strategies

0 1 2 3 4 5 6 7 8 9

Longevity

Transaction cost

Human/operational

Economic/commodity price volatility

Legitimate policy changes

Policy development

Infrastructure

Illegitimate policy changes

Enforcement

Liquidity

Aggregation/commoditisation

Multitude

Institutional - property rights

Additionality

Institutional - regulatory

Inconsistency

MRV

Fungibility

Currency

Complexity

Branding

Cannibalisation

Physical

Technology

Fraud/cash leakage

Level of risk

RANKING OF RISKS IN GREEN FINANCE

Source: Mobilising Private Investment in Green Infrastructure (OECD, forthcoming working paper) (based on data from Standard & Poor’s /Parhelion)


OECD RIO+20 . 21

Finding out more

www.oecd.org/greengrowth/investment

Defining and MeasuringInstitutional Investors’Allocations to Green Investments(OECD, forthcoming workingpaper)

Toward a Policy Framework forGreen Infrastructure Investment(OECD, forthcoming workingpaper)

Role of Institutional Investors inFinancing Clean Energy (OECD,forthcoming working paper)

The Role of Pension Funds inFinancing Green GrowthInitiatives, OECD Working Papers onFinance, Insurance and PrivatePensions, no. 10 (OECD, 2011)

Transition to a Low CarbonEconomy: Public Goals andCorporate Practices (OECD, 2010)

Moreover, country-specific barriersoften limit the attractiveness ofsuch investments, either in termsof the adequacy of returns orunmanageable risk.

Institutional investors – such aspension funds and insurancecompanies– can play an importantrole in financing such green growthinitiatives, which represent apotentially “win-win” long-terminvestment opportunity withsteady income streams. However,less than 1% of pension funds’assets globally are allocated toinfrastructure investment, let aloneto green growth projects. This maybe due to an unsupportiveenvironmental policy backdrop,including regulatory risk anduncertainty, a lack of information,knowledge and expertise about thetype of investment required tofinance green projects, or a lack ofappropriately structured financingvehicles providing the risk/returnprofile required.

Almost 10% of the global burdenof disease could be avoidedthrough investment in betterwater and sanitationinfrastructure and could resultin several million lives beingsaved.

How can governments encourageprivate investments? Governments can aid the transitionby using public funds to mitigatefinancial risk, unlock privateinvestment, promote learning, andbuild institutional and humancapacity to bring abouttransformative change, whiledeveloping a coherent greeninvestment policy framework forlong term financial viability.

The OECD is working to develop anintegrated policy framework thatcan help achieve the common goalof low-carbon, climate resilient(LCR) development and greenergrowth. This includes goal settingacross levels of government;reforming policies to enableinvestment and strengthen marketincentives for LCR infrastructure;and specific financial policies thatprovide transitional support for newgreen technologies, as well asincreasing the social returnsthrough, for example, training andR&D and institutional capacitybuilding; along with promotinggreen business and consumerbehaviour through information andeducation policies.

Other OECD work aims to establishwhat policy signals are required togive institutional investors theconfidence to invest in this space,and to determine the most efficientfinancing tools for leveragingprivate sector financing, as well ashow to track both public and privatesector climate change finance.


GREENING CONSUMERBEHAVIOURHousehold consumption patternsand behaviour are having anincreasing impact on stocks ofnatural resources, environmentalquality and climate change. Inresponse, governments areintroducing measures to encouragepeople to consider theenvironmental effects of theirpurchasing decisions and practices.These include environmentally-related taxes, energy efficiencystandards for homes, CO2 emissionslabels for cars, and financialsupport to invest in solar panels.

Better understanding whatinfluences people’s behaviourtowards the environment can helpgovernments choose the mosteffective policy instruments. OECDsurveys of more than 10 000households across a number of


0%

20%

40%

60%

80%

100%

Australia Canada Chile France Israel Japan Korea Netherlands Spain Sweden Switzerland

Environmental issues should be dealt with primarily by future generations

I am not willing to do anything about the environment if others don't do the same

Environmental impacts are frequently overstated

Environmental issues will be resolved in any case through technological progress

Policies introduced by the government to address environmental issues should not cost me extra money

I am willing to make compromises in my current lifestyle for the benefit of the environment

DO CONSUMERS CARE ABOUT ENVIRONMENTAL ISSUES?Percentage of respondents agreeing with the statements

Source: OECD Greening Household Behaviour: Results of the 2011 Survey (OECD, forthcoming)

Finding out more

www.oecd.org/environment/households

Greening Household Behaviour: TheRole of Public Policy (OECD, 2011)

Consumer Policy Toolkit (OECD, 2010)

Environmental Claims: Findingsand Conclusions of the Committeeof the OECD Committee onConsumer Policy (OECD, 2010)

Th

e elemen

ts of successfu

lgreen

growth

strategies

countries, in the areas of energy,food, transport, waste and water,show that economic incentivesencourage energy savings andinvestment in water-efficientequipment as well as wastegeneration and recycling levels.

Households charged for theirwater on a volume basis consumeapproximately 20% less thanthose who are not charged.

But “soft” policy measures such aslabelling, public informationcampaigns and education can play asignificant complementary role.Initiatives to raise environmentalawareness are crucial, as attitudestowards the environment drivewater-saving behaviours, demand forenergy-efficient appliances, anddecisions to recycle and to consumeorganic food. However, fewhouseholds are prepared to pay

much to use green energy, drivealternative fuel vehicles or consumeorganic food, so using a mix ofinstruments will be key to spurbehavioural change.

60% of people are willing to payextra for the use of renewableenergy in their electricity, but 45%of people who would choose adifferentiated rate for renewableenergy do not have the option todo so.


MAINSTREAMING GREEN GROWTHINTO CORE ECONOMIC POLICIES Having the institutional andgovernance capacity to implementwide-ranging policy reform is anessential condition for greeninggrowth and achieving sustainabledevelopment. Governments need tobe able to integrate green growthobjectives into broader economicpolicymaking and developmentplanning. Developing such capacityis a key structural issue and appliesas much to many OECD countries asit does to developing countries. Thisissue is not restricted to formalnational level planning processes,such as national plans or povertyreduction strategies, but extends topublic financial management

OECD RIO+20 . 23

Finding out more

Environmental Action ProgrammeTask Force: GreeningDevelopment in Eastern Europe,Caucasus and Central Asia:www.oecd.org/env/eap

Green Growth and DevelopingCountries (OECD, forthcoming)

Greening Development: EnhancingCapacity for EnvironmentalManagement and Governance(OECD, 2012)

Green Growth and EnvironmentalGovernance in Eastern Europe,Caucasus, and Central Asia, OECDGreen Growth Papers (OECD, 2012)

Integrating green growth

into government policies

Natural resources are central todeveloping countries. Valuingenvironmental assets and services innational and corporate accounts canencourage the development ofpolicies to safeguard their value.

The low level of infrastructure inmost developing countries providesan opportunity to leapfrog tomodern, efficient technologies, but italso requires sufficient technicalcapacity and a supportive policyenvironment.

High levels of employment ininformal sectors poses challengesfor successfully implementingenvironmental standards, andrequires stakeholders to have thecapacity to develop and implementappropriate measures.

Effective, inclusive and equitablegovernance is essential. Governanceprocesses and mechanisms forgreening development shouldrespond to the needs and interestsof marginalised groups.

Greening national processes: distinctive features of developing countries

(especially the budget process),developing strategies for keyeconomic sectors as well as howthese feed through into sub-nationaldevelopment.

Capacity development for greengrowth policies should take a“country system approach” acrossgovernment. Finance and coreeconomic ministries should take aleading role on core economicpolicies for green growth that engagecentral planning, finance andsectoral ministries as well asenvironment agencies in theirformulation. The role and capacityof non-governmental actors in theprivate sector and civil society willalso be important.


