OECD work on environment, 2015-16

OECD WORK ON

ENVIRONMENT

2015-16

OECD WORK ON ENVIRONMENT 12

The Organisation for Economic Co-operation and Development

13

Preface: Aligning Policies for the Transition to a Low-Carbon Economy

14

Peer Reviews, Indicators and Outlooks

18

Climate Change

12

Biodiversity

15

Water

18

Nitrogen Management

20

Environmental Policies and Economic Outcomes

23

Environmental Policy Tools and Evaluation

26

Resource Productivity and Waste

28

Sectoral Policies: Transport, Agriculture

30

Safety of Chemicals, Pesticides, Biotechnology & Nanomaterials

33

Environment in the Global Economy

36

Green Growth

42

The Committee Structures

43

EPOC Organigramme

44

Environment Directorate (ENV) Structure

48

Selected Databases

2

Me mbe r countr ie s

The Organisation for Economic Co-operation and Development

T

he OECD, which traces its roots to the Marshall Plan, groups 34 member countries committed

Australia

Japan

Austria

Korea

Belgium

Luxembourg

recommendations. Dialogue, consensus, and peer review and pressure are at the very heart of the

Canada

Mexico

OECD.

Chile

Netherlands

Czech Republic

New Zealand

OECD accession discussions are currently under way with Colombia and Latvia. In addition,

Denmark

Norway

enhanced co-operation programs are in place with Costa Rica and Lithuania and Country

Estonia

Poland

Programmes have been launched with Peru and Kazakhstan. Efforts are also made to enhance

Finland

Portugal

engagement with Key Partners such as Brazil, China, India, Indonesia and South Africa.

France

Slovak Republic

Germany

Slovenia

The OECD is working for a stronger, cleaner and fairer world economy. The principal aim of the

Greece

Spain

Organisation is to promote policies for sustainable economic growth and employment, a rising

Hungary

Sweden

standard of living, and trade liberalisation. By “sustainable economic growth” the OECD means

Iceland

Switzerland

growth that balances economic, social and environmental considerations.

Ireland

Turkey

Israel

United Kingdom

The OECD is one of the world’s largest and most reliable sources of comparable statistical,

Italy

United States

economic and social data. It monitors trends, collects data, analyses and forecasts economic

to democratic government and the market economy. It provides a forum where governments

can compare and exchange policy experiences, identify good practices and adopt decisions and

development, and investigates evolving patterns in a broad range of public policy areas such as agriculture, development co-operation, education, employment, taxation and trade, science, technology, industry and innovation in addition to environment. The OECD family of organisations also includes the International Energy Agency (IEA), the Nuclear Energy Agency (NEA), and the International Transport Forum (ITF). © OECD 2015

OECD WORK ON

Environment

Preface: Aligning policies for the transition to a low-carbon economy “ Keeping

the global temperature increase to less than 2°C means moving to net-zero emissions of greenhouse gas emissions from energy, industry, transport and land use in the second half of this century. ”

Angel Gurría OECD Secretary-General

C

limate change is one of the most pervasive risks that the global economy faces today. Moving to a low-carbon economy is the only way to tackle rising global temperatures. It will require unprecedented policy-driven changes with far-reaching economic, social and

technological implications. This necessary transformation will have to take place alongside the significant climatic change that is already locked in by past emissions and investments. In addition, the world’s population is both growing and ageing, as well as rapidly urbanising, hence posing an even greater challenge to our efforts to achieve zero net emissions in the second half of this century.

This goal is achievable, but it will not happen by itself. It will require dedicated policy instruments and a supportive regulatory environment.

This year, we will be delivering a joint report with the International Energy Agency (IEA), the International Transport Forum (ITF), and the Nuclear Energy Agency (NEA) that examines how to better align policies across different areas for a successful economic transition of all countries to sustainable low-carbon and climate-resilient economies.

In the spirit of having a horizontal approach to promoting green growth, we are taking a broad look at policies across different areas, including investment, taxation and trade, as well as key sectors such as electricity markets, land-use and mobility. Our mission will be to continue to identify and promote policy options that can bring about a lasting transformation towards a low-carbon global economy. © OECD 2015

3

4

Peer Reviews, Indicators and Outlooks Monitoring and analysing key environmental challenges, now and in the future Environmental Performance Reviews (EPRs) The EPRs examine countries’ progress towards their domestic and international environmental policy commitments, and provide policy recommendations. The EPRs aim to promote peer learning, enhance governments’ accountability and improve countries’ environmental performance. The analyses presented are supported by a broad range of economic and environmental data.

Topics for in-depth analysis in EPRs In-depth chapters Biodiversity (and forestry) Climate change (and air quality) Waste and materials management Energy and environment Water management Chemicals management Tourism and environment Sustainable mobility Multi-level environmental governance

Each EPR is organised in two parts. The first part, common to all reviews, presents key environmental trends, the institutional and policy framework for environmental management and progress towards green growth. The second part provides an in-depth analysis of two topics selected by the reviewed country.

Marine ecosystem services Environmental performance of industry Environmental innovation Coastal zone management Climate change adaptation Agriculture and environment 0

1

2

3

4 5 6 7 8 9 10 11 12 13 14 Number of EPRs (2010-16)

Key publications The Working Party for Environmental Performance, made up of representatives of all 34 OECD governments and the European Commission, endorses the assessment and recommendations section of the EPRs, a central element of the peer review process.

During 2015-16, reviews of Poland, Spain, Brazil, the Netherlands, France, Chile, Korea and New Zealand will be either released or prepared.

• OECD Environmental Performance Reviews: • Brazil, the Netherlands, Poland, Spain (2015) • Chile, France (2016) www.oecd.org/env/countryreviews

Environmental information, data and indicators The OECD provides harmonised international data and indicators on the environment, and works with countries to improve their environmental information systems and © OECD 2015

OECD WORK ON

...that by 2020 most OECD countries will have undergone an environmental performance review three times, with key partner countries such as China, Russia, Colombia and South Africa also the subject of review?

DID YOU KNOW

Environment

To generate better information on the interactions between the economy and the environment, the OECD supports the implementation of the System of Environmental Economic Accounting (SEEA). A dedicated Task Force has been established jointly with the OECD Statistics Directorate.

Environmental trends and GDP growth, OECD, % change, 2000-12

establish effective mechanisms to inform the public and decision-makers.

GDP

Municipal waste

40

The data, collected from countries and international sources, are treated, harmonised and their quality checked with countries. They are then used in analytical and evaluative work and serve as a basis for calculating indicators.

Air and greenhouse gas emissions

Recovery

20 Generation 0 GHG

-20

The OECD has several indicator sets to monitor environmental performance, policy integration, resource productivity and progress towards green growth. A subset of key environmental indicators was endorsed by OECD Environment Ministers. The OECD measurement framework and its guidance for selecting and using indicators, are a reference for many countries.

Disposal

NMVOC

-40

CO

NOx

SOx

-60

Source: OECD Environment Statistics, OECD, 2014

Key Publications • Towards Green Growth? Tracking Progress (2015)

The indicators are used in country reviews and policy analysis, and their quality improved continuously. Work is underway to further develop indicators on carbon and material productivity, nitrogen flows, land cover, and population exposure to air pollution. © OECD 2015

• Material Resources, Productivity and the Environment (2015) • Environment at a Glance (2015)

Environmental Indicators Country Profiles:

www.oecd.org/env/indicators

5

6 Environmental outlooks The OECD Environmental Outlook to 2050 was the primary input to the OECD meeting of Environment Ministers in April 2012.

Based on economic-environmental modelling, the Outlook looks towards 2050 to analyse the consequences of policy inaction in four priority areas: climate change, biodiversity, water, and health impacts of pollution and chemicals. It provides analyses of economic and environmental trends to 2050, and simulations of policy actions to address the key challenges.

DID YOU KNOW

…that almost four billion people will live in severely water-stressed river basins by 2050 if better policies are not introduced?

Key Publications • OECD Environmental Outlook to 2050: Consequences of Inaction (2012) • OECD Environmental Outlook to 2030 (2008) www.oecd.org/env/indicators-modelling-outlooks/outlooks.htm www.oecd.org/environment/modelling

© OECD 2015

OECD WORK ON

The CIRCLE project The “Cost of Inaction and Resource Scarcity; Consequences for Long-term Economic Growth” (CIRCLE) project aims to identify how feedbacks from poor environmental quality, climatic change and natural resource scarcity are likely to affect economic growth in the coming decades. Over a series of model developments, CIRCLE will generate reference projections for economic growth that reflect the costs of policy inaction. These reference projections will help to improve future OECD projections of economic growth, as well as assessments of the economics of environmental policies, as they are able to include not only costs but also benefits of policy action in terms of reduced environmental damages. This will allow a more informed evaluation of policy options, and a comparison of the costs and benefits involved.

