Today’s post is by Naazia Ebrahim of the OECD Environment Directorate
Please join me in an ode to the giant tortoise, recently confirmed to be back from near extinction on the Galapagos Espanola Island after conservation work that began forty years ago. The population currently stands at over 1000, a spectacular recovery considering that only 15 remained in the late 1960s, when they were summarily rounded up and placed into a breeding program. There are now enough adults and juveniles surviving and repopulating to be self-sustaining.
Although one can never say ‘giant tortoise’ enough times, the island still requires some habitat restoration. The tortoises should be able to help that along, because in addition to being long-lived, they are also superb ecosystem engineers. They disperse seeds and other organisms, stimulate recruitment of cactus trees (one of their primary food sources) by distributing pods as they eat, and also, under the right conditions, control woody plant growth, which helps maintain habitat for an endangered albatross that also nests on the island. One could almost call them “masters of the (island) house”. Whoever thought this waddly wild wonk would be a model for humans to improve environment through adept household behaviour?
If society is Espanola Island – in need of some major restructuring to achieve ecological health – then the tortoises are the epitome of small, incremental change-makers that eventually create a paradigm shift. Their localised, small-scale influences – grazing on cacti and spreading seeds in their home range – eventually combine to shift the entire ecosystem towards its natural equilibrium.
But the tortoises could not, and cannot, do it all on their own. Sound like a familiar cry? The population decline was not simply due to natural causes: feral goats introduced in the late 1800s chewed their way through the island’s vegetation, destroying the cacti and causing an explosion of woody plants, which further inhibited cactus regrowth – a disastrous combination for the tortoises. (This is of course a prime example of the dangers of invasive species. The next time border control stops you in case there are fruit flies in your cut mango, don’t complain!) The breeding program thus had to be paired with a concerted goat eradication effort, which itself took around 20 years. Even with population viability, a good deal more effort needs to be put into removing woody plants before the tortoises can be fully effective as ecosystem engineers.
So, although the tortoises are powerfully influential in the aggregate, even they need a helping hand – or in other words, when the system has been flipped into a state unconducive to change, small-scale efforts can only take you so far. As found in a recent OECD study, greener household behaviour can combine to create major reductions in waste, as well as water and energy use. These actions may even form the vanguard of a wider societal transition, but these incremental moves are sometimes overpowered by larger structural failings. Moreover, evidence suggests that even when individuals are open to pro-environmental actions, including lifestyle sacrifices, they may not follow through due to societal pressures or perceived time, effort, and cost constraints – but they may accept political changes that will externally drive this behaviour.
Thus, for issues requiring large-scale reorganisation such as the energy or food supply systems, it is essential to create an enabling environment for society’s members to achieve their full potential. Taking a cue from Espanola Island, policy-makers may do well to foster top-down change, or barring that, to eradicate some of the “goats”. (No goats were harmed in the writing of this piece. The author would also like to clarify that she loves goats.)
OECD Environment Directorate on iSSUU, including Policy Highlights on water, food, transport, waste and energy
Can you have your green cake and eat it too? Environmental policies as an ingredient for economic growth
Today’s post is by Maroussia Klep of the OECD Environment Directorate
In today’s hard times, policy-makers can find it difficult to sell their environmental policies. To many, these policies represent a burden on the economy. They might secure the well-being of our grandchildren, sceptics argue, but risk preventing the growth we badly need today.
In this context, recent OECD findings provide renewed optimism. As revealed by thorough economic assessments, well-designed green policies not only secure long-term wellbeing, but can uphold current productivity levels too. In other words, it is possible to increase the economic pie and make it greener at the same time.
As ecological concerns gained momentum in the last decades, many studies have attempted to identify the impacts of environmental policies on the economy, with varying conclusions. In the United States for instance, scholars tried to relate the economic slowdown in the 1970s to the introduction of such policies; but their results were largely inconclusive. On the opposite side, economist Michael Porter suggested in a 1991 article that stringent policies could actually increase competitiveness: “strict environmental regulations do not inevitably hinder competitive advantage against rivals”, says Porter, “indeed, they often enhance it.”
In a report published this month, OECD splits the difference. The in-depth empirical analysis across OECD countries in the last twenty years revealed that well-designed green policies can sustain current levels of productivity growth.