24

Integratin

g green grow

th in

togovern

men

t policies

MAINSTREAMING GENDERMainstreaming gender in greengrowth strategies will beparticularly important to tacklemalnutrition and food security indeveloping countries. Women play afundamental role in povertyreduction, decreasing childmalnutrition and increasingagricultural production.Discriminatory attitudes andpractices regarding the role ofwomen in society are significantbarriers to their control overresources and thus food production.For example, OECD work using theSocial Institutions and Gender Indexshows that in countries wherewomen have few or no rights toaccess land, the levels of childmalnutrition are also higher. RecentOECD work also shows thatdiscriminatory social institutionscan negatively affect rural women’sempowerment, agriculturalproduction and food security.

Countries where women lackrights to own land have onaverage 60% more malnourishedchildren.

WIKIGENDER is a project initiated by theOECD Development Centre to improveknowledge of and exchange on genderequality-related issues around the world,with a focus on empirical evidencemeasuring gender equality. Based on thework of the Social Institutions and GenderIndex, Wikigender also aims to highlight theimportance of social institutions such asinformal and formal laws, social norms andpractices that impact on women’sempowerment.

www.wikigender.org

THE IMPORTANCE OF CITIES,REGIONS AND COMMUNITIESCentral government policy alonecannot ensure a green transition –cities, regions and communities canalso be catalysts for green growthpolicy solutions. Experimentationand learning at the local level canprovide essential experience and leadto bottom-up diffusion of approachesbetween cities and regions as well asinfluence national and eveninternational levels of actions. Co-ordinating governance issues canhelp achieve the most cost-effectiveoption in attaining green growth,including in the areas of greeninvestment and innovation.

Cities are essential to making growthstronger, greener and more inclusive Over 50% of the world’s populationis now living in cities, and 70% of thepopulation is expected to be urbanby 2050. Cities are critical drivers ofnational growth: just 2% of OECDregions, mainly the largest OECDurban areas, produce one-third of allgrowth in the OECD. In both Indiaand China, the five largest cities’economies contribute approximately15% of national GDP – roughly threetimes their share of the population.

But growing urbanisation increasespressures on the environment. Citiesaccount for an estimated 67% ofglobal energy use and 71% of globalenergy-related CO2 emissions. Theexpansion of cities without sufficientspatial planning or adequateinvestment in housing and other

essential infrastructure can createsubstandard living conditions,through severe air and waterpollution as well as the accumulationand inappropriate disposal ofhousehold and industrial waste.

Without new policies, the healthimpacts of urban air pollutionwill continue to worsen by 2050,and it is expected to become thetop environmental cause ofpremature mortality worldwide.

OECD work on cities and greengrowth shows that urban policies,such as increasing density,congestion charges and property taxreforms, can contribute to reducingenvironmental pressures whilesupporting economic growth in thelong term. There are clear instanceswhere green growth initiatives at thecity level can also provide social co-benefits, such as reducing socialexclusion through public transitenhancements or reducinghouseholds’ energy costs throughenergy-efficiency retrofits. Butdeveloping green growth strategies atthe city scale is not an easy task. Keychallenges include how to ensureintegration and co-ordinationbetween local and national initiativesand making these efforts broader,more systematic and long-term. Nowmore than ever, funding is anotherkey issue as cities face demands ofemployment generation and serviceprovision with fewer resources.

www.oecd.org/greencities


RENEWABLE ENERGY AND THEOPPORTUNITIES FOR RURALDEVELOPMENT Recent years have seen a rapidincrease in the quantity of energyproduced from renewable sources,such as wind, solar, geothermal andsmall hydropower.

Between 2002 and 2010, overallinvestment in renewabletechnologies has been estimated atapproximately USD 1 trillion. Due tothe availability of both space andrenewable sources of energy, ruralregions attract a large share of thisinvestment.

In Germany around 25% ofoverall renewable energyinvestments goes to rural areas,and above 60% in countries likethe United States, Canada andAustralia.

OECD case studies suggest thatrenewable energy deployment canpositively affect the developmentpath of rural areas. For instance,royalties and taxes paid bydevelopers to local communitieshelp them to improve the delivery ofkey services. New resources can beused to build schools, seniorresidences, or increase broadbandaccess in sparsely populated areas.Renewable energy installations canalso create employmentopportunities in maintenance andoperation activities and can spurself-employment andentrepreneurship.

However, national and regionalrenewable energy policies with veryambitious targets and highincentives for renewable energyproduction have often causeddistortions, triggering rent-seekingbehaviours, and creatingcompetition between installationsand agriculture and tourism for landuse or landscape amenities. As aresult, many local communities havestarted opposing furtherdeployment.

Potential links with rural industriessuch as forestry or manufacturingare not developed due to the lack ofan integrated approach to renewableenergy deployment. Reducing theuse of spatially blind incentives setat the central level, and taking intoaccount the characteristics andspecific needs of hosting economiescould help to transform the largeinvestment in an opportunity foreconomic development.

Finding out more

www.oecd.org/greengrowth/citiesandregions

Cities and Green Growth (OECD,forthcoming)

Compact City Policies: AComparative Assessment, OECDGreen Growth Studies (OECD,2012)

The Production of RenewableEnergy as a RegionalDevelopment Policy in RuralAreas, OECD Green Growth Papers(OECD, 2012)

OECD Regional Outlook 2011:Building Resilient Regions forStronger Economies, Special Focus:Innovation and Green Growth inRegions, (OECD, 2011)

OECD RIO+20 . 25


TECHNOLOGY TRANSFER ANDINTERNATIONAL RESEARCH CO-OPERATION Ensuring a wide diffusion of greentechnologies in areas such as energy,transport and waste disposal will beas important as their development.Environmental issues ofinternational or global concern canbenefit from international policy co-ordination which extends beyondjoint commitment to emissionreductions.

OECD work shows that not allinternational green technologytransfer and knowledge diffusiontakes place within advancedeconomies. In recent years,emerging and developing economieshave become important destinationsand sources for internationaltransfer of environmental andclimate change mitigationtechnologies. Increasingly, inventorsin non-OECD countries have joinedforces with OECD inventors in the

development of specifictechnologies. However, there issignificant potential for furtherexpansion in North-South andSouth-South diffusion ofenvironmental technologies andknowledge.

Actions by developing countries toput in place policies that constrainemissions will be critical forencouraging greater internationaldiffusion of green technologies.


International co-operation

for green growth

Intern

ational co-operation

for green grow

th

INTERNATIONAL RESEARCH CO-OPERATION IN DESALINATION TECHNOLOGIESMost important co-authorship relationships between OECD and non-OECD countries

Note: Country of authorship is defined in terms of country of primary affiliation.Source: OECD calculations based on data from the SCOPUS database. See International Cooperation for Climate Change: A Problem Shared is aProblem Halved (OECD, forthcoming).


Finding out more

www.oecd.org/environment/innovation

www.oecd.org/sti/innovation/green

International Cooperation forClimate Change: A Problem Sharedis a Problem Halved (OECD,forthcoming working paper)

Energy and Climate Policy andInnovation: Bending theTechnological Trajectory, OECDStudies on EnvironmentalInnovation (OECD, 2012)

International TechnologyAgreements for Climate Change:Analysis Based on Co-InventionData, OECD Environment WorkingPapers, No. 42 (OECD, 2012)

Invention and Transfer ofEnvironmental Technologies, OECDStudies on EnvironmentalInnovation (OECD, 2011)

However, the lack of stringentenvironmental policy signals indeveloping countries is not the onlyexplanation for the low rates. Moregeneral factors such as lack offinancial resources, openness to tradeand foreign direct investment, therule of law and the quality of the IPRsystem also help to explain whytechnology diffusion tends to beconcentrated in developed countries.However, the most important factoris unquestionably domesticinnovative (or absorptive) capacity.The higher the level of domestichuman capital, the greater thediffusion and adoption oftechnologies available oninternational markets. This

illustrates the importance of long-term capacity building and educationin technical and scientific areasunderpinning ‘green’ innovation.