Environment

scarcity. If possible, these themes will also be included in the modelling track at a later stage.

First results for the assessment of the economic feedbacks of climate change damages have been included in the OECD horizontal report on OECD@100. A more comprehensive assessment of the economic consequences of climate change is expected to be published in September 2015. In 2015-16, reports for the other themes covered in CIRCLE are also expected to be published.

Key Publications • Economic Consequences of Climate Change Damage (2015) • Consequences of Climate Change Impacts for Economic Growth: A Dynamic Quatitative Assessment (2014)

www.oecd.org/environment/circle.htm

The first track of the CIRCLE project is a quantitative analysis of the economic feedbacks of climate change, air pollution and the nexus between land, water and energy. The core tool to be used in the analysis is the OECD’s dynamic global multi-sector, multi-region model ENV-Linkages, which will be coupled to biophysical models for an integrated assessment. Using a systems approach allows focusing on interactions between the various environmental challenges.

The second track scopes the possibilities to quantitatively assess water-economy linkages, the economic feedbacks of loss of biodiversity and ecosystem services and resource © OECD 2015

CIRCLE

Costs of Inaction and Resource scarcity: Consequences for Long-term Economic growth

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8

Climate Change Responding to complexity with analysis of least-cost policies Economics of climate change mitigation The OECD is assessing the economic costs and benefits of climate policies. Our analysis focuses on least-cost policy mixes to reduce emissions, the benefits of linking carbon markets, phasing out fossil fuel subsidies, ensuring sufficient financing, and how to address concerns about carbon leakage and competitiveness impacts of climate policies. The Environmental Outlook to 2050 makes projections of climate change, as well as environmental and economic impacts of climate policies. Equity considerations have gained prominence in the face of current economic and financial challenges. New work will examine the distributional consequences of carbon taxes by household types, sectors or regions.

The OECD helps countries identify and implement effective and efficient policy mixes to meet their climate commitments through analyses of the broad policy mix (economic instruments, regulations, incentives for technological innovation) as well as advice on how to best implement policy reforms.

Key Publications • Built to Last: Designing a Flexible and Durable 2015 Climate Change Agreement (2014) • The Role of the 2015 Agreement in Mobilising Climate Finance (2014) • OECD Environmental Outlook to 2050: The Consequences of Inaction (2012) www.oecd.org/env/cc

The OECD, together with the IEA, provides the Secretariat to support the Climate Change Expert Group, a non-negotiating forum where climate negotiators can discuss key issues on the negotiating agenda. There is a large body of work on the measurement, reporting and verification (MRV) of mitigation actions and support; finance and matching of

www.oecd.org/env/cc/ccxg.htm

finance to action; low-emission development strategies; and market mechanisms including sectoral approaches for mitigation and “market readiness”. © OECD 2015

OECD WORK ON

Adaptation to climate change Efforts to reduce GHG emissions need to be complemented with policies and incentives to adapt to the effects of a changing climate. The OECD is working to support governments in planning and implementing effective, efficient and equitable adaptation policies.

Environment

OECD analysis also examines the roles of innovation and the private sector in driving adaptation. A pioneering 2011 report focused on the private sector’s engagement in adaptation, including factors that act as incentives or barriers to action.

OECD research examining trends in innovation to develop more climate-resilient crops indicates rapidly increasing interest in the field in recent decades.

Regional adaptation cost curves Adaptation costs (percentage GDP) 2.5 2.0

India Sub-Saharan Africa Western Europe

1.5

Low-middle income countries

1.0

Middle income countries

0.5 0

United States Japan China

0 0.2 0.4 0.6 Adaptation (as a fraction of gross damages reduced) Source: Based on the AD-RICE model.

The OECD supports countries and development co-operation agencies to manage adaptation as part of development activities. The report on National Climate Change Adaptation: Emerging Practices in Monitoring and Evaluation (2015) identifies four key tools that can be used to enhance learning and assess countries’ progress in adapting to climate change.

Analysis of climate resilience in development planning shows how countries are taking concrete steps to build resilience to climate change. Two country case studies, Ethiopia and Colombia, are explored in detail.

Key Publications • Economics of Adaptation: Moving from Theory to Practice (2015) • Climate Change Adaptation: Emerging Practices in Monitoring

The OECD is examining how economic analysis can inform adaptation responses. The majority of OECD countries have developed national strategies to prepare for climate change. Analysis of progress to date has emphasised the need to improve decision makers’ ability to understand and use climate data to make decisions that are robust in the context of uncertainty about the future. © OECD 2015

and Evaluation (2015) • Climate Resilience in Development Planning: Lessons from Colombia and Ethiopia (2014) • Designing and Implementing National Adaptation Planning Lessons from OECD Countries (2013) www.oecd.org/env/cc/adaptation.htm

9

10 Financing action on climate change Public and private financing for climate action needs to be scaled up significantly in the coming years to ensure that the goal of holding global warming below two degrees (2°C) is achieved. Successfully tackling climate change also requires urgent action to scale-up and shift existing public and private investments towards low-carbon and climateresilient (LCR) infrastructure. Choices made today on the types and location of critical infrastructure will lock in future emission levels and the resilience of our economies to a changing climate.

A broad range of policy interventions are needed. Given the current strains on public finance, mobilising investment in LCR infrastructure will require leveraging both domestic and international private investment, including institutional investors, who currently only allocate a small percentage of their assets to infrastructure.

The OECD’s Policy Guidance for Investment in Clean Energy Infrastructure is a non-prescriptive tool to help policy makers identify ways to mobilise private investment in clean energy infrastructure. In partnership with interested countries, the Policy Guidance is now being applied to specific country contexts in Clean Energy Investment Policy Reviews currently being launched.

…In OECD countries, instititutional investors such as pension funds and insurance companies held USD 93 trillion in assets in 2013. Direct investment in infrastructure project of all types accounted for only 1% of large OECD Pension Fund asset allocation in 2013. Large pension fund allocation to sustainable energy investment was much smaller - only 3% of that 1% share.

DID YOU KNOW

conditions to scale-up private investment in LCR infrastructure. A publication in 2015 will gather lessons from case studies to provide guidance to policy makers.

During the 2014 meeting of the OECD Council at Ministerial Level, Ministers asked the OECD, the International Energy Agency (IEA), the International Transport Forum (ITF) and the Nuclear Energy Agency (NEA) to offer Member and Partner countries guidance on how to best align policies for the transition to a low-carbon and climate-resilient economy. The draft final Report will be presented during the 2015 MCM and will point to a range of areas where policies could be aligned to facilitate the low-carbon transition.

Deliberately or not, our regulatory and fiscal policies have been ‘wired’ around a fossil fuel world. Not only have our economies locked-in carbon-intensive behaviours, they

The OECD has also developed a Green Investment Policy Framework to help governments to improve enabling © OECD 2015

OECD WORK ON

South Africa) for release in 2015 (OECD, 2015 forthcoming). In addition, the IEA estimates the value of fossil-fuel consumption subsidies in developing and emerging economies to be USD 548 billion (IEA, 2014).

have also locked in carbon-friendly policies. The Aligning Policies for the Transition to a Low-Carbon Economy (APT) project outputs will help inform discussions leading to the COP 21 meeting in Paris (2015).

Fossil-fuel support measures

Environment

In 2013, the OECD identified and inventoried over 550 individual support mechanisms that directly or indirectly encourage the production or consumption of fossil fuels across its member countries (OECD, 2013). The overall value of these support measures was then estimated to be between USD 55 and USD 90 billion per year for the period 2005-11. Work is currently underway to update this information and extend the exercise to major emerging economies (e.g. Brazil, China, India, Indonesia, Russia, and

Key Publications

• Aligning Policies for the Transition to a Low-Carbon Economy (2015) • Mapping Channels to Mobilise Institutional Investment in Sustainable Energy (2015) • Policy Guidance for Investment in Clean Energy Infrastructure: Expanding Access to Clean Energy for Green Growth and Development (2015) • Overcoming the Barriers to International Investment in Clean Energy (2015) • Inventory of Estimated Budgetary Support and Tax Expenditures for Fossil Fuels (2015, 2013) • IEA World Energy Outlook (2014)

DID YOU KNOW

© OECD 2015

…that removing fossil fuel consumption subsidies could cut world GHG emissions by at least 10% in 2050?

• Institutional Investors and Green Infrastrcuture Investment: Selected Case Studies (2013) • Effective Carbon Prices (2013)

www.oecd.org/env/cc/financing.htm

www.oecd.org/investment/green.htm

11

12

Biodiversity Promoting conservation and sustainable use of biodiversity and ecosystems Economics of biodiversity Biodiversity loss is one of the four priority areas featured in the OECD Environmental Outlook to 2050.