When new policies are put in place, the more productive and technologically advanced firms are usually those able to reap the most benefits. They have indeed the firepower to seize market opportunities and rapidly adopt new technologies. Besides, once technological improvements are realized in an industry, the positive economic effects will often spread out across industries and countries via integrated production chains. According to OECD, these positive outcomes can be further encouraged if environmental policies offer flexibility for compliance, a reason to favour market-based instruments (such as taxes) over rigid regulations and standards.
In parallel, the less productive and technologically advanced firms may require more investment in order to comply with regulations, and may even have to drop out of the market if they are unable to adapt to changing conditions. In a competitive market, such entry and exit should lead to a swift reallocation of capital and sustain overall industry productivity.
It is therefore essential for policy-makers to support market competition. In particular, the design of environmental policies should as far as possible guarantee a level-playing field among competitors.
This brings us back to our recipe: which are the key ingredients for a “growing green cake”?
First and foremost, OECD argues, legislators shall ensure that the burdens imposed on competition by new policies are minimised and do not inhibit the entry of new and potentially cleaner firms and technologies. As highlighted in the report, countries such as Canada, New Zealand and Israel could further reduce the high administrative costs imposed on new entrants and facilitate access to environmental licences. In the same vein, instruments that favour incumbents, such as subsidies based on past performance, may put young firms at a disadvantage and impede market entry.
But the report also provides encouraging examples. In many countries, green policies and economic wellbeing go already hand in hand. The Netherlands, Switzerland and Austria, for instance, have implemented relatively stringent environmental policies that remain competition-friendly. For this, they have set measures to facilitate market access for new entrants, minimize red-tape and provide fair and equal conditions to all market players. These successful case studies can inspire policy-makers in OECD countries and beyond when designing green policies or revising existing ones.
Of course, the priority of environmental policies is to secure long-term sustainability. However, if the right conditions are put in place, greening the economy while upholding today’s growth trends could become a piece of cake.
The Porter Hypothesis at 20: Can Environmental Regulation Enhance Innovation and Competitiveness? by Ambec et al. in the Review of Environmental Economics and Policy
Today’s post is by Mi Ah Schoyen of NOVA Norwegian Social Research and Bjorn Hvinden Professor and Head of Research at NOVA and the University of Tromso, and director of the Nordic Centre of Excellence ‘Reassessing the Nordic Welfare Model’ (REASSESS). It is published in collaboration with Bertelsmann Stiftung’s Sustainable Governance Indicators (SGI) Network
When it comes to balancing the needs of current and future generations, the Nordic welfare states have done fairly well: reforms of the pension system, low child poverty levels and public debt, and work-friendly family policies. Yet, environmental considerations remain neglected – in the Nordic countries and elsewhere in the OECD.
Few would disagree that intergenerational justice is a goal that all governments and societies should adhere to. Beyond this general consensus, the issue undoubtedly raises a number of dilemmas, which are notoriously hard to solve. The Nordic societies are far from immune to these challenges. However, there are a number of indications that this region has developed public policies which are more balanced with respect to both age and generation than in most other OECD countries.
In advanced democracies, intergenerational justice is only one of the objectives public policies are expected to meet. There are also aims such as intra-generational solidarity and fairness, gender equity, and the creation of a competitive economy combined with macroeconomic soundness. For intergenerational justice to be achieved, a simple theory suggests that successive generations (birth cohorts) – also future ones – should be treated the same. “Makes good sense!” you may think. So why are issues of intergenerational justice so hard to resolve?
First, it is difficult to account for the unborn and consequently controversy surrounds the debates about what we need to do today to achieve justice for the future. Second, the concept of intergenerational justice is typically applied in an ambiguous manner. It sometimes refers to age groups; at other times, the point of reference is to the treatment and position of successive generations or cohorts. This blurs the important distinction between age groups and generations. While you pass from one age group to another as you move through the life course, you remain part of the same generation (or birth cohort) from the day you are born until you die. Therefore, differential treatment of age groups does not necessarily violate principles of intergenerational justice. Think, for instance, of a contributory old-age pension system which by design transfers money from the working age population to the elderly. As long as current workers receive a similar level of transfers when they reach retirement, this kind of redistribution will be neutral with respect to generations. In fact, this mechanism is sometimes referred to as an implicit intergenerational contract and has until now been the most common way of organising public old age pensions.
