GGBrochure 2023 WEB
GGBrochure 2023 WEB
GGBrochure 2023 WEB
GREEN GROWTH
January
2023
OECD WORK ON
GREEN GROWTH
Table of contents
1 OECD at a glance
2 What is green growth and why do we need it?
9 SPOTLIGHT—Navigating the twin transitions: Going green and digital
11 Green growth indicators
15 Green growth in country policy surveillance
19 Fiscal policy and green growth
23 Environmental policies and economic outcomes
27 A green transition that leaves no one behind
35 Behavioural insights for green growth
37 Greening SMEs
39 Green finance and investment
45 Trade and green growth
49 Innovation for green growth
53 SPOTLIGHT—Green innovation and the impacts of economic shocks
54 Green growth of key sectors: energy, transport, agriculture, industry, tourism and the ocean economy
69 A nature-positive economy: biodiversity, ecosystem services and water
75 Greening regions, cities and communities
1
OECD at a glance
W hat is the OECD? The letters stand for Organisation for
Economic Co-operation and Development. Those words,
broadly speaking, sum up what the Organisation does. For more
The OECD currently includes 38 member countries. Brazil, Bulgaria,
Croatia, Peru and Romania are accession candidate countries. Brazil,
the People’s Republic of China, India, Indonesia and South Africa
than 60 years, the OECD has been providing a forum in which are OECD Key Partners. The OECD also collaborates with more than
governments work together to seek solutions to common problems, 100 other economies, many of which participate in its committees
share experiences and identify best practices to promote better and adhere to its instruments.
policies for better lives.
The OECD has helped forge global standards, international Australia Japan
Me mbe r countr ie s
conventions, agreements and recommendations in areas such as Austria Korea
governance and the fight against bribery and corruption, corporate Belgium Latvia
responsibility, development, international investment, taxes, Canada Lithuania
environment, agriculture, to mention a few. The OECD also looks Chile Luxembourg
at issues that directly affect the lives of ordinary people, such Colombia Mexico
as school and health systems and jobs. Co-operation, dialogue, Costa Rica Netherlands
consensus and peer review drive the OECD as it seeks to fulfil its Czech Republic New Zealand
vision of a stronger, cleaner, fairer world economy and society. The Denmark Norway
OECD is a source of advice on almost all areas of policy making Estonia Poland
and implementation, and one of the world’s most trusted sources Finland Portugal
of comparable statistical data. It carries out its mission thanks to France Slovak Republic
over 200 committees and working groups of national experts and Germany Slovenia
decision makers, and a high-quality permanent Secretariat. Greece Spain
Hungary Sweden
Iceland Switzerland
Ireland Türkiye
www.oecd.org/about Israel United Kingdom
© OECD 2023 Italy United States
OECD WORK ON Green Growth 2
Russia’s invasion of Ukraine has resulted in a number of immediate Global material use projections
and longer-term policy challenges. The increase in energy prices and
Gigatonnes OECD BRIICS* Rest of the world
food prices is taking a heavy toll on the world economy. Growth has 80
0
2017 2040 2060 2017 2040 2060 2017 2040 2060
© OECD 2023
3
Evolution of GHG emissions by region:
At the same time, the urgency to act to address environmental Baseline projection 2010 to 2060
degradation has not subdued. Climate change, biodiversity loss, 70,000
and the progress in well-being achieved in the past 50 years for at 20,000
least three reasons:
10,000
153
transport and purification infrastructure is needed. 79
59
6 20 6
2019
(-62%) 22 44 (-55%)
(-96%) (-85%)
Yearly value in Mt
Baseline - 2060 Regional Action - 2060 Global Ambition - 2060
(percentage change compared to Baseline)
© OECD 2023 Source: OECD (2022) Global Plastics Outlook Policy Scenarios to 2060.
https://doi.org/10.1787/aa1edf33-en
OECD WORK ON Green Growth 4
The Inclusive Forum on Carbon Mitigation Approaches (IFCMA) is an initiative designed to help improve the global impact of
emissions reduction efforts around the world through better data and information sharing, evidence-based mutual learning and
inclusive multilateral dialogue. It brings together all relevant policy perspectives from a diverse range of countries from around
the world, participating on an equal footing basis, to take stock of and consider the effectiveness of different carbon mitigation
approaches. As of 30 January 2023, 133 countries around the world, representing around 91% of global GDP and covering around
83% of global emissions, have adopted net-zero carbon emissions targets.
Consistent with the principles of the multilateral climate policy architecture as set out in the Paris Agreement, countries use or
plan to use a widely varied set of emissions reduction policies – both price-based and non-price-based – as tailored to different
national circumstances. To achieve the shared global objective of net zero emissions, the key challenge is to optimise the
combined global impact of all these individual emissions reduction efforts. This is what the IFCMA will help to facilitate through
data and information sharing, mutual learning and inclusive multilateral dialogue.
website
• www.oecd.org/climate-change/inclusive-forum-on-carbon-mitigation-approaches/
© OECD 2023
OECD WORK ON Green Growth 6
The OECD horizontal project Net Zero+: Climate and economic resilience in a changing world is a major step in
mainstreaming climate change across the work of the OECD.
Action on climate has never been more urgent. The threat of crossing climate system tipping points means overshooting 1.5oC
will likely result in catastrophic consequences – accelerated climate action, on both mitigation and adaptation, is essential.
At the same time, the social and economic vulnerability exposed in different ways by COVID-19 and the war in Ukraine have
underscored the importance of making sure that approaches to climate policy are designed to be resilient. Equally, these global
disruptions have also offered opportunities to enhance climate policy efforts, in particular for accelerating the energy transition.
This has provided important lessons for designing effective and long-lasting climate policies that take into account the profound
economic and social implications of the net-zero transition – e.g., on public finances, labour markets and income distribution
Launched in 2021, the Net Zero+ project brings together findings from across the OECD’s multidisciplinary expertise to support
governments in designing climate policies that are effective, long-lasting and resilient to changing circumstances.
© OECD 2023
7
The OECD continues to support strategies for greener growth through its core advice in country-specific and multilateral
surveillance. The main outcomes include a more systematic account of green growth issues in its Going for Growth flagship
reports, Economic Surveys, Environmental Performance Reviews, Investment Policy Reviews, Innovation Policy Reviews
and Multi-dimensional Country Reviews of OECD countries and emerging economies. Green growth and climate change
are also integrated into the OECD’s sector and issue-specific work in key areas such as taxation, innovation, investment,
trade, industry, energy (with IEA), transport (with ITF), food and agriculture, tourism, skills and jobs, biodiversity and
water management, rural and urban development.
The framework of the OECD Green Growth Strategy provides While there is no “one-size-fits-all” prescription for implementing
a ‘green lens’ for looking at growth, development, and human green growth, the OECD’s analytical work over the past years
wellbeing. It aims to identify mutually reinforcing aspects of resulted in the ability to provide concrete targeted advice to
economic and environmental policy as well as synergies with the member and partner countries in mainstreaming green growth and
inclusiveness agenda. It recognises the full value of natural capital climate change into national and multilateral policies.
as a production factor along with other commodities and services.
It focuses on cost-effective ways of reducing environmental
pressures, to achieve a transition towards new patterns of
growth that will avoid crossing critical local, regional and global
environmental thresholds. Mainstreaming green growth in social
policies needs to aim to enhance equity and inclusiveness.
© OECD 2023
OECD WORK ON Green Growth 8
Green growth and the
Sustainable Development Goals
(SDGs) Key Publications and website
• The inequalities-environment nexus: Towards a people-centred green
Green growth is a subset of sustainable
development. It entails an operational policy transition (2021)
agenda that can help achieve concrete, • Towards Green Growth? Tracking Progress:
measurable progress at the interface of the Four years of the Green Growth Strategy (2015)
economy and the environment. It fosters the • Towards Green Growth? Tracking Progress: Key Findings and
necessary conditions for innovation, investment
and competition that can give rise to new Recommendations (2015)
sources of economic growth that are consistent • What we have learned from attempts to induce green growth policies? (2013)
with resilient ecosystems. • Towards Green Growth (2011)
• Tools for Delivering Green Growth (2011)
Green growth strategies need to pay specific
attention to the social issues and equity • www.oecd.org/greengrowth
concerns that can arise as a direct result
of greening the economy. This means that
strategies should be implemented in parallel
with initiatives focusing on the broader
economic, social and environmental pillars of
sustainable development. At the same time,
it should be recognised that lack of action to
green economies creates equity concerns as
disadvantaged households are often more
exposed and vulnerable to pollution and climate
change.
© OECD 2023
OECD WORK ON Green Growth 10
...Is an OECD initiative to provide a dedicated space for multi-disciplinary dialogue on green
growth and sustainable development. The GGSD Forum brings together experts from different
policy fields and disciplines, facilitates the exchange of knowledge and identifies potentials for
cross-fertilisation. It is a valuable supplement for the work undertaken in individual government
departments and ministries by addressing the horizontal, multi- disciplinary aspects of green
growth and sustainable development. In 2023 and 2024, the GGSD Forum will provide a venue
to discuss key findings and identify knowledge gaps in the context of the Horizontal Project on
"Building Climate and Economic Resilience in the Transformation to a Low-carbon Economy".
