Charles Baubion, OECD Directorate for Public Governance, and Clara Young, OECD Insights
It has been a wet winter in Paris and the River Seine is rising fast: 2 cm, or about an inch, every hour. This will bring the Seine to a little over six metres, as measured by the Austerlitz monitoring station or, as Parisians will tell you, up to the thighs of the Le Zouave statue on the Pont de l’Alma (our photo). That’s how high it got in 2016. Already, several major roadways along the river banks have been flooded over, while the city authorities are issuing warnings, not just in Paris, but in several French cities. How bad can it get?
The 2016 flood caused more than €1billion worth of insured damage, two deaths, and severe disruptions to the transport system. Well over 17,000 people were forced to leave their homes. While upper parts of the river catchment suffered significant damage, Paris itself was spared. If the water had gone 25 cm or 10 inches higher, it would have been a large-scale crisis, authorities said. There is no room for complacency, and even if the peak this time is officially expected to be reached in the next few days, everyone is monitoring the rainfall closely.
Before 2016, floods in Paris occurred on average every 20 years. The Seine has not significantly overflown since 1955, the high-water mark being the great flood of 1910. At 8.6 m on the Austerlitz scale, the river turned Paris into Venice that winter. In its 2014 Review of Risk Management Policies: Resilience to Major Floods in the Seine Basin, the OECD estimated that a flood of the same magnitude today would cost France between €3 and €30 billion.
The OECD made 14 recommendations on how the Paris region could boost flood resilience and emergency preparedness in the review. More than half of these have been put in place says the follow-up report, released this week, but a better integration of flood risks into urban policies is still being held up by governance and financing difficulties.
Decentralisation and the consolidation of greater Paris into the Grand Paris Metropolitan Authority can open up co-operation on flood management in new administrative structures. The Grand Paris Metropolitan Authority should work closely with local authorities in the Seine basin to define a global, long-term flood strategy for the region.
A flood-resilience framework would give coherence to initiatives such as a charter to design resilient neighbourhoods and a serious rethink of areas within the flood plain that are currently earmarked for densification. Priority could be given to upgrading protective dykes and quay walls along the river as well as critical infrastructure vulnerable to flooding. It could spur storm preparedness for businesses, even small ones, so that they can keep going even as the waters rise. Examples from the reconstruction of a resilient New Orleans after Hurricane Katrina, or New York after Sandy, could inspire Paris to build up its own resilience before disaster hits.
All of this requires money of course and this week’s report finds that available flood prevention funding is still not enough. For the past 20 years, there has been talk of developing flood water storage–marshlands and an artificial lake–at La Bassée, upstream from Paris. It would be able to take in 55 million cubic metres of water but costs an estimated €600 million. To fund this and other flood resilience projects, the government needs to develop a more ambitious, long-term and holistic strategy co-ordinated with anybody who benefits from flood protection, whether it be network operators, enterprises or local authorities. Even individual citizens in what is one of the richest regions in Europe could do their part by paying a flood prevention tax. Local authorities could explore cutting-edge financial mechanisms to fund initiatives, such as green bonds.
In 2024, Paris will host the Olympic Games. With its ambition to produce 55% less carbon emissions than the 2012 London Olympics, Paris hopes to stage the greenest games in history. If it manages to incorporate flood risk into its planning now, the Olympic Games will be high and dry.
References and links
Read the press release “Further improvements needed to manage major flood risk in Paris and Seine basin” at http://www.oecd.org/newsroom/further-improvements-needed-to-manage-major-flood-risk-in-paris-and-seine-basin.htm
OECD (2014), Seine Basin, Île-de-France, 2014: Resilience to Major Floods, OECD Publishing, Paris.
Read “Small Business Storm Preparedness” at https://static1.squarespace.com/static/50dcbaa5e4b00220dc74e81f/t/ 523d9e21e4b0019d4f5b07e9/1379769889160/RedHookStormPreparednessPlan.pdf
Read “What if Paris flooded” in the OECD Observer at http://oe.cd/2bZ
Ronnie Downes, OECD Budgeting & Public Expenditures Division
Ever hear of triple-bottom line accounting? This is what businesses use to go beyond the usual financial balance sheet to ensure their accounts reflect environmentally and socially responsible profits and loss. Shareholders and clients increasingly want companies to be clean and responsible in their business practices, to such an extent that it can affect their stock value.