OECD analysis focuses on the economic aspects of biodiversity – enhancing understanding of how biodiversity and ecosystems can be valued, and how these values can be captured through policy instruments and incentives to support biodiversity conservation and sustainable use. The objective is to promote policies that are environmentally effective, economically efficient and distributionally equitable.

OECD work on biodiversity also supports the work of the UN Convention on Biological Diversity.

Scaling up biodiversity instruments Recent OECD work has focused on financing mechanisms for biodiversity, including how to better engage the private sector. This work examines lessons learned from existing biodiversity instruments, such as payments for ecosystem services (PES), and environmental fiscal reform, to provide insights on how such instruments can be scaled up. In 2015-16, work will focus on the economics of marine biodiversity, including marine protected areas.

Sources of loss in Mean Species Abundance (MSA) to 2050 MSA, (%) 100

Infr+encr+frag Climate change

90

Nitrogen

80

Former land-use 70

Forestry Pasture

60

2010 2030 2050

2010 2030 2050

Bioenergy 2010 2030 2050

0-50

2010 2030 2050

Given recent and projected trends in biodiversity loss and degradation, there is an urgent need for: greater and more ambitious use of policies including economic instruments; more cost-effective use of existing finance for biodiversity and indicators to monitor progress; and mainstreaming of biodiversity in other sectors of the economy. Work has, for example, focused on the effective design and implementation of biodiversity offsets.

OECD

BRIICS

RoW

World

Note: 100% MSA implies an undisturbed state.

Infr+encr+frag: Infrastructure + encrouchment + fragmentation Source: OECD Environmental Outlook to 2050; output from IMAGE

Food crop Remaining MSA Š OECD 2015

OECD WORK ON

Monitoring and evaluation A key challenge in efficiently allocating biodiversity finance is the need to ensure appropriate design and implementation of biodiversity instruments so as to best achieve their intended goals. This includes the need to develop appropriate indicators for biodiversity instruments, and ensuring robust monitoring and reporting frameworks.

Indicators, for example, are critical to assess trends, establish business-as-usual baselines, quantify benefits, target biodiversity expenditures and enable the assessment of policy interventions over time. Recent work is looking at policy response indicators for biodiversity, for incentives (Aichi Target 3) and for resource mobilisation (Aichi Target 20).

Environment

The OECD also monitors external development finance targeting biodiversity objectives through its Creditor Reporting System using the biodiversity “Rio Marker”.

This is one of five statistical policy markers used by the OECD Development Assistance Committee (DAC) to monitor external development finance for environmental purposes. In 2010-12, total bilateral biodiversity-related aid commitments by OECD DAC members allocated about USD 5.6 billion on average per year, representing 4.4% of total bilateral official development assistance (ODA).

Key Publications • The Economics of Marine Biodiversity (2016) • Mainstreaming Biodiversity into Development (2016)

Mainstreaming biodiversity into sectoral and development policies The drivers of biodiversity loss and degradation often stem from policies in other sectors and areas such as agriculture, fisheries, forestry, and climate change. Linkages between biodiversity and other sectoral policies are complex and greater efforts are needed to mainstream biodiversity into decision-making processes across the economy. In 2015-16, OECD analysis will focus on how to enhance synergies and address trade-offs between biodiversity and development policy, including development co-operation.

© OECD 2015

• Biodiversity Offsets: Effective Design and Implementation (2015) • Biodiversity Policy Response Indicators (2015) • The Role of National Ecosystem Assessments in Influencing Policy Making (2014) • Scaling up Finance Mechanisms for Biodiversity (2013) • OECD Environmental Outlook to 2050: The Consequences of Inaction (2012) www.oecd.org/env/resources/biodiversity.htm

DID YOU KNOW

…that biodiversity is projected to decline by a further 10% by 2050 without more ambitious policies to protect it?

13

14

Biodiversity-related official development assistance (ODA) Principal

Significant

% of total ODA

6

5% 5%

5

4% 4%

4

3% 3

3% 2%

2

2% 1%

1

1% 0

0% 2004-06

2007-09

2010-12

Š OECD 2015

OECD WORK ON

Water Achieving water security OECD Horizontal programme on water This programme is undertaken by the Environment Policy Committee (EPOC) in partnership with the Agriculture, Regional Development Policy, Regulatory Policy and Development Assistance Committees. Work in 201516 synthesises recent OECD work on water and will develop a recommendation of the OECD Council on water resources management. The recommendation will provide comprehensive guidance for the reform of water policies in OECD and partner countries.

A major horizonatal report, Water and Cities: Ensuring Sustainable Futures (2015), focuses on the urban water management challenge. It provides policy guidance on sustainable urban water financing, urban-rural water linkages, urban water governance and innovation.

The economics and governance of water Increased levels of water security contribute to economic growth and development. However, achieving water security is complex and requires governments to address and manage a range of water-related risks (scarcity, floods, pollution, eco-system resilience). The report Water Security Š OECD 2015

Environment Environment

for Better Lives (2013) identified innovative approaches for dealing with water risks. It has informed work on water in the context of adaptation to climate change, and on water allocation mechanisms.

Water resources allocation is gaining traction as an issue.

Water is already over-allocated in a number of basins, and the OECD Environmental Outlook to 2050 projects the situation will become more severe, as demand for water keeps expanding and uncertainty about future water availability grows. The report Water Resource Allocation: Sharing Risks and Opportunities (2015) provides guidance on the design and the reform of water allocation regimes. It proposes a “Health Check� to assess robustness of existing regimes.

Work in 2015-16 focuses on the management of water quality, with an emphasis on policy instruments and on urban water pollution. Further work is being undertaken on sustainable management of water in agriculture, more specifically on groundwater use in agriculture and on policy approaches to droughts and floods.

The Global Dialogue on Water Security and Sustainable Growth, a joint initiative by the OECD and the Global Water Partnership, emphasises the importance of water security for growth. It highlights stylised development pathways that countries can follow, based on their water resources endowment and on their investments in infrastructures and institutions.

15

16 OECD work on the critical area of financing for water services, water management and water infrastructure continues. A key element of this is a joint initiative with the World Water Council on financing infrastructures for a water-secure world.

The OECD Water Governance Initiative was set up as an international multi-stakeholder network where delegates from public, private and not-for-profit sectors share good practices in support of governance in the water sector. It has led to the development of the draft OECD Principles on Water Governance, which will be considered by the OECD’s Council in 2015. The governance of water regulators is also a major focus of OECD work.

The OECD is a key implementing partner of the European Union Water Initiative (EUWI) in ten countries of Eastern Europe, the Caucasus and Central Asia (EECCA). Ongoing policy reforms in the region aim at sustainable water resources management, better water supply and sanitation systems, and enhanced transboundary co-operation on

from international practitioners, in the framework of national policy dialogues on water.

Water Policy Dialogues have so far been undertaken in Mexico, the Netherlands and Brazil. They have helped to inform the water policy reform agenda.

Ten countries of Eastern Europe, the Caucasus and Central Asia (EECCA, comprising of Armenia, Azerbaijan, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Russian Federation, Tajikistan, Turkmenistan, and Ukraine) are currently adopting a range of policy reforms with regard to water management under the National Policy Dialogues in cooperation with the EU Water Initiative (see also the section on Environment and Development in EECCA).

….that a majority DID YOU KNOW...

...that a majority of water allocation regimes

surveyed by the OECD have an abstraction charge? However, in a majority of cases, the abstraction charge does not reflect water scarcity.

water basins.

National policy dialogues on water The OECD supports ambitious water policy reforms in selected countries, on demand. These combine robust analyses of water economics and governance with insights

© OECD 2015

OECD WORK ON

• OECD Principles on Water Governance (2015)

5 000

• Policies to Manage Floods and Droughts in Agriculture (2015)

4 000

Future Challenges (2014) • Climate Change, Water and Agriculture: Toward Resilient Systems (2014) • Water Governance in Turnisia, and in Jordan: Overcoming the Challenges to Private Sector Participation (2014) • Water Policy Reforms in Eastern Europe, the Caucasus and Central Asia: Achievements of the European Union Water Initiative since 2006 (2014) • Water Security for Better Lives (2013) • Water and Climate Change Adaptation: Policies to Navigate Unchartered Waters (2013) • Meeting the Water Reform Challenge (2012) • Managing Water for All: An OECD Perspective on Pricing and Financing (2009) www.oecd.org/water

© OECD 2015

2 000

Domestic

1 000 0

Irrigation

OECD

BRIICS

RoW

2050

• Water Governance in the Netherlands: Fit for

Livestock

2000

Resilient Systems (2014)

3 000

2050

• Climate Change, Water and Agriculture: Toward

Manufacturing

2000

• Groundwater Use in Agriculture in OECD countries (2015)

Electricity

2050

Opportunities (2015)

Km3 6 000

2000

• Water Resources Allocation: Sharing Risks and

Global water demand

2050

• Water and Cities: Ensuring Sustainable Futures (2015)

2000

Key Publications

Environment

World

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Nitrogen Management Developing a framework for nitrogen management policies Addressing human impacts on the nitrogen cycle In its unreactive form, nitrogen is abundant, making up nearly 80% of the earth’s atmosphere. But all known forms of life need nitrogen in a reactive (fixed) form that is bonded to carbon, hydrogen, or oxygen, most often as organic nitrogen compounds (such as amino acids), ammonium, or nitrate. For example, reactive nitrogen is an essential input for plants to grow and thus to food production.