The GGSD Forum operates as annual conferences, focusing each year on a different cross-cutting
issue related to sustainable development and green growth. The GGSD Forum is open to stakeholders
and experts from OECD Committees, government ministries and agencies, academia, businesses
civil society and other international organisations.
The GGSD Forum is also a meeting point for policy makers and experts from OECD and partner
countries to exchange experiences and identify policy tools and best practices that respond to their
specific country circumstances.
© OECD 2023
11
© OECD 2023
OECD WORK ON Green Growth 12
basic principles of accounting and the pressure-state-response CO₂ productivity CO₂ productivity
(demand-based) (demand-based)
(PSR) model. The indicators provide an important building block for Low air pollution CO₂ productivity Low air pollution CO₂ productivity
exposure (production-based) exposure (production-based)
monitoring progress towards several SDGs, and for the International
Material productivity Material productivity
Programme for Action on Climate (IPAC) that harmonises and Low land consumption
(production-based)
Low land consumption
(production-based)
fills the gaps of existing data sources, and on key aspects of climate Environmentally Environmentally Environmentally Environmentally
related related related related
change policymaking, such as climate-related hazards. innovation taxation innovation taxation
Low income inequality GDP per capita Low income inequality GDP per capita
Note: Improvements shown here are determined by comparing results in 2020 (or last
available year) to 2015 («distance to the leader»). The black dashed line indicates no
change; values below that level indicate deterioration.
Source: OECD Green Growth Indicators (database), World Bank (2022).
https://stats.oecd.org/Index.aspx?DataSetCode=GREEN_GROWTH
© OECD 2023
13
+ Recycling
re-use,
remanufacturing, INVESTMENTS
substitution
investment
capital ENVIRONMENTAL goods & services ENVIRONMENTAL innovation
AND RESOURCE QUALITY OF LIFE trade
resources PRODUCTIVITY residuals
education
training
jobs
sink functions
NATURAL
resource ASSET BASE service
functions functions
Icons from TheNounProject.com
© OECD 2023
OECD WORK ON Green Growth 14
© OECD 2023
15
© OECD 2023
OECD WORK ON Green Growth 16
Economic Surveys have been increasingly focusing on As countries issued pledges for “building their economics back
climate change and other environmental issues with the aim of better” during the COVID-19 pandemic, the OECD Green Recovery
identifying and assessing policy complementarities and trade- Database collected and tracked information on COVID-19 recovery
off between environmental policies and other macroeconomic spending across the OECD and large economics with clear positive,
and structural polices while taking into account the specific mixed or negative environmental impact. The most recent data
circumstances each country faces. Surveys assessment of climate show that measures with a positive environmental impact amount
policy builds on the Framework to Decarbonise the Economy. to 33% of total recovery spending.
The Framework highlights the need for developing decarbonisation
strategies based on a wide policy mix consisting of three main Focusing primarily on non-OECD emerging economies, the Multi-
components: 1) emission pricing policy instruments; 2) standards dimensional Country Reviews (MDCRs) address socioeconomic
and regulations; 3) complementary policies to facilitate the issues of relevance to green growth. For example, the MDCRs
reallocation of capital, labour and innovation towards low-carbon of Western Balkans (2022) and Vietnam (2020) include chapters,
activities and to offset the adverse distributional effects of respectively, on green recovery and environmental management.
reducing emissions. However, there is no one-size-fits-all policy
mix, as feasible policy choices depend on countries’ industrial The Climate Actions and Policies Measurement Framework
structure, social preferences and political constraints. Some recent (CAPMF) provides a comprehensive internationally harmonised
Economic Surveys that have addressed climate change in depth climate-related policy database for 52 countries and the period
include the Survey of Denmark, Estonia, France, Greece, Iceland, 2000-2020. In addition, the Inclusive Forum on Carbon
Luxembourg, and the United Kingdom. Green growth features in Mitigation Approaches (IFCMA) was recently launched to support
every Survey’s key recommendations. Paris Agreement goals by improving mutual understanding of the
expected impact of a full range of policy approaches to reduce
Since 2019, the Going for Growth report includes environmental emissions. The IFCMA will collate the full range of mitigation policies
sustainability as an additional dimension in the framework to (regulatory, incentive-driven, price-based etc.), first by preparing
identify economy-specific policy priorities. a typology, and then making an assessment of effectiveness in
reducing emissions. It will involve the equal footing participation of
OECD member and non-member countries.
© OECD 2023
17
The OECD The OECD Investment The OECD Economic Surveys The Multi-dimensional
Environmental Policy Reviews seek to help encourage Country Reviews aim to
Performance countries improve domestic governments to design policies and strategies
Reviews examine conditions for investment focus on green that promote development
how countries’ in support of green growth growth issues, in a holistic sense, identifying
environmental objectives. Review of Thailand and periodically policies to remove constraints
policy frameworks (2021), provide an to sustainable development.
can support green growth, Myanmar assessment The Western Balkans (2022) and
including through pricing (2020), and of how Vietnam (2020) Reveiws focus
mechanisms and transition Vietnam environmental and growth respectively,
measures. Recent reviews (2018) policy recommendations on the green
include United Kingdom include interact, with more and more recovery and
(2022), Norway (2022), a green surveys covering green growth environmental
Finland (2021), Lithuania growth and climate issues in depth, management.
(2021), and Ireland (2021). focus. including Luxembourg (2022),
Fortcoming Environmental Environmental challenges the United Kingdom (2022)
Reviews (2023) include: will also be addressed in the Estonia (2022), Denmark (2021),
Israel, Portugal, Costa Rica, upcoming Investment Reviews France (2021), and Iceland
Germany and the United (2023) on Bangladesh and (2021). The upcoming Economic
States. the Economic Commumity of Surveys (2023) on Germany,
West African States (ECOWAS). Sweden and the European Union
will also include a focus on
environmental issues.
© OECD 2023
OECD WORK ON Green Growth 18
Nathalie Girouard
Environment Directorate
E-mail: Nathalie.Girouard@oecd.org
Jan Rielaender
Development Centre
E-mail: Jan.Rielaender@oecd.org
© OECD 2023
19
© OECD 2023
OECD WORK ON Green Growth 20
Countries have increased their use of carbon pricing through taxes or emissions trading systems,
with coverage increasing across sectors
Note: All GHG includes both CO2 and non-CO2 emissions. Percentages are rounded to the first decimal place.
Source: OECD (2022) Pricing Greenhouse Gas Emissions: Turning climate targets into climate action, https://doi.org/10.1787/e9778969-en
The Agricultural Policy Monitoring and Evaluation report shows The OECD is the only international organisation that measures
that half of support to agriculture in monitored countries is market and reports policy effort in the fisheries sector on an annual basis
distorting, inequitable and harmful to both the environment and through its Fisheries Support Estimate (FSE) database. Work
global food security. Only one sixth of budgetary support to will be undertaken to better understand the impacts of support
agriculture globally is spent in ways that are effective in promoting to fisheries on overfishing and overcapacity, the two overarching
sustainable productivity growth and agricultural resilience. concerns of global action on fisheries subsidies.
© OECD 2023
21
Source: OECD (2022) Pricing Greenhouse Gas Emissions: Turning climate targets into climate action, https://doi.org/10.1787/e9778969-en
The OECD Paris Collaborative on Green Budgeting aims at The report Green budgeting: A way forward identifies seven
helping countries to embed climate and other environmental goals key areas to support the development of green budgeting
within national budgeting frameworks. Currently, more than 50% of practices in making progress toward climate and environmental
OECD countries implement green budgeting and environmentally goals. Furthermore, a database with firm-level information on
related tax revenues were at 1.35% of GDP on average among the environmentally harmful support to selected industrial sectors (e.g.
38 OECD economies in 2020. aluminium, steel, cement, glass and petrochemicals) is also under
development.
© OECD 2023
OECD WORK ON Green Growth 22
© OECD 2023
23
Joint work between the OECD Environment Directorate and the The stringency of environmental policies has been
Economics Department on environmental policies and productivity increasing across countries
growth has laid the ground for empirical analyses of the economic EPS in 2020 EPS in 2000
Source: Kruse, T., et al. (2022), "Measuring environmental policy stringency in OECD countries:
© OECD 2023 An update of the OECD composite EPS indicator", https://doi.org/10.1787/90ab82e8-en
OECD WORK ON Green Growth 24
Greener growth requires stringent environmental policies that Using a new indicator of Climate Policy Uncertainty, recent work
are flexible and that minimise barriers to entry and competition. shows that uncertainty in climate policy making can reduce firms’
International evidence, as captured by the indicator of the Design investments, in particular in carbon-intensive industries. Clear
and Evaluation of Environmental Policies (DEEP), shows policy trajectories are important to encourage investments into
that the extent to which environmental policies create barriers much needed low-carbon technologies.
to competition (i.e. administrative burdens and discrimination
between entrants and incumbents) and the consideration given to
their economic effects in their design vary notably across countries.
Hence, stringent environmental policies can – and should - be
designed in order to minimize barriers to entry and competition.