But what about government? Shouldn’t public finances also follow such quality criteria so that we can hold our politicians to account and ensure our tax money is taking care of the environment?
In our view, budgeting is not a “neutral” reporting exercise, but one of the most effective ways of making sure that public money is put to work properly, and that policies are actually helping governments to achieve important goals, like fighting climate change and cutting pollution, for instance.
“Green budgeting” aims to use the budget–taxes, spending and policy co-ordination–to assess and promote the alignment that is essential to meet environmental goals. For example, green budgeting shows financial outlays that have positive climate change impacts, and highlights tax policy choices that must be confronted as fuel is “decarbonised”, whittling away a major source of government revenues.
Many large private corporations employ the triple-line accounting championed by the likes of the Global Reporting Initiative, an independent organisation, to measure overall company performance according to not only traditional profit and loss, but social responsibility to people, and environmental performance as well. But the public sector has been slow to do the same. This will have to change. The climate change targets we have set in the Paris Agreement, Aichi Biodiversity Targets and the United Nations’ Sustainable Development Goals require that governments know what portion of their budgets is moving their countries towards reaching these targets and what portion is hindering it, and to craft their policies accordingly.
With the backing of France and Mexico, OECD Secretary-General Angel Gurría announced the green budgeting initiative at the One Planet Summit in Paris in December 2017, along with a call for meaningful carbon pricing.
French president Emmanuel Macron welcomed the initiative enthusiastically: “We are launching the “Paris Collaborative on Green Budgeting” within the framework of our zero-emission objective,” he said at the global climate financing summit. “Analysis of the budgets of OECD countries furthers transparency, and I thank Angel Gurría for his contribution to this framework. The work of the OECD will enable budget presentations launched by a group of pilot countries. Obviously, we will be contributing with presentations that show how the budget each year is distributed according to climate objectives.”
The OECD has brought together a cross-disciplinary group of environmental, tax, budget and fiscal affairs experts who will partner with countries to help them assess and improve their budgets and fiscal policies for climate resilience. Among other things, green accounting looks at how subsidies that are harmful to biodiversity or which push the planet’s carbon emissions output compare with resources the government puts in these two areas. The Collaborative will analyse how coherent fiscal policies are with developing low-emissions, sustainable strategies. And, taking inspiration from the OECD’s work on “gender budgeting”, which determines how budgets impact gender equality, it will promote environmentally-sensible budgeting.
The OECD will work with countries to set a new global agenda for green budgeting with agreed-upon definitions, and common methods, guidelines and tools to bring about sustainable public finance flows. Tools include those that track the impacts of decarbonisation and carbon pricing on fossil fuel use and tax revenues in each country, and voluntary “green budget statements” to show the environmental credentials of the annual budget.
Companies adhere to triple-line accounting because it shows the true cost of doing business. Likewise, by knowing the environmental costs and benefits incurred in serving its citizens thanks to green budgeting, governments will be better able to raise the planet’s bottom line.
References and further reading
OECD (2017) Investing in Climate, Investing in Growth, http://oe.cd/g20climate
OECD (2015) Recommendation of the Council on Budgetary Governance, http://oe.cd/UA
OECD (2016), Effective Carbon Rates: Pricing CO2 through Taxes and Emissions Trading Systems, OECD Publishing, Paris, http://oe.cd/2bz
For more on the Global Reporting Initiative today, see www.globalreporting.org and read Massie Robert Kinloch (2001), “Reporting on sustainability: A global initiative”, OECD Observer No 226/227, Summer, http://oe.cd/wbO
Robert Akam and Guillaume Gruere, OECD Trade and Agriculture Directorate
The wet and verdant expanse of the Mekong Delta’s rivers and farms is a veritable rice bowl for the world. Not only do the region’s paddies produce half of Viet Nam’s rice crop yearly, the country is the world’s third largest rice exporter, with 17% of world exports of paddy rice, the vast majority of which is produced in the Mekong River delta.
But the natural wealth of the great delta belies serious risks which people living in this fragile, low-lying ecosystem now face. Quite simply, the abundant freshwater that defines this region is coming under threat.