Since the 1950s and as part of efforts to achieve food and energy security, reactive nitrogen production has greatly increased, causing unprecedented changes to the global nitrogen cycle. This is largely due to the increased production of nitrogen fertiliser, by far the largest human source of reactive nitrogen. During the twentieth century, mankind has also produced increasingly other forms of reactive nitrogen as a by-product of combusting fossil fuels and as a component of wastewater.

The abundance of anthropogenic sources of nitrogen in terrestrial, aquatic and atmospheric ecosystems has adverse effects on public health and the environment. For example, ocean dead zones are rapidly increasing because

of excess nutrients (and warming waters). There are more than 400 ocean dead zones in the world seas today (from 20 in the 1950s). And the outlook is grim, as rivers discharges of nutrients into the sea are projected to continue increasing (see Figure on next page).

The OECD project on the human impacts on the nitrogen cycle, supported by the OECD Nitrogen Expert Group, is assessing the use of different policy instruments to manage the unwanted release of nitrogen.

The nitrogen project aims to take a holistic view of nitrogen policies across a wide range of emitting sectors, including agriculture, energy, industry, transport and households.

Work in 2014 provided a conceptual framework for the analysis of nitrogen policies and surveyed country policies.

Based on country case studies, 2015-16 will provide in-depth analysis of instruments and instrument mixes to address atmospheric pollution (e.g. smog and ground level ozone) and water pollution (e.g. eutrophication), and review and assess the coherence of nitrogen-specific policies with broader agricultural, wastewater and transport aims. Š OECD 2015

OECD WORK ON

Environment

Work is also underway to monitor economy-wide nitrogen flows and develop nitrogen indicators for use in green growth studies and in policy evaluation.

Key Publication •

Policy Instruments to Manage the Unwanted Release of Nitrogen into Ecosystems (2016)

River discharges of nitrogen into the sea

1950

1970

2000

2030

2050

Millions of tonnes of N per year

16 14 12 10 8 6 4 2 0 Arctic Ocean

Atlantic Ocean

Indian Ocean

Medit + Black Sea

Pacific Ocean

Source: OECD (2012), “Water”, in OECD Environmental Outlook to 2050: The Consequences of Inaction, OECD Publishing, DOI: http://dx.doi.org/10.1787/env_outlook-2012-8-en.

© OECD 2015

© OECD 2015

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Environmental Policies and Economic Outcomes Ongoing empirical work sheds light on the economic effects of environmental policies The effects of environmental policies on economic performance are a subject of heated debate. On the one hand, environmental policies have been argued to burden economic activity, as they raise costs without increasing output and restrict the set of production technologies and outputs. On the other hand, the Porter Hypothesis claims that well-designed environmental policies can encourage innovation, gains in efficiency and profitability, which can outweigh the costs of compliance. Empirical investigations so far have been constrained by the lack of internationally comparable measures of environmental policies.

The stringency of environmental policies has been increasing across the OECD1 Indicator value - 2012 5

Indicator value - 1990/1995

OECD average - 2012

More stringent

4

3

2

1

0

Joint work between the OECD Environment Directorate and the Economics Department on Environmental Policies and Productivity Growth has laid the ground for empirical analyses of the economic effects of environmental policies.

It provided quantitative proxies measuring the stringency and competition-friendliness of environmental policies. In particular, the newly-developed indicator of Environmental Policy Stringency (EPS) provided a comparable, crosscountry and over-time measure of the aggregate stringency of selected environmental policy instruments (see Figure).

The new EPS indicator was used in empirical analysis to gauge the effects on multifactor productivity growth – at the macroeconomic, industry and firm levels. Importantly, effects of tightening environmental policies were found to be relatively short-lasting with no evidence of harm to overall productivity growth. They did not depend on how stringent the policies were already, but were found to strongly depend on the firms’ (and industries’) technological © OECD 2015

OECD WORK ON

advancement. Moreover, the work provided some evidence that flexible, market-based instruments, such as taxes, are more supportive to productivity growth.

Environment

The BEEP indicator and measures of environmental policy stringency OECD EPS (de jure, 2012)

http://oe.cd/oq

5 DNK More stringent environmental policies

Importantly, some aspects of environmental policy design may create additional administrative burdens or advantages to existing companies and industries. The work provided cross-country evidence that stringent environmental policies can be designed in ways that are more (or less) friendly to new firm entry and competition - as captured by the Burdens on the Economy due to Environmental Policies (BEEP) indicator (see Figure). International evidence shows that such aspects can and should be minimised, in particular as achieving both environmental and economic objectives needs new, cleaner ideas, technologies and business models to develop.

NLD

4

NOR

CHE

AUT

SWE

DEU

CAN POL JPN

KOR 3

ESP

USA FRA

GBR

AUS BEL

2

IRL

HUN

PRT

GRC

ITA

1 0.5

1

1.5

2

2.5

3

3.5

4

4.5

Total BEEP indicator

Policies more burdensome to entry and competition

WEF EPS (perceived , 2012) 7

Note: The top panel compares the Environmental Policy Stringency indicator (see Botta and Kozluk, 2014) and the Burdens on the Economy due to Environmental Policies Indicator (Kozluk, 2014). The bottom panel compares the World Economic Forum Executive Opinion Survey responses on how stringent is environmental regulation in

More stringent environmental policies

AUT

NLD

JPN

5 SVK

NZL ISL PRT

SVN HUN

POL

ZAF KOR

SWE

NOR

BEL AUS IRL EST USA CZE FRA CAN

GBR

DEU

DNK

CHE

6

ISR

CHL

ESP ITA

HRV MEX

4

GRC

TUR

a given country perceived to be. Scatterplots represent the most recent values: 2012 for environmental policy stringency, beginning 2013 for BEEP.

3 0.5

1

1.5

2

2.5

Policies more burdensome to entry and competition

Š OECD 2015

3

3.5

4

4.5

Total BEEP indicator

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22 Better understanding of how environmental policies affect business behaviour – such as decisions to engage in investment (locally or internationally), innovation, trade or to relocate – is fundamental for developing more effective and less costly green growth policies and smarter regulations. In 2015-16, work will focus on further data collection to improve and extend the Environmental Policy Stringency indicator to allow deeper and broader empirical analysis. Firm and industry level data will also be explored.

Empirical analysis will also be extended to other determinants of GDP per capita across domestic and international dimensions.

Key Publications • Economic Policy Reform 2015: Going for Growth (2015) • Do Environmental Policies Matter for Productivity Growth? Insights from new Cross-Country Measures of Environmental Policies (2014) • Empirical Evidence on the Effects of Environmental Policy Stringency on Productivity Growth (2014) • Measuring Environmental Policy Stringency in OECD Countries – A Composite Index Approach (2014) • The Indicator of Economic Burdens of Environmental Policy Design – Results from the OECD Questionnaire (2014) • Environmental Policies and Productivity Growth: A Critical Review of Empirical Findings (2014)

www.oecd.org/environment/do-environmental-policies-matter-for- productivity-growth.htm

© OECD 2015

OECD WORK ON

Environment

Environmental Policy Tools and Evaluation Ensuring policies are economically efficient and environmentally effective Economic instruments and policy mixes The OECD undertakes fact-based analysis of policy instruments and mixes of instruments to help governments design and implement environmentally effective and economically efficient policies. The OECD’s focus on policy instruments such as taxes, tradable permits and voluntary approaches, as well as regulation, makes an important contribution to integrating environmental protection and economic growth.

The OECD is developing in-depth and detailed analyses of the taxation of energy use, as well as support to fossil fuels extraction or use in member and partner countries.

This information will be updated and expanded further in 2015-16 and will be extended with analytical work on reform.

A project on effective carbon prices estimated the costs to society per tonne of CO2 eq abated using different policy instruments in selected sectors. It showed clearly that these costs were lower for taxes and emission trading systems than for other instrument categories.

Š OECD 2015

Policy evaluation Recent work on policy evaluation has focused on an analysis of the costs to society of outdoor air pollution. It found that in 2010 these costs amounted to USD 1.7 trillion for OECD countries. For China, the costs were estimated at USD 1.3 trillion, and for India, USD 0.5 trillion.