One important way to increasedomestic innovation capacity isthrough international researchcollaboration. Indeed, it isinteresting to see that while much ofthe international research co-operation is amongst OECDeconomies, some developingcountries have become significantresearch partners. The map showshow frequently researchers based inOECD and non-OECD countries co-author scientific papers in the areaof desalination.

International technology-orientedagreements can play an importantrole in encouraging collaboration,and the evidence indicates thatemerging economies are relativelymore likely to collaborate in thedevelopment of climate mitigationtechnologies than in other areas.The IEA’s “ImplementingAgreements” have played animportant role in encouraginginventors from different countries tocollaborate in the development oftechnologies such as solar and windpower, carbon capture and storage,and energy storage, and many of theemerging economies are playing anincreasingly prominent role in suchagreements.

OECD RIO+20 . 27



Intern


for green grow

th

REDUCING BARRIERS TO TRADE IN ENVIRONMENTAL GOODS AND SERVICESAchieving greener growth willrequire numerous goods and servicesto enable factories and buildings touse energy more efficiently, to reduceair and water pollution, to make thetransition to more sustainable usesof energy, and to provide sanitationand clean drinking water. Many ofthese goods and services will beprocured locally, but some will onlybe available, or available morecheaply, from foreign suppliers.

Trade in both environmental goodsand services (EG&S) often goes handin hand. For example, there is a fast-growing trade in servicesmonitoring, repairing and evenremotely operating renewable-energy facilities such as windturbines and bio-gas plants.

At one point in the negotiationson liberalising trade inenvironmental goods at the WTO,the number of products proposedby member economies forincluding on a list of such goodsnumbered more than 400.

Trade can help the environmentboth through achieving a moreefficient use of resources and byserving as a conduit for the transferof green technologies. Willingnesswithin the international communityto reduce barriers to trade in EG&Sappears to be growing. The OECDhas been active in providing input tosuch efforts by the WTO, APEC andNGO coalitions. But, currently, tradebarriers still reduce the quality ofthe needed inputs and make theirsupply more expensive, renderingprogress along the path of greengrowth more difficult.

Reducing or eliminating importtariffs on environmental goods isrelatively easy to implement withthe appropriate political support.But many of the barriers to trade inEG&S are of a non-tariff nature and

Finding out more

www.oecd.org/trade/env

Trade-Related Measures Basedon Processes and ProductionMethods in the Context ofClimate-Change Mitigation,OECD Trade and EnvironmentWorking Papers, no. 2011/04(OECD, 2011)

Trade in Services Related toClimate Change: An ExploratoryAnalysis, OECD Trade andEnvironment Working Papers, no.2011/03 (OECD, 2011)

Facilitating Trade in SelectedClimate Change MitigationTechnologies in the EnergySupply, Buildings, and IndustrySectors, OECD Trade andEnvironment Working Papers, no.2009/02 (OECD, 2009)

0

100

200

300

400

500

600

700

1996 1998 2000 2002 2004 2006 2008 2010

Billio

ns o

f nom

inal U

S d

olla

rs

World OECD China

WORLD TRADE IN ENVIRONMENTAL GOODS1996 – 2010

Note: “Environmental goods” refer to those included in the OECD’s illustrative list inEnvironmental Goods and Services: the Benefits of Further Trade Liberalisation (OECD, 2001) Source: OECD based on WTO trade data.

From 1996 through 2010, world trade in environmental goods – as defined by a

list drawn up by the OECD in the late 1990s – tripled in nominal value terms.

Over the same period, the share accounted for by non-OECD countries grew

fourfold, from 6% to 24%.

require more frequent consultationand co-ordination among thecountries concerned. Local-contentobligations, for example, areconditions imposed on producers orinvestors — often in the context ofsubsidies, tax breaks, or governmentprocurement — that specify aminimum share of goods or servicesassociated with a project that haveto be procured locally. Suchobligations have arisen in severalcountries, or their provinces, notablyin connection with renewableenergy. The OECD is currentlyworking to document the incidencesof these and other domesticincentive measures and to explaintheir effects on production,consumption and trade in theaffected goods.


OECD RIO+20 . 29

ENSURING FREEDOM OFINVESTMENT AND PREVENTINGPROTECTIONISMInternational investment is a vitalsource of finance and a powerfulvector of innovation andtechnology transfer as countriesaddress the effects of climatechange and seek to promote greengrowth.

The OECD-hosted Freedom ofInvestment (FOI) Roundtable,bringing together some 50governments from around theglobe, has issued a statement,Harnessing Freedom of Investment forGreen Growth, which underscoresthe importance of continuedmonitoring by governments oftheir investment treaty practicesregarding environmental goals.

New environmental measuresshould also observe keyinternational law principles suchas non-discrimination (creating alevel playing field for domestic andinternational investors).International investmentarbitration is assuming a growingrole in resolving disputes involvingenvironmental issues, placingspecial responsibility on theinvestment policy community toensure the integrity andcompetence of arbitral tribunalsand to improve their transparency.

The FOI Roundtable also addressesconcerns expressed by somecountries that investment could beaffected if the green growth policyagenda were captured byprotectionist interests. However, todate, none of the 42 OECD andemerging economies that reportregularly to the Roundtable aboutinvestment measures have

reported overt discriminationagainst non-resident or foreigninvestors in relation toenvironmental policy. Nonetheless,vigilance is encouraged.Environmental policy measures thatappear to be neutral may potentiallyinvolve de facto discrimination orcreate barriers to trade whichconstrain development. Someenvironment-related state aids (suchas grants, loan guarantees or capitalinjections for individual firms), may

The OECD Guidelines for Multinational Enterprises arerecommendations addressed by governments tomultinational enterprises. They provide voluntaryprinciples and standards for responsible businessconduct.

The Guidelines encourage communication practicesin areas where reporting standards are stillevolving, such as social, environmental and riskreporting. This is particularly the case with GHG

emissions. In line with an increased demand for disclosure of non-financialinformation by companies, the OECD is currently taking stock ofgovernment schemes promoting corporate GHG emissions disclosure witha view to identify related benefits and challenges for governments,companies and investors.

www.oecd.org/daf/investment/guidelines

potentially pose risks tocompetition.

The FOI Roundtable will continueto monitor investment measures toensure that they are not used asdisguised protectionism. As part ofits general monitoring of investmentmeasures, the Roundtable invitesStates to report on whether theirinvestment treaty arbitration caseshave any impact on environmentalpolicy.

Finding out more

www.oecd.org/daf/investment/foi

Harnessing Freedom of Investment for Green Growth, Freedom ofInvestment Roundtable (OECD, 2011)

Defining and Measuring Green FDI: An Exploratory Review of ExistingWork and Evidence, OECD Working Papers on International Investment, No.2011/02 (OECD, 2011)

Stocktaking of Domestic Greenhouse Gas Emission Reporting Schemes(OECD, forthcoming working paper)


Climate change mitigation USD 13.7 bn.

DesertificationUSD 2.7 bn.

BiodiversityUSD 5.7 bn.