In recent years, saline water has started to encroach further inland from the ocean, to such a degree that farmers in some areas of the delta now speak of a “salty season”. Some have even had to change from growing rice to farming shrimp which can cope in the now brackish water. Local communities are increasingly turning to pumping groundwater for irrigation, aquaculture and drinking water, but this only accelerates the salinisation. Pumping also causes land subsidence and depletes underground water supplies, reducing water security for future generations.
Meanwhile, sea levels are expected to rise in the region by 45-75 cm by 2090. This is a major threat to a part of the world which on average is less than two metres above sea level. A rise in the sea level of only 30 cm could see the loss of nearly 200 000 hectares of rice cultivation.
These risks are compounded by extensive dam-building along the river’s length and the development of sand mining. Together these activities severely impede the flow of the sediment that supports fish and shrimp farms and replenishes soils in the delta lost to erosion.
The economic risks are significant, and not just for Viet Nam. How long will it be possible to maintain rice production given the ongoing damage to the ecosystem? And at which point will the impact of these water risks begin to affect global markets?
The Mekong Delta is one of a number of localised agricultural regions in the world that face acute water risks, which we have identified as water-risk “hotspots” that require a targeted policy response. These water risks are not only the result of climate change but involve a range of factors,including farming itself, that cause water shortages, floods and degradation of water quality, all of which threaten agricultural production.
Our projections of future water risks suggest that China, India and the United States will be the three countries where agricultural production will be the most severely affected globally. Water stresses in the hotspot regions of northeast China, northwest India and the southwest United States alone would result in price increases of 5-8% globally for certain commodities, such as cotton, maize and wheat, and cause significant shifts in their trade too. Our analysis identifies Viet Nam as facing the world’s fourth highest water risks for rice production.
In the face of water risks, how can we safeguard agricultural production and our food security? Targeted adaptation and co-ordination will be key here. Farmers can shift production–as is already taking place in the Mekong delta–or improve their agricultural practices, such as changing when in the year they plant crops or adopting new and adapted rice varieties. At the same time, agro-food companies could work with farmers to improve their practices, such as by providing them with saltwater monitoring systems, or by encouraging rainwater collection as a supply of freshwater in place of groundwater during the dry season.
In parallel, governments must focus their attention and efforts on hotspot regions by tailoring existing policy instruments and introducing new measures that directly address water risks, while ensuring their actions complement those of private actors. They also need to strengthen market and trade relationships at the national and international levels to dilute price effects and ensure regional impacts are contained. This response would be supported by efforts at the international level to share information about water risks to reduce the spread of indirect impacts.
Just as with our case studies in northeast China, northwest India or the southwest United States, public and private actors in the Mekong delta are now taking the first steps to mitigate agriculture water risks in the region, as discussed at the first Asia Pacific Economic Cooperation (APEC) Meeting of Water Resource Authorities on “Challenges for food security in a context of climate change”, in Viet Nam in August 2017.
These efforts need to be intensified in a strategic and co-ordinated manner, as we argue in Water Risks Hotspots for Agriculture, to ensure that they effectively reduce the risks for future generations. With the right policies and approaches, not only can food production in hotspots such as the Mekong delta and other farming regions be preserved, but people’s livelihoods and the great ecosystems we rely on can also be secured.
References and further reading
The report findings were presented during a OECD: Green Talk Live webinar on 18 October 2017, the recording of which is available at: https://www.youtube.com/watch?v=BYX6sUk6DFI
OECD (2017), Water Risk Hotspots for Agriculture, OECD Publishing, Paris.http://dx.doi.org/10.1787/9789264279551-en
USDA Foreign Agriculture Service (2012), VIETNAM: Record Rice Production Forecast on Surge in Planting in Mekong Delta, Commodity Intelligence Report, December 12 2012. https://ipad.fas.usda.gov/highlights/2012/12/Vietnam/
An overview of the OECD’s work on water use in agriculture can be found here.
(References updated on 18 January 2018)
The blog was inspired by presentations given by C. Krittasudthacheewa (Stockholm Environment Institute), Nguyen Hieu Trung (University of Can Tho), Le Duc Trung (Viet Nam National Mekong River Committee) and Harro Stolpe and Katrin Broemme (Ruhr-University of Bochum, Germany) at APEC’s First Meeting of Resource Authorities in Can Tho, Viet Nam, August 18-19 2017.