Finally, matters are further complicated if successive cohorts differ in size. Unfortunately, this represents the rule rather than the exception. The current situation in most of the OECD world is that larger generations are followed by smaller ones, creating problems especially for old age social protection systems, which were created under the assumption of steadily growing populations. With modest fertility rates and steadily increasing life expectancy, the tax base does not grow fast enough to continue to finance public pensions in the way that was done in the past. This is the basic reason why we have seen large pension reforms in a number of OECD countries.
Pension reform has been an important policy issue also for Nordic governments. Sweden (in 1999) and Norway (in 2011) implemented comprehensive reforms of their old age pension systems. However, setting public pensions on a financially sustainable path is only part of the story of how Nordic societies seem to balance the distribution between generations and across age in a sensible way.
As the findings of the SGI Study on Intergenerational Justice in Aging Societies show, from a comparative perspective, children in the Nordic countries are doing well. Child poverty levels are relatively low and government debt is well below the OECD average (which was equal to just over 50 per cent of GDP in 2010). Note also that in the peculiar case of Norway, government debt indicators – also as they are represented in the SGI Study – are less meaningful. The country has built up a massive public fund from petroleum revenues with a market value currently approaching €600 billion!
Moreover, work-friendly family policies (including an emphasis on providing affordable care services for dependent children and elderly) have long been a priority in the Nordic countries. As a result, even though they – with the exception of Iceland – do not quite reach the replacement fertility rate of 2.1, generally, more babies are born in the Nordic countries than further south on the European continent. At the same time, female employment is high, providing a broad tax base that helps in meeting the costs of population ageing.
The Intergenerational Justice Index (IJI) includes environmental, social, economic and fiscal dimensions, as well as a measure of pro-elderly bias. Estonia ranks highest of the 29 OECD countries included in the study, the US is bottom.
Overall, while not seeing it as a super model – like the Economist actually did earlier this year – it seems fair to say that the Nordic social and economic model has managed to strike a sound balance between intra-generational and inter-generational concerns. This has been achieved by combining policies which contribute to the equalisation of life chances (e.g., free access to education, active labour market measures for the whole adult population, and a comprehensive system of social protection) with policies to foster economic competitiveness and efficiency.
The most innovative feature of the SGI Study is the inclusion of an environmental impact indicator in the assessment of intergenerational justice across countries. While a common dimension in discussions of environmental policy and sustainable development, ecological concerns rarely enter assessments of the welfare state and social justice more broadly.
The environmental impact of human activities reported in the SGI Study on the basis of countries’ Ecological Footprint, gives a rather mixed result for the Nordic countries. We get an intergenerational picture which is less positive than when considering only the welfare state more narrowly. It is important to note that several kinds of indicators have been defined for measuring different aspects of environmental performance. Country rankings are sensitive to the choice of indicator. For instance, if we instead rank countries according to the Environmental Performance Index, the Nordic countries all appear in the top quintile. We are not in a position to judge which indicator is superior, since that probably depends on your specific purpose. However, we strongly encourage further debates and research on the linkages between social and environmental policy and their outcomes. In this regard the SGI Study offers a welcome contribution.
Paying for the Past, Providing For the Future: Intergenerational Solidarity OECD Ministerial Meeting on Social Policy, May 2011
Do you suffer from Lord Henry Wotton syndrome? He’s the chap in Oscar Wilde’s Picture of Dorian Gray who said “To get back my youth I would do anything in the world, except take exercise, get up early, or be respectable”. It’s an attitude we all have to something or other we feel is desirable, but not to the point of making much of an effort. Saving the environment falls into that category for many people, but the good news for the planet is that the OECD has identified a group of people who “believe that sacrifices will be necessary to solve environmental problems”.
These “environmentally motivated” citizens form one of three groups identified in Greening Household Behaviour, based on the Environmental Policy and Individual Behaviour Change (EPIC) survey carried out in 2011 in 12,000 households in 11 OECD countries. The other two groups are the “environmental sceptics” who believe that environmental problems are exaggerated; and the “technological optimists” who believe that the problems are real, but that technological innovations are key to solving them.