© OECD 2023
25
© OECD 2023
OECD WORK ON Green Growth 26
© OECD 2023
27
© OECD 2023
OECD WORK ON Green Growth 28
balance and housing affordability. Ongoing work for the Greening OECD work also focused on specific demographics that are most
Mobility and Transport project takes stock of the distributional vulnerable to the impact of environmental degradation. Youthwise,
impacts of policies discouraging car use. Among others, the study which is the OECD’s Youth Advisory Board, was established to
examines whether road pricing, distance-based charges, the fuel bring the youth perspectives in OECD work. Youthwise members
tax and parking fees impose a higher burden on low-income are contributing to shaping OECD action on the green transition
groups, and the degree to which this may be context-specific. The by providing inputs to projects and joining the debate with high-
study identifies complementary measures that can increase the level government officials. Youthwise members participated to the
inclusiveness and public acceptability of transport policies that are OECD events at COP26 and COP27, the plenary session of the 2022
key to the transition to net zero. OECD Environmental Ministerial Meeting alongside the Secretary-
General and OECD Ministers, and contributed to the OECD’s
Beyond energy, also water policies can have distributional Horizontal Project on Climate and Economic Resilience.
implications if they raise water tariffs. Investment needs and more
stringent environmental and health standards can increase the Gender equality and environmental goals intersect and can be
costs of water supply and sanitation services globally. A review mutually reinforcing but insufficient attention has been paid into
of financing needs and capacities in 27 European Member States breaking the silos. The OECD report on Empowering Women
projects that, while these services remain affordable for the vast in the Transition towards Green Growth in Greece provides
majority of the population, fully reflecting additional costs into a framework for assessing environmental and climate policies
tariffs would bring average bills at 3-5% or more of households’ through a gender lens, and gender equality policies through an
budgets for the lowest decile of the population in several OECD environmental lens. The OECD report on Supporting women’s
countries. This would raise affordability concerns for these groups. empowerment through green policies and finance finds that,
even if the interlinkages that shape the gender-environment nexus
The OECD Environmental Performance Reviews of individual are starting to be acknowledged, further efforts are needed to
countries also regularly assess public participation in decision foster synergies between gender and environmental goals in policy
making, as well as citizens’ access to information, justice and design, sustainable finance approaches as well as in infrastructure
environmental education. Ease of access to information, education planning and implementation.
and justice is instrumental to ensure that (environmental) polices
are fair.
© OECD 2023
29
Climate change can have complex and far-reaching impacts on The report The inequalities-environment nexus Towards a
migration across regions and countries. The OECD is planning a people-centred green transition analyses jointly the consequences
foresight exercise on migration and environmental change, with of the environmental degradation and of environmental policies
particular focus on examining the policy options of anticipated on several well-being dimensions. The report concludes that
scenarios and the role of diaspora communities to support policy packages for an inclusive green transition should aim at: (i)
resilience. In addition, the Equitable Framework and Finance for mitigating the possible regressive impact of pricing environmental
Extractive-based Countries in Transition (EFFECT) provides a externalities, (ii) investing in human capital and upgrading skills to
toolbox for policy makers to chart just, realistic, and sustainable facilitate labour reallocation, (iii) addressing systemic inequalities
low-carbon pathways, consistent with development priorities. with sectoral and place-based policies, (iv) ensuring efficient and
responsive governance.
Climate change will also have significant implications for countries’
health services, in the form of new and different demands for health
care arising from changing patterns of disease or acute events
associated with extreme weather. Lower income households are
often more vulnerable to such impacts because of lower baseline
health condition, ability to invest in adaptation technology,
and access to good quality healthcare. The Health Committee is
investigating the complex relationships between health and climate
change, including through the development and strengthening of
indicators to measure both climate change’s impact on health, and
the contribution of the health system to climate change.
© OECD 2023
OECD WORK ON Green Growth 30
© OECD 2023
31
© OECD 2023
OECD WORK ON Green Growth 32
performance in science tends to be lower. Better performers in Ongoing work will identify changes in skill demand arising from
science have, on average, more pro-environmental attitudes than the climate transition with focus on the European Union 2030
lower-performing students, and students with pro-environmental targets as stated in the Fit for 55 policy package. It will combine
attitudes are more likely to take part in actions that benefit the Big Data analysis with projections based on the ENV-Linkages
environment. If schools help students find an environmental sense- model. The OECD is also supporting countries in carrying out
of-purpose, this can mobilise their knowledge and propel them their own assessments and facilitating peer learning. The project
into action. Environmental education initiatives that target school Skills for the Green Transition is gathering information on how
communities as a whole and not just individuals are promising. governments define green jobs and green skills and how they
evaluate the skills requirements of the green transition and best
prepare the adult learning systems to cope with the changes
brought about by greening policies. Research on how this analysis
of changing skill needs feeds into employment, education, training
and migration policies is also being investigated.
© OECD 2023
33
© OECD 2023
OECD WORK ON Green Growth 34
© OECD 2023
35
Behavioural insights The OECD is also completing the third round of Household Surveys
on Environmental Policies and Individual Behaviour Change
(EPIC). The EPIC Survey benchmarks environmental attitudes,
for green growth behaviours and support for policies related to energy use,
transport, food consumption and circular economy practices across
countries. Preliminary findings indicate that convenience and
Environmental policies need to help individuals consider the affordability remain key household priorities in all domains. Future
environmental consequences of their activities. Insights from work will assess the extent to which socio-economic, geographic
behavioural sciences and economics can help policy makers better and policy-related factors drive environmental behaviours and
understand the mechanisms driving individual decision-making analyse hypothetical policy scenarios using four discrete choice
and design policies that facilitate behavioural change. experiments included in the survey.
The working paper Fighting climate change: International Insights from behavioural sciences and economics have been used
attitudes toward climate policies, which is based on survey of to strengthen policy impact, in interaction with regulatory and
more than 40 000 respondents in twenty countries that account fiscal instruments, in country-specific OECD projects. The OECD
for 72% of global CO2 emissions, shows that support for climate worked with Israel to understand driving behaviours, anticipating
policies hinges on three key factors: the perceived effectiveness responses to congestion charges design and foster more sustainable
of the policies in reducing emissions, their perceived impacts on transport. Behaviourally informed instruments were considered
lower-income households, and expected personal gains and losses. in conjunction with investment and social policies to strengthen
The research also shows that several socioeconomic and lifestyle housing affordability in Latvia. The OECD BI team supported Italy
factors, including education and political leanings, are correlated in identifying opportunities to leverage behavioural economics to
with both policy views and beliefs about climate policies. Support support a green transition within the tourism sector. Further OECD
for carbon pricing strongly depends on the revenue use. It can research in this area includes an ongoing project on the role of
receive majority support if the revenues are used to invest in green behavioural insights in driving the circular economy transition in
technologies and recycled to vulnerable households. Italy.
© OECD 2023
OECD WORK ON Green Growth 36
As part of the Public Governance directorate’s “Governing Green” Key Publications and websites
initiative, the OECD Expert Group on Behavioural Insights • Overview Report on the EPIC Household Survey (forthcoming 2023)
is currently leading a working group of experts working in • Fighting climate change: International attitudes toward climate policies,
governments across 47 countries that focuses on three key areas; OECD Economics Department Working Papers (2022)
1) public awareness and support of green reforms, (2) improving • Policy Actions for Affordable Housing in Latvia (2020)
decision-making of policymakers to support green transition, and • Assessing Incentives to Reduce Traffic Congestion in Israel (2019)
(3) tackling misinformation related to climate change. • Leveraging the Smart Grid: The Effect of Real-Time Information on Consumer
Decisions (2018)
• Tackling Environmental Problems with the Help of Behavioural Insights (2017)
• The Rebound Effect in Road Transport: A Meta-Analysis of Empirical Studies
(2016)
• www.oecd.org/environment/consumption-innovation/households.htm
• www.oecd.org/environment/tools-evaluation/behavioural-experimental-
economics-for-env-policy.htm
Filippo Cavassini
Economics Directorate
E-mail: Filippo.Cavassini@oecd.org
Chiara Varazzani
Public Governance Directorate
E-mail: Chiara.Varazzan@oecd.org
Nicolina Lamhauge
Environment Directorate
E-mail: Nicolina.Lamhauge@oecd.org
© OECD 2023
37
© OECD 2023
OECD WORK ON Green Growth 38
Celine Kauffmann
Centre for Entrepreneurship, SMEs, Regions and Cities
E-mail: Celine.Kauffmann@oecd.org
Lucia Cusmano
Centre for Entrepreneurship, SMEs, Regions and Cities
E-mail: Lucia.Cusmano@oecd.org
© OECD 2023
39
© OECD 2023
OECD WORK ON Green Growth 40
Biodiversity and ecosystem services, and their related risks, impacts Regions and cities can use their budget to bridge climate funding
and dependencies are currently not integrated into financial on financial gaps. The OECD Subnational Government Climate
valuations. In collaboration with the European Commission (DG Finance Hub provides evidence and support along three main
REFORM) and the Hungarian Central Bank, the OECD has just areas: climate-significant expenditure and investment, revenue
launched a project on Developing a Supervisory Framework for for climate action, and green budgeting practices. The Hub aims to
Financial Risks Stemming from Biodiversity-related Losses. guide policymakers and their partners in enhancing international
The project will develop a supervisory framework to help the and national frameworks, programmes, and fiscal instruments that
Hungarian Central Bank and other central banks assess biodiversity- support subnational climate action, and to build the capacity of
related financial risks in the financial system, including transmission subnational governments to develop and implement their own
channels for physical and transition risks. climate action plans and policies.