The OECD collects data on aid flows to key sectors related to green growth and

sustainable development such as energy, water, agriculture and forestry. It has

also been tracking aid for environmental purposes for over two decades and aid

targeted to the three Rio Conventions on biodiversity, desertification, and

climate change since 2000.

www.oecd.org/dac/stats/rioconventions

DEVELOPMENT ASSISTANCE FORGREEN GROWTH ANDSUSTAINABLE DEVELOPMENTOfficial development assistance(ODA) plays an important role inareas where private sector flowsare scarce – such as human andinstitutional capacitydevelopment – to create enablingconditions for greener growth.OECD countries make up the maindonor countries, and have beenworking with developing countrypartners to identify how ODA canbest support their sustainabledevelopment.

Sustainable natural resourcemanagement is now a priorityfocus of many bilateral aidprogrammes and EnvironmentalImpact Assessments are astandard requirement of allsignificant aid-fundedinfrastructure projects indeveloping countries. Moreover, aidcan play an instrumental role toavoid lock-in to carbon-intensiveinfrastructures and in many casesto mobilise private investment inthese areas.

In 2010 OECD donors allocatedabout USD 3 billion to railwaytransport which couldpotentially reduce privatetransport demand and theassociated GHG emissions.

ODA’s contribution to green growthin developing countries can befurther strengthened by ensuringthat climate proofing and disasterrisk reduction approaches aremainstreamed in aid-fundedpublic investments. Similarly aidfor poverty reduction needs topromote livelihoods that are moresecure and resilient to climate

change and environmentaldegradation. It should aim to assistwith major developmental shifts,such as urbanisation, where thescale of investment needed is largeand the sustainability of its planningis particularly important foradvancing green growth.

ODA for renewable energiesrecently surpassed that of ODAfor non-renewable energies.


Intern


for green grow

th

The OECD has recently accelerated itsefforts in applying lessons learnedfrom enhancing developmenteffectiveness to climate changefinance, which is set to increasesubstantially to USD 100 billionannually by 2020. This work includesensuring the effectiveness of itsdelivery and using the financecritically not only for the impact ofmitigation and adaptation measuresbut also for development outcomesand poverty reduction.

AID ACTIVITIES TARGETING THE THREE RIO CONVENTIONS 2009-10 average commitments by Development Assistance Committee (DAC)

members, constant 2010 prices

Source: OECD DAC Creditor Reporting System (CRS)


OECD RIO+20 . 31

PROMOTING KNOWLEDGE-SHARING The OECD has joined forces with the Global GreenGrowth Institute, UNEP and the World Bank toestablish the Green Growth Knowledge Platform(GGKP). Launched in January 2012, the GGKP is aninternational knowledge-sharing platform that identifiesand addresses major knowledge gaps in greengrowth/green economy theory and practice. It aims toprovide practitioners and policymakers with better toolsto foster economic growth and implement sustainabledevelopment, including any commitments that emergefrom Rio+20.

All GGKP research and knowledge-sharing activitiesoperate with an understanding that the green growthand green economy policy mix will vary according tocountry-specific circumstances, thereby necessitating a

5

02001 2002 2003 2004 2005 2006 2007 2008 2009 2010

10

15

20

25

30

US

D b

illio

n

Environment as a sector

Other activities with environment as "principal objective"

Total environment-focused aid (includes "significant objective")

ENVIRONMENT AID 2001-2010, commitments by DAC members, constant 2009 prices

Bilateral ODA for general environmental protection from DAC members grew

from USD 1.9 billion in 2001-02 to USD 5.1 billion in 2010.

Support for other activities addressing environmental sustainability rose from

USD 5.8 billon to USD 20.3 billion in 2009-10.

Finding out more

www.oecd.org/dac/greengrowth

Development Co-operation Report2012 (OECD, forthcoming)

Strategic EnvironmentalAssessment in DevelopmentPractice: A Review of RecentExperience (OECD, 2012)

The Mutual Review of DevelopmentEffectiveness in Africa 2010: Promiseand Performance, OECD/UnitedNations Economic Commission forAfrica (OECD, 2011)

menu of policy options and toolkits. These will seek toimprove local, national, and global economicpolicymaking around the world by providing rigorousand relevant analysis of the various synergies andtradeoffs between the economy and the environment.The GGKP will complement other efforts by emphasizingpolicy instruments that yield local environmental co-benefits while stimulating growth, providing acompelling set of incentives for governments.

www.greengrowthknowledge.org

Source: OECD DAC Creditor Reporting System (CRS)



Measu

ring w

ell-being an

dprogress tow

ards greener grow

th

more direct bearing on people’s lives.Work on the latter aspect can begrouped under the following threepillars of the OECD MeasuringProgress framework:

� Material well-being includes thecommodities and resourcesavailable to individuals andhouseholds. To improvemeasurement in this area, theOECD is working in differentdirections such as: measuring

disparities in National Accounts;measurement of services producedby households for their own use;analysing and explaining thedifference between volume growthin real GDP per capita and realhousehold income per capita; anddeveloping an integratedframework on income,expenditures and wealth.

� Quality of life gathers non-monetary aspects that shapepeople’s ‘doings and beings’. Thiswork mainly focuses on developingguidelines on the measurement ofsubjective well-being, improvedmeasures of environmental qualityof life and measures of resilienceand vulnerability.

� Sustainability can be assessed bylooking at the set of key economic,social and environmental assetstransmitted from current to futuregenerations, and whether theseassets will allow people to meettheir own needs in the future. Tocapture the broad notion ofeconomic, social andenvironmental sustainability, theOECD is monitoring key naturalresources, estimating carbon-emissions embedded inconsumption, and measuringhuman capital.

For almost 10 years, the OECD hasbeen looking beyond the functioningof the economic system to the diverseexperiences and living conditions ofpeople and households. The OECDagenda on measuring well-being andprogress calls for improved and newstatistical measures, aimed at fillingthe gap between standard economicstatistics (which are mainly focusedon measuring the volume of marketactivity and related macro-economicstatistics) and indicators that have a

Measuring well-being and

progress towards greener growth

Health statusWork and life balanceEducation skillsSocial connectionsCivic engagement and governanceEnvironmental qualityPersonal securitySubjective well-being

Income and wealthJobs and earningsHousing

GDP

Regrettables

SUSTAINABILITY OF WELL-BEING OVER TIME

Requires preserving different types of capital:

Natural capitalEconomic capital

Human capitalSocial capital

Quality of life Material living conditions

HUMAN WELL-BEING

Different outcomes for different people (inequalities):

OECD FRAMEWORK FOR MEASURING WELL-BEING AND PROGRESS

Finding out more

www.oecd.org/measuringprogress oecdbetterlifeindex.org


OECD RIO+20 . 33

The OECD’s work on green growthindicators is a key part of itsbroader agenda on measuringprogress and well-being. It cancomplement GDP by measuring andcommunicating progress on thedecoupling of pollution andresource consumption from growth,as well as the impact of economicactivity on natural assets andhuman well-being. For developingcountries, these indicators can bealso used to provide valuablefeedback for international donors,financial institutions and corporatepartners.

The OECD works closely with otherrelevant organisations to develop acommon framework that can beeasily used by all countries, takinginto account their nationalcircumstances and capacities. Giventhe complexity of green growth thatcuts across economic,environmental and socialdimensions, progress towards policyobjectives cannot be easily capturedby a single measure but rather by aset of markers that identifynecessary conditions for greengrowth. To this end, the OECD GreenGrowth Measurement Framework isa powerful tool for providing a bodyof evidence to support the policydialogue on whether:

� economic growth is becominggreener;

� there is risk of future shocks togrowth linked to deterioration ofnatural resources;

� people benefit from greenergrowth; and

� greening the economy is openingnew sources of growth.

