Noe van Hulst, Ambassador of the Netherlands to the OECD
With the world welcoming the new comprehensive global climate agreement at COP21 aiming to limit the global average temperature rise to well below 2 degrees Celsius, it is worth noting the significant contribution that the OECD family has made. These contributions were aptly summarized in a useful joint statement by the secretariats of OECD, IEA, International Transport Forum and Nuclear Energy Agency right after COP21 kicked off. Let me highlight a few key points.
In their report Aligning Policies for a Low Carbon Economy, already discussed at the OECD Ministerial Meeting in June 2015 under Dutch presidency, the organisations called on governments to fix the policy misalignments across the economy that make the energy transition more costly than needed. A startling example of this are the fossil fuel subsidies that still amount to nearly $500 billion per year on a global level. At the IEA Ministerial Meeting in November 2015, Ministers called for the gradual phasing out of inefficient fossil fuel subsidies to end-users. This should probably be done by 2030.
In addition, IEA Ministers agreed on the need for stronger policy efforts aimed at achieving a peak in emissions already around 2020 by increasing energy efficiency and investment in renewable energy, phasing out the least efficient coal plants, and reducing methane emissions from oil and gas. The IEA has documented in detail how this could be done in a pragmatic manner.
Another important point that IEA and OECD have both been stressing repeatedly is the need to accelerate technology innovation. The IEA estimates that we need no less than a tripling of public energy investment in RD&D (research, development and demonstration) and a scaling up of collaboration between public and private entities in developed and developing countries alike. Public RD&D is obviously another area where we haven’t got it right yet and where misalignment of policies needs to be fixed.
A key area of OECD work has been on analyzing the commitments of developed countries to mobilise the $100 billion a year by 2020 for climate finance actions by developing countries, both in mitigation and in adaptation. Adaptation and increasing resilience is crucial to protect the most vulnerable (e.g. small island states) and also for the energy sector infrastructure itself. The calculations on how far we have come with mobilising climate finance for developing countries were the subject of intense debates during COP21. It is now clear, however, that even more than $100 billion is probably needed after 2020 on a yearly basis, with climate adaptation getting a bigger slice of the pie. Last but not least, the joint organisations have argued that a transparent mechanism is needed for assessing, strengthening and rolling forward mitigation contributions on a regular five-yearly basis. A clear example of a recommendation that is remarkably similar to the relevant text of the Paris Agreement in this respect.
Now that COP21 has successfully been concluded under the very able French presidency, we can surely identify more areas where OECD and IEA have made significant contributions to the final result. More importantly, it is more than likely that OECD and IEA will be called upon frequently going forward, given the immense task of implementing the ambitious climate agreement in the most efficient and cost-effective way.