You could divide the respondents in various other ways too, by age for example. In six of the eleven countries, older respondents were more likely to agree that their own generation bore significant responsibility for solving environmental problems, and that these problems should not be simply left for future generations.
Since the report is based on a survey, it’s interesting to try to spot differences between what people say they are prepared to do, and what they actually do (and what you do you yourself). Around 60% of respondents for example said they’d be willing to pay more for electricity generated from renewable sources for instance. One that intrigued me was the 45% of people who claimed they always washed clothes in cold water. Everybody I know is part of the 12% who answered “never” to that one, but I live in profligate Paris. How about you? Do you always, often, occasionally or never turn of equipment that has a stand-by function? Look at table 3.12 to see how you compare.
Apart from water and energy, the survey covers transport, waste generation, recycling, and food consumption, the theme of this year’s World Environment Day. The UN chose food to highlight the fact that while 1 in every 7 people in the world go to bed hungry and more than 20,000 children under the age of 5 will die today from hunger, 1.3 billion tonnes of food is wasted every year. This is equivalent to the same amount produced in the whole of sub-Saharan Africa.
We talked about this subject a few years ago on the blog, following the publication of a UK report that estimated that the average household threw away food and drink worth £40 ($65) per month, or around 15% of the shopping budget. Respondents to the Greening Household Behaviour survey report that approximately 10% of food is thrown away. There is a big difference from one country to another, ranging from 6% in France to 14% in Israel and 15% in Korea. Younger respondents report higher levels of food waste. Those concerned with natural resource depletion are less likely to throw food away.
They’re also more likely to buy organic, but here the cross-country differences are even more striking. Australians and Canadians aren’t really willing to pay much more for organic fruit and vegetables (a 5% price increase), while Koreans would accept a 23% hike. The reported willingness-to-pay for meat and poultry that takes animal welfare into account varies from 10% to 20%. Surprisingly (to me at least) the report says that “no significant pattern is found between income and expenditure […] for organic fruit and vegetables nor for meat and poultry labelled as taking animal welfare into account”.
Demand for electricity is another behaviour that doesn’t depend on income levels, but in this case the poor don’t have alternative choices. So without additional policy measures, they’re likely to suffer as a result of higher energy prices. Likewise, water conservation could be improved by according needs-based grants for water efficiency investments, or giving grants to tenants, who often don’t agree to pay to improve a home they don’t own.
How about this household? My colleague Liisa-Maija Harju has been looking at whether the OECD practices what it preaches regarding sustainable buildings, water use and waste management. To mark World Environment Day, OECD Secretary-General Angel Gurria has announced that the Organisation will be introducing a carbon pricing initiative based on an internal “carbon tax” on air travel of €20 per tonne to “reflect the cost of carbon emissions in OECD staff travel [and] encourage management and staff to give greater consideration to environmental aspects in making their travel decisions and arrangements”.
As Douglas Adams says in The Long Dark Tea-Time of the Soul: “It can hardly be a coincidence that no language on earth has ever produced the expression, ‘As pretty as an airport.”
Serge Tomasi of OECD’s Development Co-operation Directorate on Putting green growth at the heart of development
This post is from Serge Tomasi, Deputy Director of the OECD Development Co-operation Directorate
Over the past 20 years, the global development landscape has changed dramatically. At the same time, we face unprecedented global challenges and growing instability, with looming financial and economic crises, and growing unemployment, food insecurity, political instability and environmental threats.
In my view, the latter is probably the biggest of our challenges, as it is long term and will have a severe impact on developing countries for several reasons. Environmental degradation is already very costly in developing countries, where the share of national wealth that is embedded in natural assets is much higher than in developed economies. In these countries, already vulnerable groups of people, such as the rural poor, are highly dependant on natural resources. Without policy shifts to limit climate change and address other environmental risks, the pace of rising temperatures and growing water shortages will lead to alarming impacts concentrated in developing countries.
This includes food security problems in poor countries, where a dramatic increase in demand for food is expected by 2050 (by 50-70% in developing countries as a whole and by 100% in LICs). This combined with growing food price volatility could exacerbate already existing food security risks. Energy access and energy security are also pressing challenges for many countries, in particular in sub-Saharan Africa, where more than two-thirds of the population has no access to electricity today. Last but not least, demographic trends – such as rapid urbanisation – point to a need for dramatic increases in investment in new infrastructure. Without policy changes, infrastructure investments run the risk of being locked-in to outdated, polluting transportation and other systems, with large, negative impacts on human health and well-being in developing countries.