© OECD 2023
41
© OECD 2023
OECD WORK ON Green Growth 42
Promoting Sustainable
Investment and Rethinking Six transformative areas to align financial flows
Infrastructure with low-emission, resilient infrastructure
© OECD 2023
43
Robert Youngman
Environment Directorate
E-mail: Robert.Youngman@oecd.org
Cecilia Tam
Environment Directorate
E-mail: Cecilia.Tam@oecd.org
© OECD 2023
OECD WORK ON Green Growth 44
© OECD 2023
45
Achieving greener growth will require innovative goods and services The report Securing reverse supply chains for a resource efficient
to enable factories and buildings to use energy more efficiently, and circular economy focuses on the opportunities and challenges
to reduce air and water pollution, to make the transition to more for governments to facilitate cross-border reverse supply chains and
sustainable uses of energy, and to provide sanitation and clean reverse logistics to close material loops, such as recycling waste and
drinking water. Many of these goods and services will be procured scrap into secondary raw materials, and extending product life by
locally, but some will only be available, or become available more promoting direct reuse, repair, refurbishment and remanufacturing.
cheaply, from foreign suppliers. Trade can help the environment
both through achieving a more efficient use of resources and by The report Incorporating environmental provisions in regional
serving as a conduit for the transfer of environmental technologies. trade agreements in chapters and articles dealing with
Trade can also help scale up sustainable business models and help trade in services explores ways in which RTAs can incorporate
economies shelter negative environmental shocks. environmental objectives in chapters and articles related to: (i)
non-tariff measures, technical-barriers to trade and regulatory co-
Circular economy policies, which largely take place domestically, operation, and (ii) trade in services, respectively.
have important interlinkages with international trade. OECD work
explores how to make circular economy policies and trade policies The report Climate Policy Leadership in an Interconnected
mutually supportive by mapping out potential misalignments and World: What Role for Border Carbon Adjustments? provides a
identifying opportunities to align and strengthen both policy areas. broad and evidence-based analytical perspective of the debate
around the possible role of a Border Carbon Adjustment (BCA)
to deal with climate change. The paper provides an overview of
different policy instruments that can limit carbon leakage, with a
particular focus on the BCA option, and offers a technical review of
the literature and of the legal specificities around BCA as well as of
alternative instruments.
© OECD 2023
OECD WORK ON Green Growth 46
The OECD has also been at the forefront of international efforts the volume of trade in environmentally- related goods; tariffs on
to identify and analyse trade in environmental goods and services environmentally-related goods; support measures for fossil fuels;
(EGS). Recent work provides evidence that trade in wind turbines enabling policy and regulatory environment for renewable energy;
provides access to technologies with a level of efficiency that the volume of trade in waste and scrap; and nutrient balances of
cannot be replicated domestically in importing countries. exported grains.
In an effort to better understand the relationship between domestic A retrospective of OECD work on trade and environment was
environmental regulations and international trade policies, the published in 2020. This report highlights the breadth and depth of
OECD has recently engaged in the construction of a set of policy the OECD analysis in this field and provides suggestions for future
indicators on trade and environment. This set of indicators aims to analysis.
shed light on topical debates regarding the interactions between
trade and environmental policies. Issues covered include: carbon
emissions embodied in trade; embodied raw materials in trade;
© OECD 2023
47
© OECD 2023
OECD WORK ON Green Growth 48
Rob Dellink
Environment Directorate Shunta Yamaguchi
E-mail: Rob.Dellink@oecd.org Environment Directorate
E-mail: Shunta.Yamaguchi@oecd.org
Evdokia Moïsé
Trade and Agriculture Directorate Grégoire Garsous
E-mail: Evdokia.Moise@oecd.org Trade and Agriculture Directorate
E-mail: Gregoire.Garsous@oecd.org
© OECD 2023
49
for green growth technologies - especially in the field of ocean observation - that
could contribute to ocean sustainability. It examines advances
that could lead to substantial improvements in data collection and
The world faces growing environmental pressures. The next analysis of the impact of climate change and human activity on
decades are critical to ensure a transition to a greener economy, marine ecosystems, while also contributing to the monitoring and
and innovation – the creation and diffusion of new ideas, products, reduction of the ecological footprint of ocean-related economic
processes and methods – is fundamental to this transition. activity.
Innovation covers not only technological innovation but also
innovation in business models, economic and social systems, and Inventive activity in selected environment-related
changes in lifestyles. technologies (High-value inventions (PF2), 3-year moving
average, world total, indexed on 1990=100)
The increase in the use of natural resources and materials in the 900
last century has been unprecedented. Global raw material use 800
700
rose at almost twice the rate of population growth. Digitalisation
600
can contribute to decoupling economic activity from natural 500
resource use and its environmental impacts. Digitalisation for the 400
200
the role of digital technologies in addressing market failures for
100
scaling up circular activities and in the effective delivery of circular 0
economy policies.
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
Water resource management Climate Change Mi�ga�on
Environmental management All technologies
© OECD 2023
OECD WORK ON Green Growth 50
Innovation is also key to reducing the environmental impacts of The use of agricultural feedstocks for fuel and chemicals, the
plastics. Quantifying environmentally relevant and circular so-called bioeconomy, is an area of great potential and need to
plastic innovation: Historical trends, current landscape and the integrate innovation with sustainability goals. Meeting Policy
role of policy develops new metrics to measure environmentally Challenges for a Sustainable Bioeconomy investigates: the use
relevant plastics innovation, derives trends over time and across of biomass as feedstock; the design and building of biorefineries
countries and analyses empirical links with public policies. for the manufacture of fuels, chemicals and materials, and also
for electricity generation; and the use of biotechnologies such as
The large emissions reductions needed to meet national net-zero synthetic biology, metabolic engineering and gene editing. A major
pledges and the objectives of the Paris agreement require rapid policy challenge remains the promotion of scale-up in better and
and systemic transformation. Coordination across multiple policy more efficient bio-refining.
areas and change in multiple “systems” (e.g. energy, transport,
buildings) is needed to deliver this system-wide transformation.
Mission-oriented innovation approaches (or MOIPs) can help to
promote such systemic change because of their integrated nature.
The on-going program on Mission oriented Innovation Policies
(MOIP) aims to assess the different ways in which mission-oriented
innovation policies are used to tackle the specific challenge of
reducing GHG emissions to combat climate change.
© OECD 2023
51
The OECD has been a pioneer in measuring the pace of innovation Additional on-going projects look at the relationship between
and diffusion through environment-related patents. Patent green innovation, policies and competitiveness. Innovative small
data have been used to empirically assess how public policies companies, often called “start-ups”, are crucial to the development
foster innovation and diffusion, including the effect of policy of highly innovative idea, including for green technologies. Ongoing
design characteristics on innovation rates, the interplay between work aims at providing an in-depth analysis of the green start-up
environmental policy and multilateral environmental agreements ecosystem across countries to understand the conditions needed
and international markets for innovation. Ongoing OECD work aims for small innovative companies to succeed. Additional ongoing
at developing new families of metrics to measure environmental work aims at empirically assessing the economic returns of firms
innovation beyond traditional patent metrics to better cover on innovation in cleaner technologies, and at developing practical
various types and stages of innovation. This new data can improve policy recommendations to support the radical technological
the basis for doing evidence-based assessment of environmental innovation that is necessary to reach climate neutrality.
policies.
© OECD 2023
OECD WORK ON Green Growth 52
Mario Cervantes
Directorate for Science, Technology and Innovation
E-mail: Mario.Cervantes@oecd.org
© OECD 2023
53
© OECD 2023
OECD WORK ON Green Growth 54
• Adopt transformative policies: Green policy action could be more efficient and effective if focused on systems as a whole,
so that – by design – systems require less energy and materials, and produce less emissions.
• Increasing productivity in a sustainable way. If resources are used more efficiently, production can be increased to meet
the demands of an expanding population with changing dietary and consumption habits while natural capital is conserved.
Higher priority needs to be given to research, development, innovation, education and information.
• Ensuring that well-functioning markets provide the right signals. Prices that reflect the scarcity value of natural resources
will contribute to greater efficiency. Economically inefficient and environmentally harmful subsidies should be phased-out.
The Polluter Pays Principle needs to be enforced through charges and regulations. Incentives should be provided for maintaining
biodiversity and environmental services.
• Establishing and enforcing well-defined property rights. Over-exploitation can happen when marine resources, land
and forests lack clearly defined rights and ownership.
• Addressing the political economy of reform. Addressing the distributional and competitiveness aspects of policy reform
to meet green growth objectives is essential.
© OECD 2023
55
Energy
Energy is a fundamental input to economic activity. However, a The OECD is working with countries to address misalignments
major transformation is required in the way we produce, deliver between domestic green objectives and existing policies. In
and consume it. The current energy system is largely dependent addition, the Clean Energy Finance and Investment Mobilisation
on fossil fuels, which pollute the air, and contribute significantly (CEFIM) programme aims to strengthen domestic conditions to
to carbon emissions. Improving the environmental performance of attract finance and investments in renewables, energy efficiency
energy transformation and consumption is a cornerstone of any and decarbonisation of industries in emerging countries.
attempt to promote green growth.