Work in 2015-16 focuses on developing more refined methods for assessing the morbidity-related costs of air pollution and other environmental pressures.

Analyses have been made of the income distribution impacts of different categories of energy taxes. In 2015-16, this work will be deepened further, with analyses of approaches to address negative impacts of energy and water pricing.

23

24 OECD work on environmental compliance assurance has reviewed how governments promote, monitor and enforce compliance with environmental laws and regulations.

Further work in 2015-16 will focus on performance indicators and mechanisms to promote national coherence in environmental enforcement.

Key Publications • Cost-Benefit Analyses and the Environment: Recent Developments (2016) • The Cost of Air Pollution: Health Impacts of Road Transport (2014) • Effective Carbon Prices (2013) www.oecd.org/environment/tools-evaluation www.oecd.org/env/taxes

Tax rates per litre of unleaded petrol and diesel in selected OECD member countries 0.9 0.8

Petrol Diesel

0.7

EUR per litre

0.6 0.5 0.4 0.3 0.2 0.1 0.0

Source: OECD database on environmental policy instruments

www.oecd.org/env/policies/vsl

Spatial Planning Instruments and the Enviroment (SPINE) In 2015-16, OECD work focuses on the evaluation of the effectiveness of spatial planning instruments in achieving environmental and economic objectives. This evaluation relies on empirical analysis of the identification of the effects of different forms of urban structure on human exposure to air pollutants; the effectiveness of spatial policies in containing urban sprawl and in mitigating the risks of natural hazards and preventing their consequences; and the impact of open space conservation policies on housing and land prices, development density, and local government budgets.

The development of an operational framework describing land use patterns and their environmental and economic implications, and an inventory and typology of spatial planning systems and land use policy instruments used across OECD countries, will pave the way for empirical analysis. © OECD 2015

OECD WORK ON

Environment

Households and the environment OECD work provides new insights to better understand households’ environmental behaviour and how policies affect their decisions in the real world. A periodic survey on Environmental Policy and Individual Behaviour Change (EPIC) of more than 10 000 respondents across a number of countries provides empirical evidence to improve the design of environmental policies in residential energy use, water consumption, transport, organic food, and waste generation and recycling.

…that households’ exposure to environmental taxes can enhance public support for them: households charged by weight or volume of waste generated express greater support for such systems than those not facing unit based waste charges?

DID YOU KNOW

Key Publications A report on the survey published in 2014 analysed the relationship between public policy, household attitudes and norms, and decisions with significant environmental consequences. For example, public opinion can impose significant constraints on the use of environmental taxes and financial incentives. In 2015-16, empirical work in this area focuses on the analysis of the spillover effects of electricity pricing policies on household green investment, and the analysis of the impact of urban structure on individual life satisfaction.

© OECD 2015

• Greening Household Behaviour: Overview from the 2011 Survey Revised edition (2014) • Greening Household Behaviour: A Review for Policy Makers (2014) • Greening Household Behaviour: Energy, Food, Transport, Waste, Water (2014) www.oecd.org/env/consumption-innovation/households.htm www.oecd.org/env/consumption-innovation/behaviour.htm

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26

Resource Productivity and Waste Reducing, reusing and recycling materials and resources Sustainable materials management and waste The OECD is developing policies that incentivise and encourage waste prevention, minimisation and recycling.

Current work focuses on promoting Sustainable Materials Management (SMM) in order to limit waste generation in the first place. Using materials and resources more efficiently requires more integrated approaches towards the environmental impacts associated with their extraction, transportation and use, as well as waste disposal.

In 2015-16, the OECD is focusing on practical guidance for policy makers on how to implement SMM policies, based on material- and products‑specific case studies and with a focus on specific policy instruments. A report on extended producer responsibility will be released and an inventory of

waste prevention measures across the OECD countries will be developed.

Key Publication • Supplementary Guidance on Extended Producer Responsibility (2015)

Material flows accounting The OECD has established a knowledge base on material flows and resource productivity, and has made advances in the development of common measures systems and indicators.

Municipal Waste Generation, 2012 Kg/cap 800 700 600

…that at least 4% of annual GHG DID YOU KNOW emissions could be mitigated if waste management practices were improved, such as through more material recovery?

500 400 300 200 100 0

Source: OECD Key Environmental Indicators (2014)

© OECD 2015

OECD WORK ON

Key Publications • Material Resources, Productivity and the Environment (2015) • Sustainable Materials Management: Making Better Use of Resources (2012) • Guidance Manual for the Control of Transboundary Movement of Recoverable Wastes (2009) • Measuring Material Flows and Resource Productivity (2008) www.oecd.org/env/waste www.oecd.org/env/indicators-modelling-outlooks/resourceefficiency.htm

© OECD 2015

Environment

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Sectoral Policies: Transport, Agriculture Integrating environmental concerns into sector policies Transport

there is a need to shift investment towards sustainable transport infrastructure. The OECD is applying the Green Investment Policy Framework to the transport sector (see also section on Financing Action on Climate Change).

Transport underpins economic and social development, allowing more efficient allocation of resources and increased mobility for people. Yet, there are challenges related to the environmental impacts of transport and globalisation can aggravate these challenges. A study published in 2014 indicates that the cost to society of air pollution caused by road transport in OECD countries could be in the order of USD 0.9 trillion per year.

Key Publications • The Cost of Air Pollution: Health Impacts of Road Transport (2014) • The Diesel Differential: Differences in the Tax Treatment of Gasoline and Diesel for Road Use (2014) • Personal Tax Treatment of Company Cars and Commuting

These costs are being increased by an ongoing shift from petrol to diesel vehicles. A working paper issued in 2014 discusses the rationale for the tax preference given to diesel vis-à-vis petrol in most OECD countries.

Two other working papers discuss the income tax treatment of the benefits to employees of having a company-owned car at their disposal and analyse their fiscal and social costs.

Expenses: Estimating the Fiscal and Environmental Costs (2014) • Environmental and Related Social Costs of the Tax Treatment of Company Cars and Commuting Expenses (2014)

www.oecd.org/environment/greening-transport

DID YOU KNOW

…that ships are responsible for 2-4% of global man-made CO2 emissions and 15% of other air pollutants?

Transport is the second largest contributor to global greenhouse gas emissions. To avoid lock-in into carbonintensive and climate-vulnerable transport infrastructure,

© OECD 2015

OECD WORK ON

Agriculture The Environment Directorate contributes to work led by the Trade and Agriculture Directorate to strengthen policies to reduce the negative impacts of agriculture on the environment, to reinforce the positive impacts, and to develop and collect agrienvironmental indicators. (see also the section on Water).

In 2015-16, the OECD agri-environmental work will focus on climate change in agriculture, notably via the analysis of synergies and trade-offs between adaptation, mitigation and productivity, the implications of future water risk hotspots, land-use planning and ecosystem services, monitoring progress and assessing the role of the private sector towards green growth in agriculture.

Key Publications • Fostering Green Growth in Agriculture: The Role of Training, Advisory Services and Extension Initiatives (2015) • Public Goods and Externalities: Agri-environmental Measures in Selected OECD Countries (2015) • The Role of Public Policies in Promoting Adaptation (2015) • Green Growth Indicators for Agriculture: A Preliminary Assessment (2014) • Modelling Adaptation to Climate Change in Agriculture (2014) • Environmental Co-benefits and Stacking in Environmental Markets (2014) www.oecd.org/agriculture/sustainable-agriculture

© OECD 2015

Environment

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Safety of Chemicals, Pesticides, Biotechnology & Nanomaterials Protecting human health and the environment Chemical safety The chemicals industry is one of the world’s major economic sectors. The products of the chemical industry are worth about EUR 3.8 trillion annually.

The OECD Environment, Health and Safety (EHS) Programme aims to foster international co-operation to ensure the safety of chemicals and chemical products like pesticides, biocides, manufactured nanomaterials, and the products of modern biotechnology. It also aims to avoid barriers to trade at the same time.

Mutual Acceptance of Data (MAD) The OECD Council Acts on the Mutual Acceptance of Data for the assessment of chemicals (MAD) are international agreements, which set the policies and provide the instruments that governments and industry need to test the safety of chemicals and chemical products. OECD countries must accept safety test data which has been developed in other countries using the OECD Test Guidelines and following the OECD Principles of Good Laboratory Practice.

Non-tariff barriers to trade are minimised by harmonised policies and instruments, and duplicative testing is

avoided, saving governments and industry time and money.

Increasingly non-OECD economies are joining the MAD system, with Argentina, Brazil, India, Malaysia, South Africa and Singapore as full adherents; Thailand provisional adherents; and others expected to join soon.

