Wednesday, May 25, 2011

Environment: Green and growth go together,3746,en_21571361_44315115_48034436_1_1_1_1,00.html
Governments must look to the green economy to find new sources of growth and jobs. They should put in place policies that tap into the innovation, investment and entrepreneurship driving the shift towards a greener economy.

Green growth makes economic as well as environmental sense. In natural resource sectors alone, commercial opportunities related to investments in environmental sustainability could run into trillions of dollars by 2050.

The OECD Green Growth Strategy, and the new report, Towards Green Growth, provide a practical framework for governments to boost economic growth and protect the environment.
Two broad sets of policies are essential elements in any green growth strategy: the first set mutually reinforces economic growth and the conservation of natural capital, including core fiscal and regulatory settings and innovation policies. The second includes policies that provide incentives to use natural resources efficiently and make pollution more expensive.

Replacing natural capital with physical capital is expensive and the infrastructure needed to clean polluted water can be costly, but the cost of inaction can be higher still. Greening growth now, the report argues, is necessary to prevent further erosion of natural capital, including increased scarcity of water and other resources, more pollution, climate change, and biodiversity loss, all of which can undermine future growth.

In addition to the Synthesis Report, the document Tools for Delivering on Green Growth outlines options available to policy makers for developing green growth strategies. The report Towards Green Growth – Monitoring Progress: OECD Indicators outlines ways to measure progress.

The OECD will continue to support national and global efforts to promote green growth in the run-up to the Rio+20 Conference. Going forward, OECD will integrate green growth into national reviews and in future work on indicators, toolkits, sectoral studies and development co-operation.

Further information on the Green Growth Strategy and related work is available at

Key facts from the report:
  • USD 112 trillion, value of fuel saving between 2020 and 2050 from investment in low-carbon energy systems
  • EUR 153 billion, the economic value in 2005 of insect pollinators (mainly bees) for the main crops that feed  the world
  • USD 2.1 to 6.3 trillion, potential commercial opportunities by 2050 related to environmental sustainability in natural resource sectors alone
  • 1991, the year Sweden introduced a carbon tax.
  • The economy has continued to grow, expanding by 50% since then.
  • 1.7 million, the number of avoidable deaths in the world each year from water pollution, primarily among children under 5 years old
  • 6.4 million, number of avoidable deaths from air pollution
  • Between 1999 and 2008, patented inventions increased annually by: 24%, for renewable energy, 20%, for electric and hybrid vehicles, 11%, for energy efficiency in building and lighting 
  • 25%, share of green technologies in all venture capital investments in the United States in the first half of 2010
  • 26%, share of government energy R&D budgets devoted to energy efficiency and renewable energy, up from 13% in 1990
  • GERMANY: green pioneer. The National Strategy for Sustainable Development (2002) defined targets for 21 different sectors. In 2010 nearly 17% of electricity supply was generated from renewable sources, surpassing the target value of 12.5%.
  • CHINA: renewable energy. China aims to produce 16% of its primary energy from renewable sources by 2020.
  • Ageing water infrastructure is increasingly a problem in developed countries. Some estimates suggest that the United States will have to invest USD 23 billion annually for the next 20 years to maintain water infrastructure at current service levels, while meeting health and environmental standards.
  • The United Kingdom and Japan will need to increase their water spending by 20 to 40% to cope with urgent rehabilitation and upgrading of their water infrastructure.
  • According to the the WHO, in developing countries, USD 18 billion will be needed annually to extend existing infrastructure to achieve the water-related MDGs, roughly doubling current spending. An additional USD 54 billion per year will be needed  just to ensure continued services to the currently served population.
  • Investment in water infrastructure can reduce the strain on government health budgets by reducing external costs from adverse health impacts resulting from poor water and sanitation services. Benefit- to-cost ratios have been reported to be as high as 7 to 1 for basic water and sanitation services in developing countries.
  • 0.012%, the current share of green bonds in the USD 91 trillion global bond market
  • under reasonable assumptions about the adjustment patterns in the labour market, OECD employment would increase by 7.5% over the period 2013-2030, against 6.5% in absence of mitigation actions, and this without any loss of purchasing power for workers.
  • 10% reduction, in global GHG emissions by 2050 from removing fossil fuel subsidies 
  • 2%-4%, the potential real income gains from removing fossil fuel subsidies
The report urged more innovation to favor investments in clean energies such as wind or solar power and a drive to place more value on everything from public health to clean water.

"There is scope for scaled up issuances of green bonds (in the hundreds of billions per year)," the report said. The 34-nation group said the market size of all green bond issuances to date was about $11 billion, "a drop in the ocean" amounting to about 0.012 percent of the capital held in global bond markets estimated at $91 trillion.  But a condition for a more liquid market for green bonds was "transparent policies based on long-term, comprehensive and ambitious political commitments," it said.

The costs of fighting climate change could be halved on average if the world placed a monetary value on longer lifespans caused by a move from high-polluting fossil fuels.

The United States would benefit most, according to the estimates. Gains in life expectancy through reduced air and water pollution "would overcome the monetary cost of climate change mitigation by a significant amount," it said.
The OECD pointed to estimates that it would cost $46 trillion to adapt to and combat climate change in the four decades to 2050 -- about $1 trillion a year.

Organization for Economic Cooperation and Development (OECD)
Press Release dated May 25, 2011
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