The OECD is an intergovernmental institution with thirty-five members representing a large portion of the global economy. The OECD also works with other key partners including Colombia, Russia, Brazil, China, India, Indonesia, and South Africa. The mission of the OECD is to promote policies that will improve the economic and social well-being not just of its members but also of people around the world. (1) Climate Change In 2016, the OECD continued to focus on adaptation, climate financing, and implementing the Paris Agreement on Climate Change. In February, the OECD held a workshop to examine how public policy in light of catastrophe modelling can be created to improve climate-resilient infrastructure.1 One key theme from the workshop was the need for governments to help data users to interpret the meaning of existing climate data for their various planning efforts. A second key theme was the emergence of a broad trend towards requiring climate risk disclosures and the need for these risks to be standardized across sectors and markets. OECD states have recognized the role of infrastructure standards and building codes in responding to climate change as well as the need to share liabilities and investment responsibilities between the public and private sector to enhance climate resilience. In regard to financing, the OECD offered a number of research reports intended to increase innovations in financing. In May, the OECD released its report on green investment banks as one possible strategy for increasing the amount of private investment flowing into renewable energy and energy efficiency.2 In October, the OECD sponsored its third Green Investment Financing Forum, covering a variety of topics including promoting private investment in low-carbon and climate resilient infrastructure, managing financial risks from climate change, and ‘greening’ banks, bond markets, and early stage equity finance.3 Based on the existing financing promises and current trends, the OECD predicts that by 2020 states will make available US $66.8 billion from public finance for climate-change-related investments.4 In September, the OECD Climate Change Expert Group sponsored a Global Forum on the Environment and Climate Change that focused on transparency in meeting emission reduction targets and financing climate adaptation and mitigation. The meeting was intended as a practical session to provide participants from states, businesses, intergovernmental organizations, and non-governmental organizations with lessons learned about reporting.5 The OECD attended the twenty-second Conference of the Parties (COP-22) of the United Nations Framework Convention on Climate Change (UNFCCC) in Marrakech in November and offered advice on transport policies, development, investment and financing, urban planning, carbon pricing, eliminating perverse subsidies, and making a transition to a low-carbon future. (2) Water On 13 December, the OECD Council, which sets OECD priorities, adopted a recommendation on water.6 After a two-year consultation process, which involved a range of OECD committees and partner institutions and networks including the Environment Policy Committee, the Committee for Agriculture, the Regional Development Policy Committee, the Regulatory Policy Committee, and the Development Assistance Committee, the Council recommended that both OECD members and non-members adopt water-management policies at both the national and sub-national level that recognize sustainability limits and incorporate knowledge about the uncertainties of both current and future water availability and demand. The OECD calls upon its members to increase water supply through technical and policy innovations including the use of instruments, the introduction of collective entitlements, water efficient technology, and the use of alternative sources of water such as reclaimed water. In addition to improvements to protect water quantity, states are expected to take additional measures to ensure water quality protective of both human and ecosystem health, including applying the polluter pays principle ‘as much as possible where it is mentioned in the legal and regulatory framework, and promoting it where absent.’7 In 2016, the OECD identified that approximately one in ten people (663 million) lacked access to safe water and one in three people (2.4 billion) lacked access to improved sanitation.8 States are also expected to manage water risks and disasters; ensure good water governance; and ensure sustainable finance, investment, and pricing for water and water services.9 (3) Biodiversity Offsets The OECD participated in COP-13 of the Convention on Biological Diversity in December and urged states to do more to invest in biodiversity protection. At the meeting, the OECD launched a report on how to define