Carbon Pricing: Does the OECD practice what it preaches?

WED2015Liisa-Maija Harju, Environmental Coordinator in the OECD Operations Service on the OECD’s environmental performance, for World Environment Day 2015

Today, more than 22% of global emissions are covered by a carbon price. Almost 40 countries and over 20 cities, states and provinces use carbon pricing mechanisms or are planning to implement them.

These are great figures. The OECD recommends that countries make carbon pricing the cornerstone of climate policy. Price signals sent to consumers, producers and investors alike need to be consistent and facilitate the gradual phase-out of fossil fuel emissions.

It is not just countries but also companies who are interested in this policy tool. A 2014 study shows that nearly 500 companies globally report that they are regulated through global carbon markets. What is not so well known is that at least 150 major companies already use their own, internal price on carbon to manage their greenhouse gas (GHG) emissions.

Some knowledge institutions are riding the trend as well. A Yale University task force concluded that it would be feasible and effective for Yale to institute an internal, revenue-neutral carbon pricing mechanism as part of the university’s sustainability efforts.

The charge at Yale will be set at the social cost of emissions, currently estimated by the US federal government to be $40 per tonne of carbon equivalent (tCO2e). The task force recommended that all facilities operated by the university should be included in the footprint for the carbon charge. Additionally, the carbon charge should be used as a shadow price in planning for major capital investments.

The OECD has been piloting a similar tool. In 2013, the OECD Secretary-General introduced an internal OECD carbon price to address the growth in air travel-related GHG emissions and to encourage management and staff to give greater consideration to environmental aspects in making their travel decisions and arrangements

75% of the OECD GHG emissions from operations relate to official air travel. This volume reflects the missions considered necessary to implement the Organisation’s Programme of Work, as well as the location of events which the Organisation manages or in which its officials participate.

In its initial two-year trial period, 2013-2014, the carbon price was set at 20 euros per tCO2e and was calculated on the basis of the GHG emissions generated by air travel by OECD Directorates and Programmes in the previous year.

The funds collected are invested annually in projects that improve the environmental footprint of the Organisation.

In 2013 the funds were allocated to improving the Organisation’s remote conferencing facilities. In 2014 they were directed to, for example, raising employee awareness about energy consumption, developing employee engagement materials related to energy and paper consumption and the initiation of rainwater harvesting in the Organisation’s premises.

The initiative has been continued into 2015-16. Among changes to the initial scheme, the price has been increased to 25 euros in 2015, and will increase again in 2016 to 30 euros.

The most important objective in the OECD’s GHG management strategy, as is the case for countries and companies, is to reduce emissions in the first place. Indeed, we continue to reduce our operations’ carbon intensity overall: since 2010, per capita emissions have decreased by 0.7 tCO2e/employee (16%) and emissions from buildings have fallen by 21 kgCO2e/m2 (65%). Total GHG emissions (facilities, air travel, employees commuting) in 2014 amounted to 9100 tCO2e, 6% less than in 2010.

We have been able to demonstrate for several years that the accomplishments of our environmental responsibility strategy, [email protected], are consistent with the pursuit of more effective and efficient resource use at the OECD. They enable value for money.

To read more about the overall environmental footprint of the OECD Secretariat’s operations, including the GHG emissions, click on the infographic.


Useful links

Explore this website to understand OECD’s work on effective carbon pricing.

OECD work on the environment

The Global Forum on Responsible Business Conduct 18-19 June 2015 is held at the OECD to strengthen international dialogue on responsible business conduct (RBC).


Waste management: Does the OECD practice what it preaches?

You don’t want to know what they do with the bottles

Today’s post is from Liisa-Maija Harju, Environmental Coordinator in the OECD Operations Service

Each year OECD countries generate over four billion tonnes of waste. By 2020, we could be generating 45% more waste than we did in 1995.

OECD’s work on waste management focuses on promoting sustainable materials management in order to limit waste generation in the first place. According to the recent report Greenhouse gas emissions and the potential for mitigation from materials management within OECD countries, in most OECD countries, at least 4 percent of current annual GHG emissions could be mitigated if waste management practices were improved. The report focuses on municipal solid waste that forms only a portion of total waste generation across OECD countries.

Typically GHG emissions from the waste sector have accounted for 3% to 4% of total emissions in OECD member countries’ GHG emission inventories. This approach might be outdated because it only considers direct emissions primarily from landfill methane emissions and incinerators.

A systems view would be needed to assess GHG emissions associated with materials and waste because materials production, consumption and end-of-life management are so closely linked together. Looking at the whole life cycle would allow for the inclusion of GHG emissions from the acquisition, production, consumption, and end-of-life treatment of physical goods in the economy.

When viewed from a life-cycle perspective, GHG emissions arising from materials management activities are estimated to account for 55% to 65% of national emissions for four OECD member countries studied. This suggests that there is a significant opportunity to potentially reduce emissions through modification and expansion of materials management policies. The report also reminds us that basic recycling and source reduction are effective tools to reduce total GHG emissions.

How about us here at the OECD itself? The OECD Secretariat’s total  GHG footprint amounted to approximately 9332 metric tonnes CO2-equivalent in 2010. Our GHG Inventory tool does not include waste management directly, and we don’t yet have the means to calculate the real GHG emissions savings of our waste management efforts.

Since 2008 we have sorted paper, and in the past four years the total amount of waste produced has gone down by 45%, although the baseline was exceptionally high because we moved offices over 2007-2009 when our headquarters buildings were being refurbished and the new conference centre built. In 2011 the Secretariat produced 477 tonnes of waste (of which 274 tonnes was paper waste) compared to 861 tonnes of waste in 2008 (of which 363 tonnes was paper waste). Last year we installed a machine that allows for the compression of bottle, can, cardboard, and paper waste at our facilities before transportation, cutting down the number of truck trips needed to take away the waste.

To further improve our waste management infrastructure, we will install a comprehensive sorting system for bottles and cans this June. Hopefully we will be able to switch our focus to sustainable materials management and the prevention of all the waste in the first place so that by 2020 we will be generating at least 45% less waste than we did in 2011.

Useful links

OECD work on greenhouse gas mitigation and materials management

OECD work on sustainable materials management

OECD work on material flow analysis