© OECD 2023
OECD WORK ON Green Growth 56
Transport The report Redesigning Ireland’s Transport for Net Zero Towards
Systems that Work for People and the Planet adopts a systemic
Transport underpins economic and social development, allowing approach to identify transformative policies to redesign passenger
more efficient allocation of resources. Yet, it is also a major surface transport systems in urban, suburban and rural areas.
contributor to greenhouse gas emissions and air pollution. The report calls for redefining the goal of transport systems as
sustainable accessibility (a combination of mobility and proximity),
The ITF 2021 Transport Outlook shows that total transport and for the prioritisation of three transformative policies (often
activity will more than double and CO2 emissions will increase by absent or at the margin of climate strategies): road space
16% by 2050 compared to 2015 under current policies. However, reallocation, the mainstreaming of shared on-demand transport
more ambitious transport decarbonisation policies could reduce modes (e.g. ebikes), and communication efforts to move away from
transport CO2 emissions by almost 70% in 2050 compared to 2015 car-centric mindsets. The report finds that vehicle electrification
and bring the goal of the Paris Agreement to limit global warming and carbon prices remain necessary, but that their scope is limited
to 1.5˚C into reach. Better-targeted actions to reduce unnecessary if implemented in isolation in car-dependent systems.
travel, shift to more sustainable transport modes, improve energy
efficiency, and rapidly scale up the use of low-carbon vehicles are Users in cities across the globe are rapidly adopting new
needed. Under the theme of “A Just Transition”, the ITF Transport mobility forms, helped by digital connectivity and electrification
Outlook 2023 examines the impacts of different policy measures technologies. The report Good to Go? Assessing the
on global transport demand and emissions over the next three Environmental Performance of New Mobility examines the life-
decades to 2050. As in previous editions, the analysis covers cycle performance of a range of new vehicles and services based
passenger and freight transport across all transport modes. on their technical characteristics, operation and maintenance, and
compares it with that of privately owned cars and public transport.
© OECD 2023
57
Several OECD and ITF reports focused on the challenges to adopt Fuel efficiency of conventional private vehicles is a key input in the
more sustainable transport modes in specific cities. The report design of several economic and environmental policies. Ongoing
Shared Mobility Simulations for Lyon develops five different work examines the evolution of fuel efficiency using data on cars
scenarios for shared mobility modes in the Lyon metropolitan entering the US market from 1984 to 2020 to isolate autonomous
area to weigh opportunities and challenges created by new shared technical change from the impact of environmentally relevant
transport services. policies. The study finds that 40% of the observed progress that
occurred can be attributed to regulatory policies, such as CAFE
The report Decarbonising Urban Mobility with Land Use and standards, and to drastic increases in gasoline costs.
Transport Policies: The case of Auckland, New Zealand provides
an evidence-based assessment of policies aiming to decarbonise Beyond road transport, policy action focuses also on the greening
urban passenger transport. The study examines the environmental of aviation and maritime transport. Maritime transport accounts
effectiveness and the economic implications of various instruments, for about 2.5% of global greenhouse gas emissions. The report
such as subsidies to public transport and electric vehicles, and road on Shipbuilding Market Developments includes an analysis on
pricing. The report also investigates the complementary role of how the new environmental regulation for the maritime sector
planning policies fostering urban development patterns in which is expected to impact ship retrofitting and replacement. The
public transport and soft mobility can proliferate. shipbuilding sector has started to produce greener ship in the future
using alternative fuels such as hydrogen, ammonia and methanol.
The paper Tackling Air Pollution in Dense Urban Areas: The case
of Santiago, Chile expands the analysis to urban areas that are less Carbon Pricing in Shipping explores the effectiveness of carbon
dependent on car but face challenges in reducing transport-related pricing, how it might be applied to the shipping sector and with
air pollution. what effects. It also evaluates recent proposals by countries to
introduce a price on shipping’s carbon emissions and examines
related policy issues.
The International Transport Forum (ITF) at the OECD is an intergovernmental organisation with
60 member countries. It acts as a think tank for transport policy and organises the Annual Summit
of transport ministers. ITF is the only global body that covers all transport modes. Its mission is
to foster a deeper understanding of the role of transport in economic growth, environmental
© OECD 2023 sustainability and social inclusion and to raise the public profile of transport policy.
OECD WORK ON Green Growth 58
Aviation’s contribution to global greenhouse gas emissions (GHGs) is The project Decarboning Transport in Emerging Economies
high and projected to grow. The OECD is improving and expanding helps countries identify effective measures and pathways to
publication of air emission accounts (AEAs), including of air emissions reduce transport CO2 emissions. Focusing on Argentina, Azerbaijan,
from air transport estimates, with statistics available on a monthly India, and Morocco, the initiative develops tailored quantitative
basis. The paper Greening international aviation post COVID-19 assessment frameworks, enhances national capacity, and facilitates
What role for kerosene taxes? highlights the contribution policy dialogues on the transport sector’s role in national CO2
that kerosene taxes could make to strengthen the incentives for reduction commitments.
investment and innovation in clean aviation technologies. Where
legal obstacles to taxing kerosene exist, these can be overcome by
renegotiating the relevant air service agreements..
© OECD 2023
59
© OECD 2023
OECD WORK ON Green
GreenGrowth
Growth 60
Net soil carbon sequestration (SCS), which occurs when the Key Publications and website
difference between CO2 removals and CO2 emissions is positives, • OECD-FAO Agricultural Outlook 2022-2031 (2022)
will likely need to play a key role in meeting the Paris agreement • Agricultural Total Factor Productivity and the environment: A guide to
objectives. The OECD has reviewed practices available and emerging best practices in measurement, OECD Food, Agriculture and
highlighted policy package for enhancing net SCS in agricultural Fisheries Papers (2022)
soils, including regulations and knowledge transfer policies. • Soil carbon sequestration by agriculture: Policy options, OECD Food,
Agriculture and Fisheries Paper (2022)
Policies need also strengthening resilience of agricultural sector to • Characterising agri-environmental policies: Towards measuring their
climate change and biodiversity loss. Increasing weather variability, progress, OECD Food, Agriculture and Fisheries Papers (2021)
natural hazards, and news pests and diseases require public and • Innovation, Productivity and Sustainability in Food and Agriculture (2019)
private actors to place a greater emphasis on ex ante risk reduction • Evaluating the environmental impacts of agriculture policies, Agriculture
measures and investments. The OECD framework for applying and Fisheries Papers (2019)
resilience thinking to risk management in agriculture has been • www.oecd.org/agriculture/
applied to assess how four OECD countries are mainstreaming
resilience into their agricultural risk management policy frameworks.
An upcoming publication will focus on climate change adaptation
policies to foster resilience in agriculture.
The OECD will also continue looking at responses to the climate Contact for more information
change and water challenges for the sector, analysing the
Guillaume Gruère
economic effects of climate mitigation strategies in agriculture,
Trade and Agriculture Directorate
and investigating political reform pathways to improve agriculture
E-mail: Guillaume.Gruere@oecd.org
water use.
© OECD 2023
61
© OECD 2023
OECD WORK ON Green Growth 62
© OECD 2023
63
The first step to realise the potential of the ocean economy is The sustainable development of the ocean economy is particularly
the collection of reliable and timely data on the sustainability relevant for developing countries, as they are on average more
of the ocean economy, the well-being and resilience of coastal reliant on ocean economy sectors than high-income countries.
communities, and the health of marine ecosystems. The OECD Yet, they only capture a small fraction of the global value added
contributes to this directly via its Sustainable Ocean Economy from the ocean economy. The OECD Sustainable Ocean for All
Database, which helps support SDG 14. Additionally, as the Initiative produced a comprehensive report quantifying the
knowledge base on marine ecosystems’ accounting builds, countries economic trends of the ocean economy across developing countries
could greatly benefit from refining the international environmental and identifying existing and innovative policy and financing tools
accounting guidelines and marine ecosystem services’ classification. to enhance its sustainability. In 2021, the “Blue Recovery Hubs”
The OECD is currently developing an experimental OECD satellite project was launched to assist developing countries in restarting
accounts on ocean economic activities to improve international and transforming their ocean economy sectors.
comparability and as a building block to a future ocean account.
Lastly, a new OECD foresight exercise, launched in 2022, will Recognising that healthy oceans depend on decisions taken on land,
provide a global outlook on the future of the ocean economy and the OECD project on Cities and Regions for a Blue Economy
develop key trends and data projections on the ocean economy to supports national and subnational governments in achieving
2045. resilient, inclusive, sustainable and circular blue economies. The
2022 OECD Global Survey on Localising the Blue Economy,
which collected 56 responses from subnational governments from
30 OECD and non-OECD countries, highlights the need to apply
a functional lens to the blue economy, developing city-basin
interlinkages on the ground.