biodiversity offsets to compensate for project damage.10 The OECD observed that states spend only a small margin of their budget on protecting biodiversity when compared to other social investments.11 The biodiversity offset report emphasized the need for states to create thresholds for what types of biodiversity losses can be offset. The OECD suggested that mandatory offset programs might be more effective than voluntary offset programs because they would be likely to have more oversight from the government and possible sanctions. (4) Green Growth As a multi-year initiative, the OECD has continued to promote green growth. During 2016, a number of research reports were published covering the greening of specific market sectors.12 The OECD participated in the International Transport Forum focused on the theme of ‘Green and Inclusive Transport.’ In July, the OECD sponsored a workshop on greening regional trade agreements through the inclusion of sustainable development objectives in chapters on government procurement and investment.13 Finally, in October, the OECD held a Global Forum on Environment entitled ‘Towards Quantifying the Links Between Environment and Economic Growth.’ The OECD has continued to maintain its Database on Policy Instruments for the Environment.14 (5) Country Reports The OECD Environmental Performance Review (EPR) program has been helping member countries to improve their environmental management for twenty years. An EPR is a process intended to help governments improve policies that impact the environment. It usually takes a year and a half between the first meetings and the formal launch of the report. Three country reports were released in 2016: Chile, France, and Peru. Chile’s report observed that while Chile is the world’s largest copper producer and a major exporter of agricultural, forestry, and fishery products, this natural resource-based economic model has placed pressures on the environment, including increases in air pollution.15 In response to recommendations from its 2005 EPR, Chile has strengthened its environmental institutions and policy framework, but environmental laws need to be better enforced and more investment is necessary, particularly to manage waste and create effectively managed protected areas. The report indicated that Chile’s greenhouse gas emissions grew by 23 percent between 2000 and 2010, and the transport sector’s greenhouse gas emissions are expected to almost double by 2030. France’s report noted important legislative and policy changes including the adoption of the Energy Transition for Green Growth Act and the Paris Agreement at COP-21 of the UNFCCC. The report noted that France has improved its environmental performance, though progress needs to be made in reducing pollution by nitrates and pesticides, improving air quality, and regulating land use.16 While Peru is not a member of the OECD, the first EPR of Peru was released jointly by the OECD and the UN Economic Commission for Latin America and the Caribbean.17 Noting favourably that Peru has modernized its environmental policies by creating a Ministry of the Environment and decentralizing responsibilities to subnational and local authorities, the report offered sixty-six specific recommendations on a wide range of topics including formalizing land tenure to combat deforestation and improving monitoring and enforcement. Within Peru, environmental information is not always easy to access, and there is a need for standardized reporting of pollutant emissions and other environmental indicators. From a green growth perspective, specific recommendations for Peru included better planning for its fisheries sector and hydrobiological resources and evaluating environmentally harmful productive incentives in the farming and forestry sectors. (6) Chemical Management In July, the OECD participated in a Workshop on the Socioeconomic Impact Assessment of Chemicals Management. The workshop aimed to identify the current status of practice and methodologies for cost-benefit analysis of risk management measures and frameworks addressing the human health and environmental impacts of chemicals in OECD member countries. The goal of the workshop was to harmonize OECD methodologies for estimating the economic costs and benefits of managing chemicals as part of best practices for international chemical management. (7) Extended Producer Responsibility In September, the OECD updated its 2001 Guidance Manual for Governments on Extended Producer Responsibility for managing waste streams for packaging, electronics, batteries, and vehicles. The OECD has been promoting extended producer responsibility in emerging economies in Asia, Africa, and South America. As part of its updates, the manual addresses specific concerns for emerging market economies. (8) Conclusion