Sharing the regulatory burden for pesticides and industrial chemicals All OECD countries regulate chemicals, pesticides and products of modern biotechnology. By using the same methodologies for determining the safety of these products, it is possible for countries and industry to share the burden of testing and even evaluation in some cases. Countries work together in the OECD to share the work load required for registering pesticides and biocides and for notifying, registering or evaluating industrial chemicals.

DID YOU KNOW

…that by working together through the OECD, governments and industry save over EUR 150 million annually?

© OECD 2015

OECD WORK ON

Environment

Safety of manufactured nanomaterials OECD countries have been addressing the human health and environmental safety implications of nanomaterials since 2006. In 2013, the OECD Council recommended that its Member countries apply existing international and national chemical regulatory framework to manage the risks associated with manufactured nanomaterials. Amongst other things, this Recommendation clears the way for nanomaterials to become subject to the Mutual Acceptance of Data. To this end, work is continuing to evaluate whether existing test methods for assessing the safety of chemicals are suitable for nanomaterials. A number of projects are underway to develop test guidelines appropriate for nanomaterials.

Co-operative testing of selected nanomaterials OECD and non-OECD governments have been working with industry, to pool expertise and funding to test the human health and environmental safety effects of 11 nanomaterials, which are currently in commerce. This testing work was completed recently and the data will be made publicly available.

New and more efficient tools for getting hazard information Much information on the hazards associated with specific chemicals is developed through tests in the laboratory.

However, other promising approaches such as computer simulations called (quantitative) structure-activity relationships, known as (Q)SARs, have the potential to provide information on the hazards of chemicals. Such approaches can reduce the time and cost of testing, as well as the need for animal testing. Through OECD, member countries are looking at how such approaches can be used more routinely in a regulatory context.

Š OECD 2015

Work is also underway at the OECD to investigate how (Q)SAR approaches can be combined with results from toxicogenomics (the study of the response of a genome to hazardous chemicals) and from high-throughput screening in vitro assays (that can be applied rapidly to thousands of chemicals) in an integrated way to predict the effects of chemicals in animals and humans.

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32 Safety of bio-tech products The majority of OECD countries and many others have a system of regulatory oversight in place to assess the safety of products of modern biotechnology. The most common products of this type are genetically engineered crop plants used in agriculture. The OECD works to ensure that the information used in safety assessment, and the methods used to collect that information, are shared amongst countries. Recent focus has been on major agricultural commodities such as soy bean, maize and cotton. Today, there is a greater focus on crops important in the tropics such as cassava and papaya.

Preventing major chemical accidents The OECD Programme on Chemical Accidents addresses a subject that concerns everyone who uses or handles hazardous chemicals, works in a chemical plant, or lives near one. This programme helps public authorities, industry, labour and other interested parties to prevent chemical accidents and to respond appropriately if one occurs. The major output of the programme is the Guiding Principles for Chemical Accident Prevention, Preparedness and Response which are continuously updated. These principles provide advice to public authorities, industry, employees and their representatives as well as members of the public potentially affected in the event of an accident. These Guiding Principles are complemented by a series of safety performance indicators, which serve as a guide for key

stakeholders including public authorities and industry, to determine if their implementation of the Guiding Principles has led to improved chemical safety. More recently, the OECD has published Corporate Governance for Process Safety: Guidance for senior leaders in high hazard industry to establish best practices for senior decision makers who have the authority to influence the direction and culture of their organisation.

Key Publications • OECD Guidelines for the Testing of Chemicals (series) • Safety Assessment of Foods and Feeds Derived from Transgenic Crops (2015) • Guiding Principles for Chemical Accident Prevention, Preparedness and Response (2015) • Cutting Costs in Chemicals Management: How OECD Helps Governments and Industry (2010) • Safety Assessment of Transgenic Organisms: Volumes 1-4 (2010) • Good Laboratory Practice: OECD Principles and Guidance for Compliance Monitoring (2005) www.oecd.org/chemicalsafety © OECD 2015

OECD WORK ON

Environment

Environment in the Global Economy Making development and environment compatible and mutually supportive Environment and development Economic growth and development are intricately linked to the sound management of environmental resources. It is the poorest who rely most on environmental resources and are most affected by their degradation. Continuing collaboration between the Environment Policy Committee (EPOC) and the Development Assistance Committee (DAC) aims to support integration of environment and development issues. The main focus on climate change and on capacity development for environmental management.

The Policy Guidance on Integrating Adaptation into Development Co-operation helps development co-operation agencies and developing countries to integrate adaptation within development activities and to “climate-proof� development. OECD analysis also examines the role of monitoring and evaluation (M&E) in ensuring that adaptation interventions are effective, efficient and equitable. Current work explores the methodological challenges for adaptation M&E and building blocks for measuring progress at the national level. Work for 2015-16 focuses on risk-transfer mechanisms and urban adaptation. Š OECD 2015

Weak environmental governance and capacity constraints affecting sustainable management of natural resources in developing countries can undermine the achievement of key development and green growth objectives. The OECD report Greening Development: Enhancing Capacity for Environmental Management and Governance offers guidance on how to enhance the capacities of key stakeholders in both developing countries and in development co-operation agencies to integrate the environment into national planning and budgetary processes. This has recently been complemented with the development of an online training course.

33

external development finance to developing countries reached USD 37 billion in 2013 (as recorded in OECD34 DAC statistics).

only, USD 9.6 billion (26%) adaptation only, and USD 4.8 billion (13%) consists of activities designed to address both adaptation and mitigation.

CHART 1. Climate-related development finance in 2013 Commitments, USD billion

Climate-related Development Finance in 2013

13 bn ADA PT

Bilateral principal

Bilateral significant

MULTILATERAL

BOT H 13%

26%

BILATERAL

TOTAL 37 BN

ION AT

10 bn

14 bn

61%

MITIGAT

ION

GREEN Programme). These are done through robust policy analysis, diffusion and adaptation of good international practices, capacity development, policy dialogue at national and regional levels, and pilot application of policy tools. The EAP Task Force helps EECCA countries to make the best use of available finance and enhance dialogue with private sector and donors. It also contributes to the “Environment for Europe” process.

Trade and environment The Environment Directorate works with the Trade and

Agriculture Directorate to better understand interactions between environment policy and international trade.

Note: Aggregate figures reflect bilateral ODA and OOF flows from members of the OECD DAC and the UAE, identified as targeting climate One focus has been trade in environmental goods and change as either a principal or significant objective based on the “Rio markers”, and climate-related multilateral flows from seven MDBs services, including a 2014 report indicating that stringent Note: Aggregate figures reflect bilateral ODA and OOF flows from members of the OECD and the GEF. DAC and the UAE, identified as targeting climate change as either a principal or significant environmental regulations can lead to increased trade objective based on the “Rio markers”, and climate-related multilateral flows from seven For the first time, the OECD’s Development Assistance Committee (DAC) statistics capture an integrated in environment goods. In 2012, a report on illegal trade MDBs and the GEF. picture of both bilateral and multilateral climate-related external development finance flows. This increases in anenvironmentally senstive goods addressed data and transparency through the collection and publication of detailed activity-level information. In addition, this provides improved recipient-level perspective, avoids and supports consistency and robustness through the Environment and double-counting development in EECCA use of a statistical system with standardised definitions and bases of measurement. The OECD Environment Directorate serves as the Secretariat ofthan thetheTask Force for the Implementation of development Financing climate change is broader USD 100 billion goal: accounting for climate-related finance is broader than is reported as climate finance in National Communications and Biennial thewhat Environmental Action Programme (EAP Task Force) in Reports to the UNFCCC. Many OECD DAC members, when reporting towards their quantified UNFCCC goals, draw on their Eastern Europe, the Caucasus and Asiaof (EECCA). climate-related development finance, as reported to the DAC, but onlyCentral count a share this (see box page 8 for further details).

Projects identified for 2015-16 continue to be organised 1 around two main themes: strengthening water management (implemented mainly under the EU Water Initiative framework); and market incentives and policy reforms for greening growth (principally in the context of the EaP © OECD 2015

OECD WORK ON

policy challenges related to illegal trade in wildlife, fish, waste, chemicals and timber. Recent work has focused on environmental labelling schemes, providing guidance to governments on how to respond to multiplication of labelling schemes.

Environment

Key Publications • The Potential Benefits of Transboundary Co-operation between Georgia and Azerbaijan in the Kura River Basin (2015) • Sustainable Business Models for Water Supply and Sanitation in Small Towns and Rural Areas in Kazakhstan (2015)

In 2015-16, new work focuses on trade and climate change, looking at how physical impacts due to climate change may effect trade patterns and also examining interaction between the international negotiation processes in trade and in climate change. Work will also continue to track and evaluate the use of environmental provisions in regional free trade agreements.