© OECD 2023
OECD WORK ON Green Growth 64
Oriana Romano
Centre for Entrepreneurship, SMEs, Regions and Cities
Email: Oriana.Romano@oecd.org
© OECD 2023
65
Industry
The manufacturing industry is a major source of global carbon Low-carbon hydrogen plays a key role the net-zero transition of
dioxide emissions accounting for around 40% of the total. The several sectors. OECD work has recently focused on the industrial
shift to a circular and low-carbon production method is needed policies in place to support low-carbon hydrogen development
to meet the UN 2030 Sustainable Development Goals and the across countries. It concludes that a five-pronged approach
objectives of the Paris Agreement. The greening of industry implies would be need to accelerate its adoption: 1) supporting R&D and
a deep transformation, as well as multiple challenges. These include demonstration projects; 2) increasing the supply of renewable
scaling-up innovative technologies, investments, competitiveness, electricity; 3) introduce a comprehensive policy package, including
ensuring a global playing field, developing markets for green steel, carbon pricing and the phasing out of inefficient fossil fuel subsidies;
and social aspects. 4) reducing uncertainty, for instance by promoting international
standardisation; and 5) considering blue hydrogen as a short-term
The OECD undertook a comprehensive assessment of the existing option to facilitate the transition to green hydrogen.
policy package in the Netherlands to evaluate its consistency and
cost-effectiveness to reach its 2050 decarbonisation objectives in
the manufacturing sector. The analysis highlights the importance
of combining a strong commitment to raising carbon prices with
ambitious technology support (for mature and radically new
technologies, such as hydrogen). The review illustrates the trade-
off between short-term emissions cuts and longer-term technology
shift, as well as the consequences of competitiveness provisions on
reaching long-term climate goals.
© OECD 2023
OECD WORK ON Green Growth 66
The report on Green hydrogen opportunities for emerging and The highly competitive and greenhouse gas intensive nature of steel
developing economies presents a value chain approach to identify production makes its decarbonisation particularly challenging. To
priority areas for developing national hydrogen strategies, focusing support governments in addressing such challenges, the OECD steel
on emerging and developing economies. policy community – comprising the OECD Steel Committee and
the Global Forum on Excess Capacity - provides a unique forum for
The larger adoption of hydrogen in production and consumption dialogue, sectoral expertise, and policy focus. Recent contributions
process brought by the green transition may require the update pertain indicators for measuring steel decarbonisation progress, a
of risk and safety procedures. The project on Precaution in the brief supporting the COP27 Presidency’s call for implementation,
energy transition and improved knowledge for hydrogen and the monitoring of low-carbon emission steel projects.
risk regulation aims at fostering the energy transition in the
Netherlands by providing adequate precaution recommendations In addition, the OECD steel policy community has convened
and enhanced risk knowledge on hydrogen applications, and governments, industry and steel experts to further multi stakeholder
envisages the development of a risk-based regulatory framework dialogue. Forthcoming OECD Steel Committee’s decarbonisation
to facilitate the further use of hydrogen as an energy carrier to agenda will explore scrap and the circular economy, hydrogen as
consolidate the hydrogen economy. The programme on chemical a new strategic input, and how steel firms are shifting to the low-
accident prevention, preparedness and response is investigating carbon transition. In addition, the OECD steel policy community is
emerging trends in accidents from the energy transition, with a considering positioning as a platform to accelerate cooperation and
final report on current chemical accident trends and specific risk implementation of steel decarbonisation.
considerations for future applications of new energy sources to be
published in 2023.
© OECD 2023
67
© OECD 2023
OECD WORK ON Green Growth 68
© OECD 2023
69
A nature-positive economy:
biodiversity, ecosystem services and water
Biodiversity and ecosystem services OECD analysis focuses on the economic aspects of biodiversity
and aims at enhancing understanding of how biodiversity and
Biodiversity – covering species, ecosystems and genetic diversity associated ecosystems can be valued, and how these values can
- underpins all life and provides vital benefits to our societies and be captured through policy instruments and incentives to support
economies. Yet, pressures from land- and sea-use change, over- biodiversity conservation and sustainable use. The objective is to
exploitation of natural resources, pollution and climate change are promote policies that are environmentally effective, economically
contributing to an alarming loss of biological diversity. In line with efficient and distributionally equitable.
the Convention on Biological Diversity (CBD), the 2030 Agenda for
Sustainable Development places strong emphasis on biodiversity Given on-going and projected trends in biodiversity loss and
for achieving global goals for people and planet. 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 mainstreaming of
biodiversity across sectors of the economy.
© OECD 2023
OECD WORK ON Green Growth 70
OECD work on biodiversity also supports the UN Convention on OECD work also focuses on tracking economic instruments and the
Biological Diversity, and has provided analysis relevant to the post- finance they mobilise for biodiversity. These policy instruments
2020 Global Biodiversity Framework and CBD COP15 in December include biodiversity-relevant taxes, fees and charges, positive
2022. Work on The Post-2020 biodiversity framework: targets, subsidies and tradable permits. This work serves to monitor
indicators and measurability implications at global and progress towards the implementation of the OECD Council
national level, put forward the concept of headline indicators, as Recommendation on the Use of Economic Instruments to
a means to ensure more consistent and comparable monitoring of Promote Biodiversity Conservation and Sustainable Use.
progress towards individual targets across countries. The data was used to monitor progress towards Aichi Target 3 on
incentives and Target 20 on resource mobilisation under the previous
The OECD released Biodiversity: Finance and the Economic 2011-2020 Strategic Plan for Biodiversity under the CBD, and will
and Business Case for Action, which was launched at the G7 be relevant to the Post-2020 Global Biodiversity Framework. Latest
Environment Ministers’ Meeting in Metz, France in May 2019. trends are provided in Tracking Economic Instruments and Finance
A follow on report on A Comprehensive Overview of Global for Biodiversity – 2021, which also covers new data on payments
Biodiversity Finance, covering public, private, domestic and for ecosystem services and biodiversity offsets.
international finance flows to protect biodiversity, was released in
2020. Work has also focused on incentives harmful to biodiversity. A new
report, Identifying and assessing incentives, including subsidies,
More recently, the OECD released in 2021 a report on Biodiversity, harmful to biodiversity at national level: A comparative review
Natural Capital and the Economy: A Policy Guide for Finance, of existing national level assessments and insights for good
Economic and Environment Ministers, which was prepared at practice, was released in 2022.
the request of the UK G7 Presidency. The report provides the
latest findings and policy guidance for G7 and other countries to
underpin transformative domestic action to address biodiversity
loss in four key areas: measuring and mainstreaming biodiversity;
aligning budgetary and fiscal policy with biodiversity; embedding
biodiversity in the financial sector; and improving biodiversity
outcomes linked to international trade.
© OECD 2023
71
Sub-national governments have a key role in addressing biodiversity On-going work on biodiversity is focusing on mainstreaming
loss. Drawing on policy practices from Scotland (UK), France and biodiversity in renewable energy infrastructure, and biodiversity in
other signatories to the Edinburgh Declaration, Enhancing the green budget tagging.
effectiveness of sub-national biodiversity policy - Practices
in France and Scotland, United Kingdom examines governance
and institutional issues as well as the policy instruments that Number of countries with biodiversity-relevant
subnational governments can leverage to deliver positive economic instruments
biodiversity outcomes. 70
60
Number of countries
Biodiversity loss and climate change are closely linked. Climate 50
30
degradation and loss of ecosystems can result in significant
20
greenhouse gas emissions. At the same time, biodiversity and
10
ecosystem services play an important role in helping people
0
adapt to the impacts of climate change, and reducing the risk 1980 1985 1990 1995 2000 2005 2010 2015 2020
of climate-related disasters. Towards Sustainable Land Use: Taxes Fees and Charges Tradable Permits Environmentally-mo�vated subsidies
Aligning Biodiversity, Climate and Food Policies examines Source: OECD PINE database, accessed 28 July 2021
on-going challenges for aligning land-use policy with climate, https://www.oecd.org/environment/indicators-modelling-outlooks/policy-instrument-database/
© OECD 2023
OECD WORK ON Green Growth 72
Katia Karousakis
Environment Directorate
E-mail: Katia.Karousakis@oecd.org
© OECD 2023
73
Managing water for green growth Recognising that water crises are often primarily governance
crises, the OECD Water Governance Initiative was set up as an
international multi-stakeholder network where delegates from
The UN 2030 Sustainable Development Agenda recognises public, private and non- profit sectors share good water governance
the critical contribution of water to sustainable development. practices. It has led to the development of the OECD Principles on
However, investment in waster security falls short of global needs Water Governance in 2015, the OECD Water Governance Indicators
and the impacts on communities, economies and the environment in 2018 and the “How To Assess water Governance” guide in 2022.
are significant. The OECD Policy Perspectives on Water, Growth
and Finance explains that this does not result from a shortage of The OECD supports ambitious water policy reforms in selected
finance, but from inadequate risk-return profiles of infrastructure countries, on demand. These combine robust analyses of water
projects in the water sector. economics and governance with insights from international
practitioners, in the framework of national policy dialogues on
In 2017, the OECD established the Roundtable on Financing water. Over the past decade, Water Policy Dialogues have been
Water to facilitate dialogues between the water and finance undertaken in Mexico, the Netherlands, Brazil, Korea, Argentina,
communities on how to overcome the global challenges of financing Peru. They have helped to inform the water policy reform agenda.
investments that contribute to water security and sustainable
growth. Specifically, the Roundtable: i) tracks water- related The OECD also provides support to the transition economies
financing needs and capacities in different regions of the world; ii) of Eastern Europe, the Caucasus and Central Asia to improve
develops policy recommendations to mobilise private finance (e.g. their environmental and water policies, integrate environmental
through blending development finance with domestic commercial considerations into the processes of economic, social and
finance); and iii) analyses how to ensure that available finance goes political reform and gradually shift to a green growth and
to projects which are not merely bankable but deliver tangible sustainable development model. As a key implementing partner
benefits in terms of water security and sustainable development. of the European Union for Environment Water Resources and
The Roundtable embarked on a series of regional meetings Environmental Data Programme (EU4Environment – Water
(covering North and Latin America and Asia in 2019, other regions and Data), OECD work on policy reforms in this region are aimed
in 2020) for more tailored discussions on issues and opportunities. at the economic and financial dimensions of sustainable water
resources management, the reform of water supply and sanitation
systems, and enhanced transboundary co-operation in water
basins.