Among intergovernmental organizations, the OECD has continued leadership to achieve a low-carbon future that protects human health and the larger ecosystem. As a policy centre for the world’s largest economies, the OECD offers an important epistemic community for long-term change as countries grapple with maintaining robust economies where environmental resources are under increasing pressure. Through its annual publications, the OECD continues to research how specific environmental policies can also favour economic growth. Environment issues have now been mainstreamed at the OECD. Significantly, since the OECD launched its Better Life Initiative in 2015 to measure perceptions about individual citizens’ social priorities for good living, environment quality has been one of the indicators of a good life. This concept of the environment being front and centre has become part of the institutional culture of the OECD. In 2016, the OECD secretary-general concluded that the ‘OECD is becoming a global reference in the search of a new economic model that works for the environment, not against it.’ As an adviser to policy-makers from so many large economies, hopefully the OECD will remain committed to its goals of facilitating a greener economy in years to come. Footnotes The author would like to thank Ryan Squires for his research assistance. 1 OECD, Investment in Climate-Resilient Infrastructure: Getting the Policies Rights (2016) <http://www.oecd.org/environment/cc/Summary-Record-Expert-Workshop-on-Investment-in-Climate-Resilient-Infrastructure-Getting-the-Policies-Right-24-February-2016.pdf>. 2OECD, Green Investment Banks: Scaling up Private Investment in Low-Carbon, Climate-Resilient Infrastructure (2016) <http://www.oecd.org/env/cc/green-investment-banks-9789264245129-en.htm>. 3 OECD, Third OECD Green Investment Financing Forum <http://www.oecd.org/env/cc/2016-green-investment-financing-forum.htm>. 42020 Projects of Climate Finance towards the USD 100 Billion Goal: Technical Note (2016) <http://www.oecd.org/environment/cc/Projecting%20Climate%20Change%202020%20WEB.pdf>. 5 OECD, Global Forum on the Environment and Climate Change (September 2016) <http://www.oecd.org/env/cc/ccxg-globalforum-september-2016.htm>. 6 OECD Council, Recommendation of the Council on Water, C(2016)174/FINAL (2016). 7 Ibid, s B.IV.5. 8 OECD, Water, Growth and Finance: Policy Perspectives (2016) at 5 <http://www.oecd.org/environment/resources/Water-Growth-and-Finance-policy-perspectives.pdf>. 9 In terms of financing, some of the recommendations for pricing instruments include charging for extraction of water depending on the scarcity of water, charging for pollution, and removing perverse subsidies. 10 OECD, Biodiversity Offsets: Effective Design and Implementation (2016) <http://www.oecd.org/environment/resources/biodiversity-offsets-9789264222519-en.htm>. 11 In 2016, states spent US $50 billion on protecting biodiversity as compared to US $100 billion on agricultural subsidies (some of which harm the environment) and US $500 billion on fossil fuel subsidies. OECD, Greater Efforts Needed to Safeguard Biodiversity (7 December 2016) <http://www.oecd.org/environment/greater-efforts-needed-to-safeguard-biodiversity.htm>. 12 See eg OECD, Farm Management Practices to Foster Green Growth (2016) <http://www.oecd.org/publications/farm-management-practices-to-foster-green-growth-9789264238657-en.htm > (finding that economic productivity of soil and water conservation is site specific but that the environmental productivity is generally positive and integrated pest management is good for the economy, environment, and human health). 13 OECD, Workshop on Greening Regional Trade Agreements: Opportunities and Insights from International Experience (2016) <http://www.oecd.org/tad/envtrade/greening-rtas.htm#Objectives>. 14 OECD Database on Policy Instruments for the Environment <http://www2.oecd.org/ecoinst/queries/ > (covers taxes and fees, tradable permits, deposit-refund systems, and environmental subsidies). 15 OECD, Environmental Performance Reviews: Chile 2016 <http://www.oecd.org/environment/oecd-environmental-performance-reviews-chile-2016-9789264252615-en.htm>. 16 OECD, Environmental Performance Reviews: France 2016 <http://www.oecd.org/environment/country-reviews/oecd-environmental-performance-reviews-france-2016-9789264252714-en.htm>. 17 OECD and Economic Commission for Latin America and the Caribbean, Environmental Performance Reviews, Peru 2016: Highlights and Recommendations <http://www.oecd.org/env/country-reviews/oecd-eclac-peru-highlights-recommendations.htm>. © The Author 2017. 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Yearbook of International Environmental Law – Oxford University Press
Published: Dec 28, 2017
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