The 2011 report Towards GreenGrowth: Monitoring Progress - OECDIndicators proposes a set of twenty-five indicators on the basis ofexisting work in international

PROPOSED GREEN GROWTH INDICATOR GROUPS AND TOPICS COVERED

The environmental and

resource productivity

of the economy

• Carbon and energy productivity

• Resource productivity: materials, nutrients,

water

• Multi-factor productivity

• Renewable stocks: water, forest, fish

resources

• Non-renewable stocks: mineral resources

• Biodiversity and ecosystems

• Environmental health and risks

• Environmental services and amenities

• Technology and innovation

• Environmental goods and services

• International financial flows

• Prices and transfers

• Skills and training

• Regulations and management approaches

• Economic growth and structure

• Productivity and trade

• Labour markets, education and income

• Socio-demographic patterns

1

The natural asset base2

The environmental

dimension of quality of

life

3

Economic opportunities

and policy responses4

Socio-economic context

and characteristics of

growth

organisations, and in OECD andpartner countries. The frameworkdivides indicators into four inter-linked groups reflecting the mainfeatures of green growth.


Amenities, healthand safety aspects

Pollutants waste

Energy and raw materials,water, land, biomass, all

Sink functions

Servicefunctions

Resource functions

Natural asset base (capital stocks, environmental quality)

Economic activities (production, consumption, trade)

Consumption Production

Investments Multi-factorproductivity

HouseholdsGovernments

Recycling,re-use

remanufacturingsubstitution

InputsOutputs

Income Goodsand Services

Residuals Resources

Labour Capital

13

2

4

Policies,measures,

opportunities

OECD GREEN GROWTH MEASUREMENT FRAMEWORK


Measu

ring w

ell-being an

dprogress tow

ards greener grow

thINDICATORS DATABASE

The OECD has recently launched an online

database containing selected indicators for

monitoring progress towards green growth

to support policy making and inform the

public at large. The indicators draw upon

the OECD's expertise with statistics,

indicators and measures of progress.

The dataset covers OECD countries as

well as the BRIICS economies (Brazil,

Russian Federation, India, Indonesia,

China and South Africa), Argentina and

Saudi Arabia from 1990 onwards.

stats.oecd.org

The OECD will continue workingwith countries to advance the greengrowth measurement agenda, fillsome of the most importantinformation gaps, and contribute tothe implementation of the System ofEnvironmental and EconomicAccounting in areas relevant togreen growth. The aim is to:

� Fill gaps in environmental-economic data at the industrylevel.

� Develop and improve the physicaldata for key stocks and flows ofnatural assets, includinginformation on land resources andnon-energy mineral resources thatoften constitute critical inputsinto production.

� Further develop physical data tohelp improve material flowanalyses.

� Improve information onbiodiversity.

� Develop monetary values toreflect prices and quantities for(changes in) key stocks and flowsof natural assets. Such valuations,even if incomplete and imperfectare required for extended growthaccounting models, morecomprehensive balance sheetsand for adjusted measures of realincome.

� Produce information on howenvironmental concerns triggerinnovation in companies.

� Develop indicators onenvironmental regulation tocomplement indicators oneconomic instruments.

� Improve measures on both theobjective and the subjectivedimensions of quality of life, inparticular measures ofenvironmentally induced healthproblems and related costs; andpublic perceptions.

At the same time, the OECD, UNEPand the World Bank are workingclosely together, and also with otherorganisations, including the UNStatistics Division, other UNagencies, EUROSTAT, and theEuropean Environment Agency, todevelop a common set of coreindicators for the green economy.


OECD RIO+20 . 35

Towards headline indicators forgreen growth As part of the next steps of its GreenGrowth Strategy, Ministers haveasked the OECD to define a small setof headline indicators that cansupport national economic policiesby tracking central elements ofgreen growth, while at the sametime conveying a clear message tothe public and policy makers.

Based on a preliminary reflectionand in co-ordination with otherinternational initiatives, notably theUNEP’s framework for GreenEconomy indicators, the followingsix indicators are underconsideration and development andwill be augmented with an indicatorreflecting economic opportunitiesand policy responses:

� CO2 productivity (demand-based and production-based)

� Non-energy material productivity by material group (demand-basedand production-based)

� Multifactor productivity adjusted for environmental services

� Index of natural resource stocks

� Change in land cover

� Population exposure to fineparticles (PM 2.5)

OECD green growth indicators in practice

Finding out more

www.oecd.org/greengrowth/indicators

Towards Green Growth: Monitoring Progress – OECD Indicators (OECD, 2011)

Sustainable Manufacturing Toolkit: www.oecd.org/innovation/green/toolkit

Material Resources, Productivity and the Environment (OECD, forthcoming)

Mortality Risk Valuation in Environment, Health and Transport Policies (OECD,2012)

Countries like the Czech Republic, Korea and the Netherlands have alreadyapplied the OECD green growth measurement framework and indicators totheir specific national contexts to assess their state of green growth. With thesupport of OECD, the Latin America Development Bank, the Latin Americanand the Caribbean Economic System and the United Nations IndustrialDevelopment Organization, work is underway in Mexico, Colombia, CostaRica, Ecuador, Guatemala, and Paraguay to apply the OECD indicators as away to identify key areas of national concern and the scope for improving thedesign, choice and performance of policy instruments.


FOOD, AGRICULTURE ANDFISHERIESAgriculture has usually respondedsuccessfully to the need to producemore, initially by expanding the land itoccupied and then by producing moreintensively on that land. But worldpopulation is projected to grow by athird by 2050 and demand for food willdouble. Farmers will be in competitionwith urbanisation and infrastructureprojects for land and other resourcessuch as water, and the negativeimpacts of further intensification onthe environment may limitimprovements to yields.

To meet the needs of an expected9 billion people by 2050, foodproduction will need to increaseby 70% - 100% compared withcurrent levels.

Agriculture uses on average over40% of water and land resourcesin OECD countries.

Farming and fishing have significantimpacts on the environment. Climatechange will also have an effect onagriculture and food production. Thechallenge for policy makers is to meetincreasing demands for food andresources while minimisingenvironmental and social pressure.

Developing countries will need anestimated investment of USD 209billion per year to meet the foodneeds of their growingpopulations.

Transforming sectors


Transform

ing sectors

An increase of 3° - 5° C in globalmean temperatures would likelyresult in a fall in maize andwheat yields, high productionlosses of pigs and confined cattle,and increased heat stress andmortality in livestock.

The OECD Green Growth Study: Food and Agriculture(2011) argues that a greener and more effective foodchain can contribute substantially to sustainablegrowth and food security, and pave the way for lesspressure on marine and land resources. It identifiesthree priority areas where coherent action is required:

� Increase productivity in a sustainable way: Increasingresource use efficiency throughout the supply chainwill not only ensure more production relative toinputs used, but also conserve scarce naturalresources and deal with waste.

� Ensure that well functioning markets provide the right signals: Prices thatreflect the scarcity value of natural resources as well as the positive andnegative environmental impacts of the food and agriculture system willcontribute to resource use efficiency.

� Establish and enforce well-defined property rights: Property rights helpensure optimal resource use, in particular for marine resources, land andforests, greenhouse gas emissions, and air and water quality.

www.oecd.org/agriculture/greengrowth


OECD RIO+20 . 37

FISHERIES AND AQUACULTUREAs natural capital is used up, itbecomes more expensive to replace itwith technology and other resources. About half of the fish stock groupsmonitored by the FAO are fullyexploited and a third overexploited,depleted or recovering from depletion.

Poorly managed fisheries leave theenvironment and profitability at risk. Allowing fish stocks to be drawn downbelow the point where they offermaximum returns hurts theprofitability of fishers and thepotential contribution of the sector tothe economy and food supply, as wellas ocean ecosystems.

Change can be sudden, unpredictableand irreversible. Some stocks can recover fromcatastrophic collapse, as did thePeruvian anchovetta, while others failto do so, like the cod stocks in theNorthwest Atlantic.