On the other hand, the success story of economic growth in a large set of developing countries – mainly in Asia and Latin America – is very impressive. We have learned from this experience that strong economic growth over the long term is critical is we want to dramatically reduce absolute poverty. But we have to learn also from the negative side of these experiences, including the challenges these emerging countries are now facing now with regard to environmental and sustainability.
Over the past few years, the OECD has been promoting a new growth model – a more sustainable and inclusive one. In 2011, an OECD ministerial meeting endorsed the OECD Green Growth Strategy, aiming to boost economic growth while preserving the natural assets on which our well being depends.
Today OECD has launched a new report – Putting Green Growth at the Heart of Development. It puts our expertise in green growth – and the experience of numerous developing countries – at the service of developing country policy makers who are committed to designing and implementing green growth strategies and policies. It recognises that economic growth is a key part of any national poverty reduction strategy, but also shows that environmental protection is a strategic asset in contributing to national wealth and the well-being of current and future generations. it poses the challenge of reconciling economic growth and environmental protection, and gives examples of how this can be effectively done. In short, it makes the case for promoting sustainable growth as a critical element of sustainable development.
As OECD Secretary General Angel Gurria said: “We are working to ensure that sustainable development and inclusive, green growth remain centre- stage in everything we do. We cannot afford to do otherwise.”
Putting Green Growth at the Heart of Development was prepared through intensive joint work with developing countries – mainly low-income countries – and with a wide group of development co-operation partners. It reviews nearly 80 policies and initiatives from 37 developing countries as well as regional green-growth initiatives.
The many examples described in the report present a clear and hopeful message: green growth can generate both wealth and well-being for citizens of current and future generations. The report also examines the trade-offs between short-term demands and longer-term impacts, and the need to make choices that will deliver a more stable and sustainable future while also ensuring immediate gains.
Beyond the national policy agenda, international cooperation can provide essential support to developing countries in managing a transition to green growth. Financing green infrastructure, strengthening access to international markets, boosting trade in green products and services, and promoting technological transfer and cooperation are key.
What do you look for in a holiday destination – sunshine and sand, fine food, ancient treasures? If none of these send you scuttling off to Tripadvisor, then how about this: fresh air. That’s what one Chinese province is promising in adverts running on national TV: “Take a deep breath, you’re in Fujian.”
The campaign seems to be working: So far this year, the coastal province has seen a 38% rise in visitors, according to NPR’s Rob Schmitz. “The air is so fresh here!” one tourist told him. “Whenever I go to work in Beijing, I have to wear a mask or else I’ll start coughing uncontrollably. It’s just been terrible lately.”
Indeed. Even by Beijing’s standards, air pollution this past winter has been awful, with the city repeatedly blanketed in throat-choking fog. On one weekend in January, the level of airborne fine particles classed as PM2.5, which are especially harmful to health, briefly rose to almost 40 times above the acceptable limits set by the World Health Organisation (WHO). Beijing is not alone: Less than 1% of China’s 500 biggest cities meet WHO air-quality guidelines, according to the Asian Development Bank, and seven of them rank among the world’s ten most polluted cities. According to the in the world from urban air pollution.
None of this is particularly new – China’s problem with pollution has been apparent for years, but the depth of the murk that descended this past winter does seem to have sparked a real bout of soul-searching. China’s media, for example, has been reporting the problem with unusual frankness –“Beijing’s 225 shades of grey,” says a headline in the China Daily, over a set of photos of the smoggy capital. The leadership, too, has responded, promising increased air monitoring and extra efforts.
The air problems in China’s urban areas bring together two major challenges facing the country, both of which get special attention in the OECD’s latest Economic Survey of China, released ahead of the annual China Development Forum in Beijing at the weekend.