© OECD 2023
OECD WORK ON Green Growth 74
Xavier Leflaive
Environment Directorate
E-mail: Xavier.Leflaive@oecd.org
Matthew Griffiths
Environment Directorate
E-mail: Matthew.Griffiths@oecd.org
Oriana Romano
Centre for Entrepreneurship, SMEs, Regions and Cities
E-mail: Oriana.Romano@oecd.org
© OECD 2023
75
More than half the people in the world live in or near cities today. The 2021 Regional Outlook - Addressing COVID-19 and Moving
By the middle of the century, urban areas will be home to over to Net Zero Greenhouse Gas Emissions analyses the different
two-thirds of the global population and a large share of economic territorial impacts of COVID-19 on health and economy and the
activity. The OECD work on urban and regional development finds different territorial implications of moving to net-zero greenhouse
that appropriate local policies can help generate growth and jobs gas emissions by 2050 whilst adapting to climate change. Building
while becoming greener. on these insights, it provides guidance for integrating the climate
challenge into multi-level governance, urban and rural development
so as to leave no region behind. The report also highlights the
opportunity to draw lessons from COVID-19 for a place-based
response to the climate challenge.
© OECD 2023
OECD WORK ON Green Growth 76
The OECD Programme on the Circular Economy in Cities and The Building decarbonisation in cities and regions project
Regions supports national, regional and local governments in their focuses on the role of the building sectors for meeting net-zero
transition towards a circular economy by: supporting multi-level targets. The project started in 2021 with a multi-level governance
dialogues; providing an international network, where regions and framework to guide building policies, including energy efficient
cities can share knowledge, experiences and good practices with a retrofits, installing high performance equipment and promoting
wide range of stakeholders; and facilitating the uptake of the OECD renewable energy. Besides saving energy and reducing CO2
Scoreboard on the Governance of the Circular Economy. emissions, decarbonising buildings also brings multiple benefits
such as reducing energy bills, improving health and creating green
The OECD Programme A territorial approach to climate action jobs. Using the framework as a foundation, the project provides
and resilience supports countries, regions and cities in their efforts more specific place-based analysis taking into account regional
to develop and implement their climate plans, strategies and policy differences.
instruments. The programme seeks to demonstrate the potential of
subnational action by strengthening local understanding of climate
change drivers, impact and vulnerabilities; assessing national and
subnational policy and governance frameworks to provide locally-
tailored recommendations; sharing and disseminating innovative
policies, strategies and programmes applying a territorial approach
to drive the zero-carbon transition and climate resilience.
© OECD 2023
77
Mining Regions and cities play a key role in the green inclusive In the broader context of the 2030 Agenda for Sustainable
transition. The OECD Mining Cities and Regions initiative aims Development, the OECD Programme on a Territorial Approach
to develop recommendations for improving regional development to the SDGs seeks to support cities and regions in localising the
outcomes for regions and cities specialised in mining and extractive SDGs, with the participation of 10 pilot cities and regions from
industries by developing a global platform for mining regions and around the world. Recent projects of the framework include
cities through events and peer-review that enable knowledge the Rhine-Neckar Metropolitan Region (2021-2022) and the
sharing, advocacy and dialogue between public/private sectors Autonomous Province of Bolzano (2022).
and local communities on better policies to enhance regional
productivity and wellbeing.
Tadashi Matsumoto
Centre for Entrepreneurship, SMEs, Regions and Cities Oriana Romano
E-mail: Tadashi.Matsumoto@oecd.org Centre for Entrepreneurship, SMEs, Regions and Cities
E-mail: Oriana.Romano@oecd.org
Andrés Fuentes Hutfilter
Centre for Entrepreneurship, SMEs, Regions and Cities
E-mail: Andres.Fuentes@oecd.org
© OECD 2023
OECD WORK ON Green Growth 78
Asia China, Japan and Korea – like many other countries that underwent
periods of rapid industrialisation – share a common story of high
economic growth and intense pollution followed by progressive
The current development of Asia is characterised by a rapid efforts to improve air quality. The critical impact of air pollution
urbanisation, rising economic growth led in most places by the on human health in both developed and developing countries is
manufacturing industry, and a rapidly increasing motorisation. The well-known. Building on the expertise of the OECD Environment
result has been escalating air and water pollution, large greenhouse Policy Committee and the Regulatory Policy Committee, the OECD
gas emissions, increased solid waste generation and plastic brought together policy makers, academics and experts from China,
pollution, sprawling urban development, depletion of natural Japan and Korea to discuss regulatory frameworks, enforcement
resources and deforestation. and co-operation to address air pollution as well as existing
international regulatory co-operation to control trans-boundary air
The development of infrastructure supports Asia’s dynamism pollution in Northeast Asia, North America, and Europe. The report
but also plays a key role in soaring greenhouse gas emissions, air Economic benefits of international co-operation to improve air
pollution and the destruction of ecosystems. To help governments quality in Northeast Asia: A focus on Japan, Korea and China
across Central and Southeast Asia plan, evaluate and finance provides projections of the benefits of policy action up to 2050,
sustainable infrastructure projects in line with long-term and finds that further co-operation to reduce air pollution in the
environmental and development goals, the OECD launched the Northeast Asia region can result in health, environmental and
Sustainable Infrastructure Programme in Asia (SIPA) in 2021. economic benefits.
SIPA provides countries with capacity development and policy
advice at different stages of the infrastructure investment cycle, The OECD also engages with Southeast Asian economies to
focusing on long-term strategic planning, project-level evaluations, support them in the promotion of a sustainable ocean economy
aligning national sectoral policy frameworks (energy, transport, and to address policy challenges related to marine plastic pollution
industry) with the goals of the Paris Agreement and the SDGs as by providing policy guidance and sharing best practices. The ten
well as promoting the adoption of green finance and responsible recently published ASEAN Country Notes map the government
business conduct principles. ministries and departments responsible for managing marine
plastic pollution, the government policies, measures and selected
initiatives to combat marine plastic pollution in those countries.
© OECD 2023
79
The OECD is currently developing a regional scale-down of its Key Publications and website
Global Plastics Outlook report that will be specific to the region. • Southeast Asia Plastics Outlook (forthcoming 2023).
• Economic Outlook for Southeast Asia, China and India 2022:
A sound investment and finance policy framework is a key enabler Financing Sustainable Recovery from COVID-19 (2022)
for the green transition. The 2022 Economic Outlook for Southeast • The economic benefits of international co-operation to improve
Asia, China and India highlights the existing challenges, and policy air quality in Northeast Asia: A focus on Japan, Korea and China
options to support the further development of sovereign green (2022)
bond markets in the region. In addition, the report Strengthening • Environmentally Adjusted Multifactor Productivity in China (2022)
Macroprudential Policies in Emerging Asia: Adapting to Green • Strengthening Macroprudential Policies in Emerging Asia:
Goals and Fintech provides a detailed overview of the current Adapting to Green Goals and Fintech (2021)
macroprudential policy situation in Emerging Asian countries and • Clean Energy Finance and Investment Policy Review of Indonesia
explores how the macroprudential policy toolkit has evolved. In (2021)
particular, the report devotes special attention to macroprudential • Clean Energy Finance and Investment Roadmap of India:
policies for emerging priorities, such as achieving green goals Opportunities to Unlock Finance and Scale up Capital (2021)
and updating regulatory frameworks to reflect ongoing fintech • Enhancing Air Quality in Northeast Asia: Regulatory frameworks,
developments. Furthermore, several countries in the region have enforcement and co-operation (2019)
joined the Clean Energy Finance and Investment Mobilisation • Green Growth Performance Review of Indonesia (2019)
(CEFIM) programme, including India and Indonesia. • www.oecd.org/site/sipa/
• www.oecd.org/cefim/
OECD has worked with the Chinese experts on Environmentally Contact for more information
Adjusted Multifactor Productivity (EAMFP), applying the OECD
measurement framework to national data. The project led to the Virginie Marchal Elisa Lanzi
release of the report on Environmentally Adjusted Multifactor Environment Directorate Environment Directorate
Productivity in China in March 2022, which provides indicators E-mail: Virginie.Marchal@oecd.org E-mail: Elisa.Lanzi@oecd.org
to track the progress towards green growth, including metrics on
the reliance on natural capital and pollution-intensive activities to Eija Kiiskinen
Environment Directorate
generate income growth.