Approximately 30% of the world’sfish stocks are overexploited,depleted, or recovering fromdepletion and 50% are fullyexploited.

Policies have to be coherent withactivities outside the fish sector. For example, fertilizer and pesticidesfrom agriculture can cause dead zonessuch as the 6 000 - 7 000 square milezone in the Gulf of Mexico. Tourismand commerce may compete with fishproduction for access to infrastructure.

Principles and guidelines for rebuildingfisheries recommended by the OECD in2012 address these issues. The keymessage is that if fisheries aremanaged in a sustainable andresponsible way, rebuilding won’t benecessary. OECD work calls for acomprehensive assessment thatrecognises the interplay between theeconomics of fishing activity, thebiological state of the stocks,management and governance.

www.oecd.org/fisheries

Finding out more

OECD-FAO Agricultural Outlook (OECD, FAO, 2012)

Agricultural Policies for Poverty Reduction (OECD, 2012)

Food and Agriculture, OECD Green Growth Studies (OECD, 2011)

The Economics of Rebuilding Fisheries (OECD, 2012)

Fisheries: While Stocks Last? OECD Insights (OECD, 2010)


ENERGY Rising energy demand and the need todrastically cut CO2 emissions require atransformation in the way we produce,deliver and consume energy. Thecurrent energy system is highlydependent on fossil fuels, whosecombustion accounted for 84% ofglobal greenhouse gas emissions in2009, according to the IEA. Globaldemand for energy is rapidlyincreasing, because of population andeconomic growth, especially in largeemerging market economies, whichwill account for 90% of energydemand growth to 2035. At the same

time, 1.3 billion people worldwide stilllack access to electricity.

As developed countries renew theirenergy infrastructure and developingcountries build new power plants tomeet growing demand, there is awindow of opportunity to achievegreener energy production. IEAanalysis shows that worldwideenergy-related emissions of CO2

could be halved by 2050, usingexisting and emerging technologies,at an additional new investment ofUSD 46 trillion.

Promoting innovation and creating newmarkets and industries can reduce thesector’s carbon-intensity and improveenergy efficiency, as well as createopportunities for economic growth andemployment. It is vital for governmentsto create the enabling policyframework to catalyze private sectorinvestment. By acting now, long-termcosts can be reduced: every US dollar

The jointreport by theOECD andIEA, GreenGrowthStudies:Energy (2011)highlights thechallengesfacing energyproducersand users, how they can beaddressed using green growthpolicies, and how to reshape thepolitical economy of reform.

Finding out more

www.iea.org

World Energy Outlook 2011 (IEA,2011)

0

5

10

15

20

25

30

35

40

45

50

55

60

2010 2015 2020 2025 2030 2035 2040 2045 2050

GT

CO

2

Carbon capture and storage 19%

Renewables 17%

Nuclear 6%Power generation efficiency and fuel switching 5%

End-use fuel switching 15%

End-use fuel and electricity efficiency 38%

BLUE MAP emissions 14 Gt

Baseline emissions 57 Gt

WEO 2009 450 ppm case ETP2010 analysis

KEY TECHNOLOGIES FOR A LOW-CARBON ENERGY SYSTEM IN 2050

Source: Energy Technology Perspectives 2010, IEA

Transform

ing sectors


that is not spent on investment in theenergy sector before 2020 will requirean additional USD 4.3 to be spent after2020 to compensate for increasedgreenhouse gas emissions by buildingzero-carbon plants and infrastructureby 2035 (IEA, 2011).


OECD RIO+20 . 39

and sanitation systems andaffordability for poor households.

Restoring environmental flows andallocating more water to watershedservices will help maintain thevaluable ecosystem services theyprovide. Removing incentives whichencourage people to settle or invest inflood-prone areas can reduce theimpact of water-related disasters.

Health and other dividendsInvesting in water supply andsanitation infrastructure bringsimportant dividends, in particular inurban slums where unsafe water andlack of sanitation generates hugehealth costs and lost economicopportunities. Innovative techniquesand business models with privatesector involvement will be needed.

Public support for water-related R&Dand building the capacity of users isjustified to improve and increase theuse of appropriate wastewatertreatment equipment and techniques,and the efficient management ofnutrients and agricultural run-off.Experience shows that building thecapacity of users (essentially that offarmers) in target economies throughtraining and education can be evenmore relevant and effective thantransferring technologies.

Additional benefits can include savingenergy and cutting investmentrequirements and operation andmaintenance costs. However, there arealso risks, notably pollution ofagricultural land or health risks. OECDwork on eco-innovation for waterexplores economic and policy issuesassociated with the use of alternativewater resources and innovativetechnologies, such as smart watersystems.

WATERAccording to the OECD EnvironmentalOutlook to 2050, global water demand isprojected to increase by 55% between2000 and 2050, and tensions couldincrease as domestic users,manufacturing, electricity generationand other economic sectors competewith agriculture for access to resources.By 2050, over 40% of the globalpopulation are likely to be living in riverbasins under severe water stress.

Despite progress in increasing access toimproved water sources and sanitation,more than 240 million people areexpected to remain without access to“improved” –but not necessarily safe –water sources by 2050. Almost 1.4billion people are projected to still bewithout access to basic sanitation in2050, mostly in developing countries.

According to the World HealthOrganization, investments to meetthe water and sanitation MDGscould have a benefit-to-cost ratioof 7 to 1.

Green growth policies in the watersector need to address both quantityand quality issues, encourage water-related innovation and investment ingreen infrastructures, and they need tobe integrated with policies in sectorsthat have an impact on wateravailability and use - especiallyagriculture, energy, and land use.Sustainable financing, effectivegovernance and policy coherence arekey.

Sustainable pricing of water and waterrelated services can signal the scarcityof the resource, promote efficiency andmanage demand. Targeted socialsupport is more effective than lowtariffs (or the absence of tariffs) tocombine investment in water supply

Finding out more

www.oecd.org/water

Meeting the Water ReformChallenge (OECD, 2012)

Water Quality and Agriculture:Meeting the Policy Challenge (OECD,2012)

OECD Environmental Outlook to2050: The Consequences of Inaction(OECD, 2012)



Maritime transportRegulations and advocacy through bothinternational and territorial policyaction, and continued development ofenvironmental performance metrics inglobal supply-chain networks cancreate market-based incentives for less-polluting maritime transport.

AviationInvestment in fuel efficient technologiesand fleet renewal will largely determinethe environmental impact of aviation.Fuel prices, tax and regulatory policieswill influence the composition of thefleet. An internationally agreedemissions trading system would bemore effective than taxes on passengerticket sales. Better management of airspace will also contribute to reducingboth emissions and noise.

TradeoffsGovernments should consider tradeoffsamong various policy objectives, forexample in aero engine design betweennoise and emissions, or whenimprovements in passenger car fuelefficiency reduce fuel tax revenues. Asgreen growth policies spread, it isnecessary to review the way thetransport sector is taxed. It is also

TRANSPORTTransport has major environmentalimpacts in terms of GHG emissions,air pollution and noise. Maritime andair transport represent smaller sharesof total emissions than road.

Total CO2 emissions from freightand passenger transportcombined worldwide are expectedto grow 1.5 to 2.4 times their2010 levels by 2050.

AutomobilesA large part of public expenditure tostimulate green growth has beendirected at alternative vehicles, andelectric cars in particular. Somegovernments are also making long-term investments in high speed rail, toreduce the use of car and short-haulaviation traffic.

Priority should be given to improvingthe fuel efficiency of conventionalengines, through fuel economy andCO2 emissions standards andeconomic incentives such as feebates,before gradually introducingalternative technologies. Managingcongestion is central to sustainabletransport.