Co-operation with key emerging economies Key Partners (Brazil, China, India, Indonesia and South Africa) are invited to co-operate in all areas of OECD work on environment, in particular on green growth, climate change, water, biodiversity, environmental information, environmental indicators and policy instruments.

Environmental Performance Reviews (EPR) of South Africa and Colombia were published in 2013 and 2014 respectively, and Brazil is currently being reviewed. A broader group of partner countries is invited to Global Forums on Environment on various environmental issues, providing a regular framework to substantiate the dialogue with nonOECD countries. Global Forums in 2015-16 will focus on issues including innovation, climate change and CIRCLE. © OECD 2015

• Inventory of Energy Subsidies in the EU Eastern Partnership Countries (2015) • Creating Market Incentives for Greener Products: Policy Manual for the EU Eastern Partnership Countries (2014) • Greening Development: Enhancing Capacity for Environmental Management and Governance (2012) www.oecd.org/env/outreach/eap-tf.htm

…that in 2014 a group of 14 economies, including many OECD members, have begun negotiations on a plurilateral agreement to liberalise trade in environmental goods? Environmental goods include renewable energy technologies, water and waste treatment products, air pollution control technologies, and environmental equipment.

DID YOU KNOW

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Green Growth Aligning economic and environmental goals The OECD launched its Green Growth Strategy at the Ministerial Council Meeting in May 2011. It responded to a mandate given by 39 countries, when they signed the “OECD Green Growth Declaration” in 2009, comitting to “strengthen their efforts to pursue green growth strategies as part of their responses to the crisis and beyond, acknowledging that green and growth can go hand in hand”.

The key message of the Green Growth Strategy is that the environment and the economy can no longer be considered in isolat ion, but t hat environmental considerations need to be an inherent part of future economic policymaking and development planning.

Importantly, the Strategy argued that green growth cannot be a mere add-on to the mainstream reform agenda, but requires a reassessment of growth policies and priorities to ensure that their design and implementation better take into account environmental impacts.

If implemented in structural reforms, green growth policies can unlock new growth opportunities by various channels.

Well-designed green growth policies will ensure that market participants feel the social costs of using environmental assets, thus leading to a more efficient use of resources and natural assets. Better price signals for environmental externalities would also strengthen innovation and foster demand for new, environmentally more efficient goods and services, creating new markets and hence the potential for new job opportunities.

Furthermore, stable green growth policies will enhance investor confidence through greater predictability in how governments deal with major environmental issues, and green fiscal reform can support fiscal consolidation and growth, as revenues from pricing externalities rise and harmful subsidies are phased out.

Monitoring progress Green growth policies need to be founded on a good knowledge of environmental developments, the factors that affect growth and their linkages with well-being.

© OECD 2015

OECD WORK ON

To monitor progress and evaluate results, the OECD developed a measurement framework and a set of 26 indicators that capture the main features of green growth: the environmental and resource productivity of the economy, the natural asset base, the environmental dimension of quality of life, and the economic opportunities provided by a greener growth. To facilitate communication with the public and policy makers, a few headline indicators were selected. The work is part of the OECD’s broader agenda on measuring progress and well-being. A selection of updated indicators, illustrating the progress made by OECD countries since the 1990s, is available in Green Growth Indicators 2014.

Work is underway to improve the indicators, develop the statistical basis and implement environmental accounting in line with the SEEA. The focus is on headline indicators, particularly on natural resources and sub-soil assets, environmentally adjusted productivity growth, carbon and material productivity, land cover, and population exposure to air pollution.

Countries like the Slovak Republic, Slovenia, the Czech Republic, Korea, Mexico, Germany and the Netherlands, have applied the OECD measurement framework to assess their economy in terms of green growth. In a joint project with UNIDO, Colombia, Costa Rica, Ecuador, Guatemala,

Š OECD 2015

Environment

Paraguay and Peru are applying the indicators to identify key challenges and improve the choice and design of policy instruments.

The OECD also facilitates the exchange of experience and good practice on developing and applying a green growth measurement framework in the countries of Eastern Europe, the Caucasus and Central Asia (EECCA). This includes activities under the OECD Environmental Action Programme Task Force in EECCA (EAP Task Force), and the EaP GREEN project funded by the European Union. Ongoing projects in the region raise awareness about the benefits of using green growth indicators, identify good practices, and implement pilot projects. In March 2015, an EECCA regional workshop showcased how synergies among the fields of environment, green growth/economy and sustainable development could be exploited in the view of developing effective national approaches towards measuring green growth. www.oecd.org/env/outreach/eap-tf.htm

Tailoring green growth strategies to individual countries and regions The OECD is supporting countries in their efforts to design and implement strategies for greener and more inclusive growth, through its core advice in country-specific and multilateral surveillance, including Economic Surveys, Environmental Performance Reviews, Investment Policy

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38 Reviews, Reviews of Innovation Policy, the Green Cities programme and Going for Growth. Through these, the OECD is providing guidance tailored to the needs of individual countries.

The OECD is working with other international organisations and partner countries to examine how green growth can be applied in the specific context of developing countries. The OECD report Putting Green Growth at the Heart of Development provides a platform for partner countries to indicate their interest in collaborating with the OECD to shape a green agenda that is feasible and relevant for them and addresses the aspirations of their citizens.

The report Towards Green Growth in Southeast Asia was launched in November 2014 at the Asia Low Emissions Development Strategies Forum in Indonesia. Southeast Asia’s booming economy offers tremendous growth potential, but also large and interlinked economic, social and environmental challenges. The region’s current growth model is based in large part on natural resource exploitation, exacerbating these challenges. Carried out in consultation with officials and researchers from across the region, this report provides evidence that, with the right policies and institutions, Southeast Asia can pursue green growth and thus sustain the natural capital and environmental services, including a stable climate, on which prosperity depends.

www.oecd.org/greengrowth

Š OECD 2015

OECD WORK ON

The “Greening Economies in the European Union’s Eastern Neighbourhood” (EaP GREEN) programme is being implemented by the OECD in co-operation with UNECE, UNEP, and UNIDO to assist the European Union’s Eastern Partnership (EaP) countries (Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine) to move towards a green economy by decoupling economic growth from environmental degradation and resource depletion.

The programme responds to commitments made by countries, the European Union and international partners in several international forums: the Warsaw Eastern Partnership Summit, the Seventh “Environment for Europe” Ministerial Conference, and the Rio+20 Summit. www.green-economies-eap.org

© OECD 2015

Environment

Green growth is also being integrated in OECD’s sector- and issue-specific work to cover key areas such as energy (jointly with the IEA), food and agriculture, innovation, green investment, green business models, green jobs, biodiversity, water, rural development and others.

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40 The Green Growth and Sustainable Development Forum at the OECD (GG-SD Forum) The GG-SD Forum is an initiative established by the OECD as a vehicle for facilitating dialogue among its Committee experts on cross-cutting green growth and sustainable development issues, to build on and complement the extensive work already underway in individual Committees and to maximise synergies across them. The GG-SD Forums operate as a series of annual conferences or workshops, focusing each year on a different issue of relevance to more than one OECD Committee.

The 4th Green Growth and Sustainable Development Forum, on “Enabling the Next Industrial Revolution: The Role of Systems Thinking and Innovation Policy in Promoting Green Growth” will be held in December 2015.

The theme of the 5th Green Growth and Sustainable Development Forum will cover “Spatial Planning, Landuse and Urban Green Growth” and will be held in 2016. www.oecd.org/greengrowth/ggsd-forum.htm

The Green Growth Knowledge Platform (GGKP) The OECD has joined forces with the Global Green Growth Institute, UNEP and the World Bank to establish the GGKP. Launched in January 2012, the GGKP is an international knowledge-sharing platform that identifies and addresses major knowledge gaps in green growth/green economy theory and practice. It aims to provide practitioners and policymakers with better tools to foster economic growth and implement sustainable development. The GGKP held its 3rd Annual Conference in January 2015 on the theme “Fiscal Policies and the Green Economies Transition: Generating Knowledge-Creating Impact.” www.greengrowthknowledge.org

© OECD 2015

OECD WORK ON

Environment

Key Publications • Towards Green Growth? Tracking Progress (2015) • Green Growth Indicators 2014 (2014) • Tools for Delivering Green Growth (PDF) (2011) • Towards Green Growth: A Summary for Policy Makers (PDF) (2011) • Towards Green Growth: free version (2011) • Towards Green Growth – Monitoring Progress: OECD Indicators (2011)

Green growth studies and papers:

The Green Growth Studies series aims to provide in-depth reviews of the green growth issues faced by different sectors. The OECD Green Growth Papers complement the OECD Green Growth Studies series, and aim to stimulate discussion and analysis on specific topics and obtain feedback from interested audiences. www.oecd.org/greengrowth

© OECD 2015

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The Committee Structures The Environment Policy Committee (EPOC) implements the OECD’s Environment Programme. Established in 1971, EPOC consists of delegates from capitals and meets 1-2 times per year. The Committee holds meetings at the Ministerial level approximately every four years. The next meeting is envisaged for 2016.