E-mail: Eija.Kiiskinen@oecd.org
© OECD 2023
OECD WORK ON Green Growth 80
Eastern Europe, the Caucasus and The last decade witnessed an accelerated awareness of, and
Central Asia (EECCA) more ambitious response to, local environmental impacts of the
traditional path of economic development and of global trade.
Many countries of EECCA have set and updated national targets
to guide their transition towards a green economy, including on
Since the collapse of the Soviet Union, the countries of Eastern green and sustainable energy, low-carbon economy, and natural
Europe, the Caucasus and Central Asia (Armenia, Azerbaijan, Belarus, resource management. EECCA countries have also significantly
Georgia, Kazakhstan, the Kyrgyz Republic, Moldova, Tajikistan, modernised environmental policies and legislation at both strategic
Turkmenistan, Ukraine and Uzbekistan) have been on long journeys and technical levels to make them less costly and complex while
to pursue economic development that is also environmentally not compromising achieving environmental and climate objectives.
sustainable. These developments have been accompanied by the creation
of inter-ministerial co-ordination mechanisms on greening the
economy.
© OECD 2023
81
Most recently, EECCA countries have integrated green stimulus The Task Force has also developed and provided EECCA countries
measures into their response to the COVID-19 pandemic and their with a range of practical tools that support policy decision making,
broader recovery packages. They also have embarked on aligning including for strengthening environmental performance of large
the policy objectives of the financial sector development with their enterprises and SMEs, measuring green growth by using indicators
national climate and environmental targets. and developing green public investment programmes.
Despite progress, the EECCA countries are still facing significant The GREEN Action Task Force work has been carried out in co-
environmental challenges, partly inherited from the Soviet Union operation with OECD member countries, International Financial
and partly newly acquired as a result of new consumption patterns. Institutions and international organisations, such as the UNECE,
They need significant investments and policy reforms to move UNEP and UNIDO.
onto a greener path of economic development.
Key Publications and websites
Since the 1990s, the OECD has supported the EECCA countries in • Green Economy Transition in Eastern Europe, the Caucasus and
developing policies that improve environmental quality and well- Central Asia: Progress and Ways Forward, OECD Green Growth
being, while creating opportunities for strong economic growth Studies
and decent jobs. The long-standing collaboration between the • Towards a Green Economy with EU4Environment in Armenia (2022)
countries of EECCA and the OECD, which has been carried out • Towards a Green Economy with EU4Environment in Azerbaijan (2022)
through the GREEN Action Task Force (previously known as • Towards a Green Economy with EU4Environment in Georgia (2022)
the EAP Task Force), has produced concrete country- and region- • Towards a Green Economy with EU4Environment in Moldova (2022)
specific results such as, for instance, new strategies for greening the • Towards a Green Economy with EU4Environment in Ukraine (2022)
economy, pragmatic reform of policies, regulations and developing • Towards green transformation of Ukraine: State of Play in 2021 (2022)
options for mobilising green finance. • Towards green transformation of the Republic of Moldova: State of Play
in 2021 (2022)
• The environmental compliance assurance system in the Republic of
Moldova: Current situation and recommendations (2022)
• The environmental compliance assurance system in Armenia: Current
situation and recommendations (2022)
© OECD 2023
OECD WORK ON Green Growth 82
© OECD 2023
83
© OECD 2023
OECD WORK ON Green Growth 84
Eija Kiiskinen
Environment Directorate
E-mail: Eija.Kiiskinen@oecd.org
© OECD 2023
85
Africa and MENA COP27 returned the annual meeting to Africa for the first time since
2016. The report, West Africa and the global climate agenda,
Commitment towards building climate resilience and achieving a analyses the 17 NDCs of West African countries (as of September
just energy transition is high in the African continent agenda. All 2022) to understand the region’s ambition, financing needs and
54 African countries signed the Paris Agreement and Agenda 2063, potential to implement their Nationally Determined Contributions
which is Africa’s “blueprint and masterplan for transforming the (NDCs). One of the key takeaways is that so far, mobilised finance
continent into the global powerhouse of the future”, addresses has fallen short of the specified needs in the region’s NDCs. West
topics such as climate change, green and blue growth. The OECD African NDCs state that USD 221.2 to 279.7 billion is needed for
is supporting the region in its green transition efforts through mitigation and USD 61.4 to 88.8 billion for adaptation by 2030. So
multiple actions. far, according to OECD estimates, the 17 West African countries
received less than USD 6 million in 2020 of the “100 billion”
Boosting African cities’ resilience to climate change: The role mobilised by developed countries, which is far from meeting the
of green spaces explores the dynamics between urbanisation and region’s needs.
green spaces and highlights that availability of green space can be
expanded by building vertically in increasingly compact African Pricing Greenhouse Gas Emissions: Turning climate targets into
cities. Moreover, the analysis reveals that the availability of green climate action examines carbon pricing policies in 71 countries,
spaces is not the same as proximity. Communities who live further including 12 countries from Africa (Burkina Faso, Côte d’Ivoire,
away from green spaces are less likely to reap their benefit, such as Egypt, Ethiopia, Ghana, Kenya, Madagascar, Morocco, Nigeria,
cooling effects during heat waves. Rwanda, South Africa, Uganda). The report finds that well-
designed energy, carbon tax and subsidy reform can strengthen
The data underpinning this report is freely available on OECD efforts to improve domestic revenue mobilisation. While the
platform Mapping Territorial Transformations in Africa revenue potential varies across countries, it is often substantial.
(MAPTA), which enables users to explore interactive maps on the
sustainability and resilience of African cities. This platform includes
several types of data related to urban forms, street networks, and
pollution to aid actors in decision-making.
© OECD 2023
OECD WORK ON Green Growth 86
Revenues from carbon pricing could be used to provide targeted An extensive consultation process is underway between the OECD
support to improve energy access and affordability, enhance social and African stakeholders to strengthen collaboration on several
safety nets, and support other economic and social priorities. For topics, including green growth. Ongoing discussions on the OECD-
example, in Egypt, where a successful fossil fuel subsidies reform Africa Partnership includes how to support the development
generated fiscal savings, the government was able to allocate of policy frameworks to promote green growth and sustainable
more funds to education and health and implement an economic development that is territorially balanced across Africa. In the
stimulus package to recover from the crisis. 2021 MENA-OECD Ministerial Declaration, Ministers announced
their commitment to design and implement a comprehensive
The upcoming Green Growth Policy Review of Egypt (GGPR) will programme of work, in order to promote a strong, resilient, green,
provide an independent, evidence-based and country-tailored and inclusive recovery in the MENA region.
assessment of Egypt’s environmental performance and green
growth policies with targeted recommendations designed to Key Publications and website
help the Egyptian government evaluate progress and identify • West Africa and the global climate agenda, West African Papers
options to achieve its green growth objectives. An in-depth (2022)
chapter will be dedicated to the theme of “Building climate- • Boosting African cities’ resilience to climate change: The role of
smart, resilient and inclusive cities”. The Clean Energy Finance green spaces West African Papers (2022)
and Investment Mobilisation (CEFIM) programme supports the • Towards an OECD Africa partnership (2022)
country in unlocking finance and investment flows to achieve clean • Pricing Greenhouse Gas Emissions: Turning Climate Targets into
energy targets and sustainable finance goals through extensive Climate Action (2022)
stakeholder, implementation-support activities, regional peer- • www.mapping-africa-transformations.org/
learning and investor dialogues. • www.oecd.org/mena/
Brilé Anderson
Sahel and West Africa Club
E-mail: Brile.Anderson@oecd.org
Fianna Jurdant
Global Relation Directorate
E-mail: Fianna.Jurdant@oecd.org © OECD 2023
87
Since its establishment in 2012, the GGKP has since expanded to include a large,
diverse group of more than 75 Knowledge Partners. It is a network of international
organisations and experts that addresses major knowledge gaps in green growth
theory and practice. The OECD is a founding partner of the GGKP, together with the
Global Green Growth Institute, the UN Environment, the United Nations Industrial
Development, and the World Bank.
The GGKP hosts three state-of-the-art web platforms, providing easy access to policy
guidance, good practices, tools and data through a searchable e-library with technical
and policy resources as well as data for some 193 countries. Moreover, through its
online interactive Community, Annual Conferences and webinars, the GGKP harnesses
in-person and virtual networks to foster information sharing and learning through the
creation of a vibrant green growth community of practice.
© OECD 2023
OECD WORK ON Green Growth 88
The Green Growth and Global Relations Division produces titles in English and French, with selected titles translated
into other languages.
S
ign up to our Newsletter: O
rder our publications:
Be the first to know about the latest OECD news Browse titles on your screen before you buy:
and publications on green growth: www.oecdbookshop.org
www.oecd.org/oecddirect
1. Register/sign up via “MyOECD”
2. Select “Green Growth and Sustainable Development”
3. Choose “Green Growth Newsletter”
F
ollow and engage with us via Twitter:
@OECD_ENV Subscribe to our OECDiLibrary and statistics services:
www.oecdilibrary.org
V
isit our website:
www.oecd.org/greengrowth
D
iscuss with OECD experts at our Green
Talks: LIVE webinars:
www.oecd.org/environment/green-talks-live.htm
© OECD 2023
OECD work on Green Growth
www.oecd.org/greengrowth