The first is the challenge of making China’s rapidly growing cities more liveable. At one level, this means ensuring that citizens have access to breathable air, rapid transport and so on. But there are other, less visible, issues. Setting environmental problems aside for a moment, one of the most pressing concerns the status of internal migrants, who account for around 70% of the growth of China’s cities over the past few decades. Faced with an ageing population and stagnating workforce, China needs that movement to continue but, if that’s to happen, its cities will need to set out a proper welcome mat for migrants. As we’ve noted before, the hukou registration system means people leaving their home area can lose access to services like health and education. That’s bad not just for migrants but also their children. Many of them – perhaps 36 million – get left behind, and are raised by grandparents; those who do move with their parents to the cities – an estimated 23 million – don’t always have access to great education. Chinese cities and provinces have pursued piecemeal reform of the hukou system, but there are growing calls – including from the OECD – for cities to grant residential permits to migrants; recent reports suggest substantial reform may not be far off.
The second great challenge is, of course, the environment. Smog-filled cities are just one face of the country’s environmental degradation, which also encompasses desertification, flooding, soil contamination and water pollution. China has made some progress in tackling these: For example, sulphur dioxide emissions have declined somewhat, although the country remains the world’s biggest emitter, and there has been a slight improvement in water quality – Shanghai’s floating pigs notwithstanding.
Nevertheless, grave problems remain and, as the OECD report notes, a wider range of weapons needs to be used to tackle them, including market-driven pricing of fuels like natural gas and coal and greater use of pollution taxes and levies. The potential impact of China on the global environmental is so great that, unless the country rises to the challenge, it won’t just be the citizens of its own cities who are gasping for air.
网站 (中文) (The OECD’s Chinese-language site)
How much are the oceans worth? Somewhere between $16 and $54 trillion a year according to this report. It may be more, nobody really knows, although Wealth Accounting and Valuation of Ecosystem Services (WAVES), a global partnership of developed and developing countries, international organisations, NGOs and academics, is hoping to find out over the next few years.
The Global Partnership for the Oceans cites figures for some parts of the ocean. Coral reefs for instance provide services to humans worth $172 billion annually. Fisheries are even more lucrative, with seafood sales at $190 billion a year for the catches alone, before the value added by processing. You could add another $50 billion if the fisheries were managed efficiently, according to a World Bank study quoted in Rebuilding Fisheries, a new OECD publication launched this week during OECD Day at Expo 2012 in Yeosu, Korea.
One statistic you’ll see quoted in most discussions about the oceans’ importance is that they cover 71% of the Earth’s surface. What’s less well-known is that the oceans supply almost 99% of the “living space” for our planet’s creatures, far more than the vertical strip of soil and sky we usually think about when biodiversity is mentioned. Very few humans live for long in this space, but two-thirds of us are within 100 km of the sea, so coastal cities feature prominently in discussions of the blue economy (and in the data visualization tool our colleagues at the OECD Factblog developed for the Expo).
The theme of Expo 2012 is the “blue economy” – the various activities taking place on, under or near the ocean. As one of the world’s leading shipbuilding, trading and fishing nations, Korea has a vested interest in using ocean resources in a sustainable way. However, the aim of the exhibition, and the OECD’s contribution to it, is to show that the oceans are vital for all of us. On a global scale, for example, they regulate the world’s climate and provide 16% of the animal proteins we consume. They are important sources of oil and gas, and increasingly of renewable energies too.
Unfortunately, our attitudes have changed little from earlier times when it made sense to talk of “the infinite oceans”. Now, 85% of ocean fisheries are fully exploited, over exploited or depleted. Fertilizer run-off and fossil-fuel use have created 405 oxygen-starved dead zones worldwide, compared with 49 in the 1960s, covering a total area the size of the UK. While we’re making geographical comparisons, the “Great Pacific Garbage Patch” drifting around the North Pacific Subtropical Gyre, known as covers the ocean with plastic debris over an area as big as Texas. And according to some reports, just 15 of the world’s biggest ships may now emit as much pollution as all the world’s 760m cars.
None of these problems can be solved in isolation from the others, nor from a variety of external influences. Fisheries reform for instance can influence and be influenced by labour policy, regional development, environmental legislation, taxes, and tourism, and that’s just on a national scale. A similar list could be drawn up for any ocean-related issue, prompting OECD Deputy Secretary-General Yves Leterme to call for “a more holistic policy perspective to the management of the oceans, their uses and resources” in Yeosu. Leterme and the President of the Korea Maritime Institute (KMI), Dr.Hak-So Kim signed a Statement of Intent between the two organisations which underlines their intention to strengthen co-operation on work related to the future of the blue economy.