EPOC oversees work on: country reviews, indicators and outlooks, climate change, natural resource management, policy tools and evaluation, environment and development, and resource efficiency and waste, supported by EPOC’s seven Working Parties.

EPOC also formally co-operates with other OECD Committees, including through Joint Working Parties on Trade and Environment and on Agriculture and Environment, as well as Joint Meetings of Experts on Tax and Environment and Joint Task Teams on environment and development issues. The committee also works with other OECD committees to ensure consistency of the messages as they pertain to environment as well as ensuring horizontal links with other work in the OECD. The Chemicals Committee, like EPOC, reports directly to the OECD Council. EPOC’s Working Party on Chemicals, Pesticides and Biotechnology and the Chemicals Committee together form the Joint Meeting which oversees the Environment, Health and Safety (EHS) Programme.

EPOC is a major partner in two horizontal programmes at the OECD, one on Green Growth and the other on Water.

The OECD Environment Directorate and the International Energy Agency (IEA) jointly serve as the Secretariat for the Climate Change Expert Group and undertakes studies of issues related to the negotiation and implementation of international agreements on climate change.

The OECD Environment Directorate also functions as the Secretariat for the Task Force for the Implementation of the Environmental Action Programme in Central and Eastern Europe (EAP Task Force). The Task Force provides a forum for dialogue and co-operation for countries in Eastern Europe, Caucasus and Central Asia (EECCA).

The Environment Programme is carried out in co-operation with international and regional organisations, e.g. the World Bank, UNEP, WTO, UNECE and Secretariats for UNFCCC, CBD and the Basel Convention. Key research institutes are also important partners, as is civil society represented through business, labour and NGOs. EPOC is actively engaging with key emerging economies through Global Forums on Environment. © OECD 2015

OECD WORK ON

OECD Council Environment Policy Committee

Working Party on Biodiversity, Water and Ecosystems Working Party on Climate, Investment and Development

Environment

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EPOC Organigramme

Working Party on Environmental Information Working Party on Environmental Performance Working Party on Integrating Environmental and Economic Policies • Working Group of National Co-ordinators of the Test Guidelines Programme • Working Group on Good Laboratory Practice • Working Party on Manufactured Nanomaterials

Working Party on Resource Productivity and Waste

• Task Force on Exposure Assessment • Task Force on Hazard Assessment

Other OECD substantive committees

• Working Group on Pesticides • Working Group on Chemical Accidents • Working Group on National Co‑ordinators of Test Guidelines Programme • Working Group on the Harmonisation of Regulatory Oversight in Biotechnology • Task Force for the Safety of Novel Foods and Feeds

Joint Meeting Chemicals Committee

• Working Group on Good Laboratory Practice

Working Party on Chemicals, Pesticides and Biotechnology

• Task Force on Biocides • Task Force on the Pollutant Release and Transfer Registers

• Joint Working Party on Trade and Environment • Joint Working Party on Agriculture and Environment • Joint Meetings of Tax and Environment Experts

• Ad Hoc Climate Change Expert Group (CCXG) with IEA • Task Force for the Implementation of the Environmental Action Programme in Central and Eastern Europe (EAP) © OECD 2015

44

Environment Directorate (ENV) The Environment Directorate is a multicultural team, encompassing some 120 international civil servants: economists, policy analysts, statisticians and administrative staff.

We are an extension to national governments’ analytical capacity, providing policy-relevant analysis and policy recommendations based on reliable environmental data, outlooks and cross-country experiences. We help countries to design environmental policies that are both economically efficient and effective at achieving their environmental objectives.

We also provide a forum for governments and representatives from business and civil society for constructive dialogue on how best to develop and implement environmental policies across OECD and other countries.

The ENV management team members are:

Director’s Office Simon Upton

Anthony Cox

Director

Deputy Director

simon.upton@oecd.org

anthony.cox@oecd.org

Tel.: +33 1 45 24 14 56

Tel.: +33 1 45 24 98 70

Š OECD 2015

OECD WORK ON

C limate Change, Biodiversity and Water Division

Shardul Agrawala

Head of Division

Head of Division

simon.buckle@oecd.org

shardul.agrawala@oecd.org

Tel.: +33 1 45 24 64 33

Tel.: +33 1 45 24 16 65

Environmental Performance and Information Division

Bob Diderich

Nathalie Girouard

Head of Division

Head of Division

bob.diderich@oecd.org

nathalie.girouard@oecd.org

Tel.: +33 1 45 24 14 85

Tel.: +33 1 45 24 84 82

Green Growth and Global Relations Division

Š OECD 2015

Environment and Economy Integration Division

Simon Buckle

Environment, Health and Safety Division

Environment

Central Management and Committee Branch

Kumi Kitamori

Amy Plantin

Head of Division

Head of Unit and Executive Secretary to EPOC

kumi.kitamori@oecd.org

amy.plantin@oecd.org

Tel.: +33 1 45 24 92 02

Tel.: +33 1 45 24 93 08

45

46

Recent Flagship Publications

Mapping Channels to

The Cost of Air Pollution:

Scaling-up Finance

Environmental

Mobilise Institutional

Health Impacts of Road

Effective Carbon Prices

Mechanisms for

Performance Reviews

Investment in

Transport

Biodiversity

Sustainable Energy

Š OECD 2015

OECD WORK ON

Environment

47

Forthcoming Flagship Publications • Aligning Policies for the Transition to a Low-Carbon Economy (2015)

• Overcoming Barriers to International Investment in Clean Energy (2015)

• Economic Consequences of Climate Change (2015)

• Water and Cities: Ensuring Sustainable Futures (2015)

• Economic Policy Reforms 2015: Going for Growth (2015)

• Cost-Benefit Analyses and the Environment (2016)

• Economics of Adaptation: Moving from Theory to Practice (2015) • Environment at a Glance (2015)

Environment Working Papers: This series is designed to make available to a wider readership selected studies on environmental issues prepared for use within the OECD.

• OECD Environmental Performance Reviews: Brazil, the Netherlands,

www.oecd.org/env/workingpapers.htm

Poland, Spain (2015); Chile and France (2016)

© OECD 2015

48

Selected Databases OECD/EEA Instruments Database Information on environmentally-related taxes, fees and charges, tradable permits systems, deposit-refund systems, environmentally motivated subsidies and voluntary approaches. www.oecd.org/env/policies/database

Value of Statistical Life (VSL) Data used in a meta-analysis of value of statistical life estimates from stated preferences surveys in environment, health and traffic risk contexts. www.oecd.org/env/policies/vsl

Transboundary Movement of Wastes destined for Recovery Operations Country-specific requirements for the application of the “OECD Decision on Transboundary Movements of Waste Destined for Recovery Operations”. www.oecd.org/env/waste/database

eChemPortal A Global Portal for information on properties of chemical substances. www.oecd.org/ehs/eChemPortal

Biotech Products Database Information and unique identifiers on products derived from using modern biotechnology which have been approved for commercial application. www.oecd.org/biotrack/productdatabase

Get free ENV reports and statistics Visit www.oecd.org/environment for a selection of free reports and data.

© OECD 2015

OECD WORK ON

© OECD 2015

Environment

49

More information on the OECD’s work on environment The Environment Directorate produces 20-30 titles a year in English and French, with summaries of selected titles translated into other languages (available for free on the OECD on-line bookshop).

W rite to us:

O rder our publications:

OECD Environment Directorate Communications Co-ordinator 2, rue André Pascal 75775 Paris Cedex 16 FRANCE env.contact@oecd.org

Browse titles on your screen before you buy: www.oecdbookshop.org

Be the first to know about the latest OECD publications on environment with our free e-mail alert service: www.oecd.org/OECDdirect

Subscribe to our OECDiLibrary and statistics services: www.oecdilibrary.org

Find Job Vacancies on the OECD Human Resources website at www.oecd.org/hrm.

Photo credits: Front cover: © vencav - Fotolia.com Page 8: © Soizick De Tilly and Pauline Tezier Page 13: © Pauline Tezier Page 19: © Nicolas Gascard – Fotolia

Page 17: © Elena Elisseeva – iStockphoto Page 20: © Brian Jackson – Fotolia Page 23: © Huguette Roe – Shutterstock

Page 27: © Mitch Hrdlicka – Thinkstock Page 30: © Stockbyte – Thinkstock

OECD PUBLICATIONS, 2 rue André-Pascal, 75775 PARIS CEDEX 16 PRINTED IN FRANCE – (00 2012 42 1) – NO. 90127 – 2012

ENVIRONMENT DIRECTORATE www.oecd.org/environment

February 2015

September 2015