OECD: Tackle Environmental Problems Now or Pay More Later

The 2008 OECD Environmental Outlook marries economic and environmental projections through 2030 and offers specific policies to address these challenges.

Angel Gurria of Mexico is Secretary General of the OECD. (Photo courtesy OECD)

"Solutions to the key environmental challenges are available, achievable and affordable, especially when compared to the expected economic growth and the costs and consequences of inaction," OECD Secretary General Angel Gurria said at the worldwide launch of the report in Oslo, hosted by Norwegian Prime Minister Jens Stoltenberg.

"The Outlook is an impressive body of work. It combines hope for the future with an urgent call for action today. It offers important guidance for decision-makers and integrates economic and environmental analysis," said Prime Minister Stoltenberg.

Economic-environmental projections show that global greenhouse gas emissions are expected to grow by 37 percent to 2030 and by 52 percent to 2050 if no new policy action is introduced.

To meet increasing demands for food and biofuels, world agricultural land use will need to expand by an estimated 10 percent to 2030, the report projects.

Water scarcity will worsen due to unsustainable use and management of the resource as well as climate change until one billion more people will be living in areas of severe water stress by 2030 than today, the OECD warns.

Premature deaths caused by ground-level ozone worldwide would quadruple by 2030, and in addition the report says, chemical production volumes in non-OECD countries are rapidly increasing, and there is insufficient information to fully assess the risks of chemicals in the environment and in products.

Drought has ruined this corn crop (Photo courtesy Fullerton College)

A considerable number of today's known animal and plant species are likely to be extinct, largely due to expanding infrastructure and agriculture, as well as climate change, the report warns, saying, "Continued loss of biodiversity is likely to limit the Earth's capacity to provide the valuable ecosystem services that support economic growth and human well-being."

"Countries will need to shift the structure of their economies in order to move towards a low carbon, greener and more sustainable future. The costs of this restructuring are affordable, but the transition will need to be managed carefully to address social and competitiveness impacts, and to take advantage of new opportunities," said Secretary-General Gurría.

The 2008 OECD Environmental Outlook projects that world GDP will almost double by 2030.

The OECD policy simulation shows that it would cost just over one percent of that growth to implement policies that can cut key air pollutants by about a third, and contain greenhouse gas emissions to about 12 percent instead of 37 percent growth under the scenario without new policies.

To keep the costs of action low, the OECD recommends using economic and market-based instruments such as green taxes, efficient water pricing, emissions trading, polluter pay systems, and waste charges.

The elimination of environmentally harmful subsidies for fossil fuels and agriculture is also recommended.

In addition, more stringent regulations and standards for transport and building construction, investment in research and development, sectoral and voluntary approaches, as well as eco-labelling and information are also needed, the OECD advises.

Meltwater stream flowing off the Greenland ice sheet (Photo by Roger Braithwaite, University of Manchester courtesy NASA)

Technological developments will contribute to the solutions but Gurría said the generalized application of breakthrough technologies poses important challenges in the area of intellectual property rights which will have to be confronted.

The Outlook identifies ways to share the cost of policy action globally.

Developed nations have been responsible for the majority of greenhouse gas emissions to date, but rapid economic growth in emerging economies - particularly Brazil, Russia, India and China - means that by 2030 the annual emissions of these four countries together will exceed those of the 30 OECD countries combined.

"Fair burden-sharing and distributional aspects will be as important as technological progress and the choice of policy instruments," the OECD says in its report.

"While OECD countries should take the lead, further co-operation with a wider group of emerging economies, the "BRIICS" countries (Brazil, Russia, India, Indonesia, China and South Africa) in particular, can achieve common environmental goals at lower costs," the report states.

"We must be aware that getting it right in the field of the environment is not only about what to do and how to do it. We also need to address the question of who will pay for what," Gurría said. "The global cost of action will be much lower if all countries work together."

Highlights of the report are online at: www.oecd.org/environment/outlookto2030.

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