The congestion charge scheme inLondon has seen a 6% increase inbus passengers during charginghours, and raised GBP 148 millionin 2009/10 to be invested inimproving transport.

RailHigh speed rail can competeeffectively with passenger cars and airtransport over distances up to 1 000kilometres where traffic is dense.Investment in high speed rail is likelyto reduce GHGs from traffic, but thereduction is small and may takedecades to compensate for theemissions from construction. Theeconomic benefits of high speed rail,including stimulating localemployment, can be significant, butshould be closely assessed.

necessary to consider the politicaleconomy of congestion charges basedon experience with existing systems,and conduct comprehensive socio-economic appraisal of countries’transport investments and policies.

High car ownership – High GDP

Ind

ex, 2010 =

100

Low car ownership – High GDP

Low car ownership – Low GDP

Non-OECD CountriesOECD Countries

20102010 2020 2030 2040 2050

50

100

150

200

250

300

350

400

2020 2030 2040 2050

50

100

150

200

250

300

350

400

CAR OWNERSHIP IN RELATION TO GDP2010–2050

Source: 2012 Transport Outlook, International Transport Forum (ITF).

Finding out more

www.internationaltransportforum.org

2012 Transport Outlook (ITF, 2012)

Environmental Impacts ofInternational Shipping: The Role ofPorts (OECD, 2011)

Globalisation, Transport and theEnvironment (OECD, 2010)

Green Growth and Transport, ITFDiscussion Paper no. 2 (ITF, 2011)

Reducing Transport Greenhouse GasEmissions: Trends and Data, (ITF,2011)

Strategic Transport InfrastructureNeeds to 2030, (ITF, 2011)

Transform

ing sectors


OECD RIO+20 . 41

We, ministers1 assembled at the OECD Headquarterson 29-30 March 2012;

We recall that sustainable development is anoverarching goal of OECD governments and the OECD,as was noted in the Communiqué of the May 2001OECD Meeting of Council at Ministerial level (MCM)[PAC/COM NEWS(2001)48]. We emphasise theimportance of continuing work on sustainabledevelopment at the OECD.

We further recall that the 2009 MCM adopted the“Declaration on Green Growth” [C/MIN(2009)5/ADD1/FINAL] while the 2011 MCM welcomed the OECD’sGreen Growth Strategy [C/MIN(2011)4 and its ANN1&2;C/MIN(2011)5 and C/MIN(2011)5/FINAL].We considergreen growth a practical means of achieving many ofthe goals of sustainable development, not areplacement for it. We note that the aim of greengrowth is closely aligned with one of the two majorthemes of the Rio+20 Conference, namely greeneconomy in the context of sustainable developmentand poverty eradication. We support the ongoing workof the OECD on green growth, and welcome thecontribution that it makes to discussions at the Rio+20Conference.

We welcome the OECD’s Environmental Outlook to 2050(the Outlook) which we called for at our meeting in2008. We consider that it contains important findingsin the fields of climate, water, biodiversity and humanhealth that should usefully inform deliberations at theforthcoming Rio+20 Conference. We also recognise theneed for further attention by the OECD to otherenvironmental issues, including resource and energyefficiency, sustainable agriculture and food security,chemical risk reduction and waste management, andenvironment-related spatial planning.

The Outlook demonstrates the need for urgent policyaction to address key environmental challenges, changethe course of development, and avoid potentiallysignificant consequences and costs of inaction. Weconfirm the Outlook findings that a business-as-usualapproach to growth and development would place gravepressures on the earth’s biosphere. Althoughuncertainties remain about environmental thresholds,crossing them would entail real reductions in well-beingand welfare.

We further note that strong governance and well-designed policies can significantly relieve thesepressures while still meeting the legitimate developmentaspirations of everyone. We recognise the importance ofestablishing the right conditions to ensure a smoothtransition to an inclusive and equitable green growth.

We consider that the OECD’s Green Growth Strategy,released in May 2011 and augmented by subsequentanalyses, provides an important policy toolkit withwhich to address many of the developmental challengesfacing the global community. We look forward to theOECD’s forthcoming report on green growth anddeveloping countries including emerging economies, andwelcome the contribution of these emerging economiesto the report in order to maximise its policy relevanceand usefulness.

We ask the OECD to broaden its green growth analysisboth thematically and sectorally, recognising that greengrowth should be encouraged across all sectors and takeinto account the linkages between different sectors. Westress that the idea of green growth is not a replacementfor the broader paradigm of sustainable development.Green growth aims to foster economic growth anddevelopment while ensuring that natural assets continueto provide the resources and environmental services on

Policy Statement to the

Rio+20 ConferenceFrom the OECD Environment Policy Committee Ministerial

Meeting on 29-30 March 2012



which our well-being relies. Green growth is not a one-size-fits-all prescription, but is instead an approach thataims to take account of different levels of development,resource endowments and environmental pressures.

We support efforts to mainstream green growth intoeconomic policy, and recognise the important role offinance and economy ministries, working together withour own ministries as well as those responsible forinnovation, skills development, natural resourcemanagement, agriculture and energy amongst others. Theprivate sector will play a major role in delivering greengrowth. We emphasise the need for governments toestablish enabling frameworks that leverage privateinvestment, and to work effectively in partnership withthe private sector and civil society in achieving greengrowth. The success of green growth policies depends onthe awareness of consumers and enterprises of the needand possibilities for change, and the willingness ofgovernments to promote policies to alter incentives forthese groups. This underlines the importance of access toenvironmental information, public awareness andparticipation, and effective access to judicial andadministrative review of decisions that may affect theenvironment. We look to the OECD to work with countriesto explore implementation paths and governanceapproaches that are adapted to different country settings.

We underline that if countries are to effectively monitortheir implementation of national green growth strategiesand their progress towards any goals that may be agreedat the Rio+20 Conference, practical measurement toolswill need to be developed. We commend the OECD’songoing work on green growth indicators [C/MIN(2011)5/FINAL] as a useful complement to GDP by providing ameans to measure and communicate progress on thedecoupling of pollution and resource consumption fromgrowth, as well as the impact of economic activity onnatural assets and human well-being, includingprotection of public health. We urge the OECD to workwith other relevant organisations to develop a commonframework that can be easily and practically used by allcountries, taking into account their nationalcircumstances and capacities. We seek wider support forsuch indicators at the Rio+20 Conference. We commit toensuring that the green growth policy agenda, open tradeand investment for sustainable development, and thespread of green technologies and innovation aremutually supportive. We stress that green growth should

not constitute a means of discrimination or provide apretext for economic protectionism; at the same time,trade and investment policy must not be a barrier togreen growth or sustainable development. We note thatthe OECD has so far found no evidence of greeninvestment protectionism. International co-operation,including capacity building, should be strengthened tosupport clean production in all countries and to avoid ashift of polluting production to countries with lessstringent regulations. We ask the OECD to continue toestimate and assess fossil fuel and other subsidies, witha view to supporting countries in their efforts torationalise or phase out environmentally-harmful andinefficient subsidies, such as fossil fuel subsidies, thatencourage wasteful consumption, while providingtargeted support for the poorest.

We consider that work on sustainable development andenvironment should be a priority in OECD cooperationwith enhanced engagement countries (Brazil, China,India, Indonesia and South Africa), Russia and otheremerging and developing countries. We recognise theimportance for all of sharing policy experiences,including through the Organisation’s improved andstreamlined peer review processes so that green growthcan be grounded in country-specific policy advice. Wesupport efforts to accelerate and broaden the world-widetransition towards an inclusive green economy thatpromotes sustainable development and povertyeradication, and to drive international action andincrease co-operation in key areas for environmental andsocial development such as agriculture, water, energy,employment and education. We are committed tostrengthen governance structures at all levels (local, sub-national, national, regional, global) that underpin thedelivery of sustainable development and theachievement of internationally agreed goals. We lookforward to making progress in these areas at the Rio+20Conference. We offer our support to the Rio+20Conference and stand ready to contribute to theoutcomes of the Conference.

1. Ministers and Representatives of Australia, Austria, Belgium,Canada, Chile, the Czech Republic, Denmark, Estonia, Finland,France, Germany, Greece, Hungary, Iceland, Ireland, Israel, Italy,Japan, Korea, Luxembourg, Mexico, the Netherlands, New Zealand,Norway, Poland, Portugal, the Russian Federation, the SlovakRepublic, Slovenia, Spain, Sweden, Switzerland, Turkey, the UnitedKingdom, the United States and the European Union.

Policy Statemen

ts


OECD RIO+20 . 43

Rio+20 is an important opportunity to assess progress,identify gaps and renew commitments to sustainabledevelopment. We, the members of the OECDDevelopment Assistance Committee (DAC), pledge tostrengthen our collaboration to address new andemerging challenges and promote economic and socialtransformation for sustainable development. We arefully committed to the three pillars of sustainabledevelopment, through our support for socialdevelopment, economic growth and environmentprotection and we will contribute to the delivery of clearand significant outcomes from the Rio+20 Conference bybuilding a post-2015 global development framework onthe successful example of and lessons learned from theMillennium Development Goals (MDGs).

We will continue our support for developing countries’pursuit of greener and more inclusive growth in theirnationally owned development objectives and povertyreduction strategies, in line with the principles adoptedin the Busan Partnership for Effective Development Co-operation. We stand by our commitments to integratebiodiversity, ecosystem services and climate changeadaptation into our development co-operation practices1

and to enhance the quality and effectiveness ofdevelopment assistance, particularly regarding pro-pooreconomic growth and poverty reduction2. We welcomethe Ministerial Policy Statement of the OECDEnvironment Policy Committee, agreed on 29-30 March2012.

We are building on our past efforts. Our ODA, which issupporting all MDGs, traditionally with a focus on socialand economic development, has steadily increased andin 2010 amounted to almost USD 130 billion. Thisrepresents an increase of 63% since 2000. We have alsomade efforts to better take into account the increasingconcerns of developing countries regarding environment

challenges they are facing and, during recent years, ODAallocated to environmental development (the third pillarof sustainable development) has also increased. Between2001-02 and 2009-10, bilateral ODA for generalenvironmental protection grew from USD 1.9 billion toUSD 5.1 billion and support for other activitiesaddressing environmental sustainability rose from USD5.8 billon to USD 20.3 billion.

We share developing country concerns aboutenvironmental sustainability and recognise that many ofthem have taken the lead in the responsible use ofnatural resources and are learning the lessons from theshortcomings of conventional development models. Wealso recognise the particularities of green growth indeveloping countries, where it must deliver on nationaldevelopment, poverty reduction and job creationobjectives in the context of sustainable development. Webelieve that green growth can deliver on these objectives,but this is only possible if context-specific strategies aredefined through national policy and planning processes,led by Governments.

We will support our developing country partners’ effortsto:

� Develop and implement country-specific, nationally-owned, cost-effective and inclusive strategies aiming atensuring green growth, that take into account trade-offsand political economy barriers, support local, sectoraland national policy frameworks for equity, povertyreduction and development, and are implementedthrough national planning and budget processes.

� Build trust, partnership and capacities among allstakeholders, and strengthen inclusive governance ofpublic policy and expenditure, economic governanceand natural resource management, so that the

OECD DAC Policy Statement for

the Rio+20 ConferenceThis statement was endorsed by the DAC at its Senior Level

Meeting on 3-4 April 2012.



Policy Statemen

ts

1. Policy Statement on Integrating Biodiversity and AssociatedEcosystems Services into Development Co operation adopted in April2010 and Policy Statement on Integrating Climate Change Adaptationinto Development Co-operation adopted in May 2009.2. “The overarching objective of the DAC is to promote development co-operation and other policies so as to contribute to sustainabledevelopment, including pro-poor economic growth, poverty reduction, and tothis effect to enhance the quality and effectiveness of developmentassistance.” Based on DAC Mandate from Council ResolutionC(2010)123 and CORR1.

www.oecd.org/dac/environment

interests of poor women and men are reflected ingreen growth policies and their rights to sustainablelivelihood assets and social protection programmes aresecured.

� Identify and nurture opportunities for affordable greeninnovation and investment that increases employmentand creates jobs, such as climate-resilient livelihoodsand low-carbon and resource-efficient technologies,inter alia by supporting local initiatives, indigenousknowledge and technology transfer on voluntary andmutually agreed terms and conditions to, andbetween, developing countries.

� Support and scrutinise public-private partnerships tofoster innovation, mitigate investment risks andfacilitate multi-stakeholder initiatives to promotemore equitable and environmentally sustainableinvestments and commodity chains.

� Increase the value and welfare derived from naturalcapital by managing natural resources sustainably;developing mechanisms for the payment of ecosystemservices; increasing domestic revenue and incomedistribution from natural resource use and extraction;developing more comprehensive national accounts;and adopting relevant well-being measures.

We will also:

� Assess and promote the coherence of our domesticgreen growth policies with development objectives, useStrategic Environmental Assessments and PovertyImpact Assessments to raise awareness in our countryoffices of environmental issues and climate change,and their links to poverty reduction, and ensure thatour programmes coherently support green growth andpoverty reduction.

� Support systems to allow countries to choose growthpaths and technological trajectories that are sociallyand environmentally sustainable, and to adequatelymanage global public goods by: creating incentives forforeign investment in sustainable sectors; promotingtrade flows of environmentally sustainable goods andservices; supporting developing countries’ activeparticipation in international standardisationprocesses; and developing capacity for innovation.

� Encourage countries to work collaboratively at alllevels to promote knowledge sharing and effectivecapacity and institutional development, including bymaking use of the Green Growth Knowledge Platform(GGKP).

We intend to track our progress by:

� Supporting developing country partners’ own systemsfor monitoring, evaluating and reporting on publicprogrammes to develop and use their own indicatorsof green growth and sustainable development,including by drawing upon OECD work on measuringwell-being and green growth.

� Continuing to monitor and report on external resourceflows targeting relevant social and environmentalobjectives through the OECD DAC.

� Reporting through the OECD DAC on our progress tointegrate green growth into development co operation,implement key actions from this Statement, and sharegood practices and lessons learned.


GREENING THE OECD

The OECD is taking action to increase its environmental

performance:

Waste management

Between 2007 and 2011 the total amount of waste

produced by the OECD halved.

The number of printed copies of official documents has

more than halved over the past 15 years.

Paper, cans, bottles, metal, batteries, and used

electronic equipment are all recycled.

Water consumption

Modifications to faucets have reduced the water volume

used by 20-22%.

Energy consumption

Energy-saving light bulbs are in use throughout the

Organisation’s buildings.

The heating and cooling of the buildings is partly

provided from the vapour produced by household

waste combustion.

Re-circulated heat produced by the main computer

room is used to warm the buildings

Buildings and plant

In 2011 one of OECD’s main office buildings, the

Marshall Building, was granted the French

environmental certificate for buildings, Haute Qualité

Environnementale (HQE® E certification).

The majority of the products used in the organisation are

eco-labeled, from cleaning supplies to materials such as

paint, glue and carpets.

Since 2002, the OECD has been equipped with

furniture that uses environmentally sound production

techniques, transport, recycling and re-use.

Design

and

layout by B

aseline A

rts Ltd, O

xford


www.oecd.org/greengrowth


Date post:	29-Jan-2015
Category:	Education
Upload:	oecd-environment
View:	107 times
Download:	3 times