Director OECD Environment Directorate

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1 For more information, see Launch of the OECD Environmental Performance Review of Slovenia, Ljubljana, 6 June 2012 Simon Upton Director OECD Environment Directorate

GDP per capita ('000 USD) 70 GDP +124% 60 50 40 OECD GDP +478% 30 GDP +295% 20 GDP +458% WORLD BRIICS RoW 10 0 0 1 2 3 4 5 6 7 8 9 10 OECD Population

2 GDP per capita ('000 USD) 70 GDP +124% OECD GDP +478% 30 GDP +295% 20 GDP +458% WORLD BRIICS RoW OECD Population (billions) RoW BRIICS WORLD Source: OECD (2012), OECD Environmental Outlook to 2050, Baseline projection using ENV-Linkages Population model (billions)

3 Energy efficiency Fuel prices Yield efficiency Linking economy and environment Population & demographics Capital supply Natural resources Economic growth Energy use Bioenergy Land use Local air pollution (under construction) GHG emissions Deforestation Health & environment Climate change Water stress & water quality Biodiversity 3

4 Deaths (millions of people) Environmental Outlook to 2050: Health & Environment Global premature deaths from particulate matter and groundlevel ozone Ground-level ozone Particulate Matter Source: OECD Environmental Outlook Baseline; output from IMAGE 4

5 6 000 Environmental Outlook to 2050: Water Global water demand: Baseline scenario, 2000 and 2050 irrigation domestic livestock manufacturing electricity Km % +400% +130% World OECD BRIICS RoW Source: OECD Environmental Outlook Baseline; output from IMAGE 5

6 Environmental Outlook to 2050: Water Nitrogen effluents from wastewater: Baseline, 2000 and OECD India China Africa Rest of the world Millions of tonnes of N / year Source: OECD Environmental Outlook Baseline; output from IMAGE 6

7 MSA Environmental Outlook to 2050: Biodiversity Effects of different pressures on terrestrial MSA: Baseline, 2010 to % Infr+Encr+Frag 0-90% 80% 70% 60% 50% Climate Change Nitrogen Former Land-Use Forestry Pasture Bioenergy Food Crop Remaining MSA Source: OECD Environmental Outlook Baseline; output from IMAGE 7

8 GtCO 2 e 90 Environmental Outlook to 2050: Climate Change GHG emissions by region: reference scenario, OECD AI Russia & rest of AI Rest of BRIICS ROW Source: OECD Environmental Outlook Baseline; output from ENV-Linkages. 8

9 Intensity of GHG emissions and GDP Emissions intensity (kg CO 2 e / 2010 USD PPP) RoW RoW GHG emissions 13 GtCO 2 e BRIICS WORLD BRIICS GHG emissions 19 GtCO 2 e World GHG emissions 48 GtCO 2 e OECD OECD GHG emissions 16 GtCO 2 e RoW GHG emissions 22 GtCO 2 e OECD GHG emissions 19 GtCO 2 e BRIICS GHG emissions 39 GtCO 2 e World GHG emissions 81 GtCO 2 e RoW OECD WORLD BRIICS GDP (thousand GDP millions (billions USD, , USD PPP)

10 Challenges are so big that we can t afford expensive solutions

11 Environmental Outlook to 2050: What policies do we need? Make pollution more costly Source: OECD Environmental Outlook Baseline; output from IMAGE 11

12 Tonnes oil equivalent per million USD GDP unit Fuel taxes, pre-tax fuel prices and energy use in the transport sector, per unit of GDP United States United States Petrol use per GDP unit Petrol use per GDP unit Diesel use per GDP unit Diesel use per GDP unit Other use per GDP unit Other use per GDP unit Petrol tax rate, Petrol tax rate, Diesel tax rate, Rotterdam spot price, 98 octane unleaded petrol Source: IEA s energy balances per litre

13 Tonnes oil equivalent per million USD GDP unit Fuel taxes, pre-tax fuel prices and energy use in the transport sector, per unit of GDP Petrol use per GDP unit Diesel use per GDP unit Other use per GDP unit Petrol tax rate, Diesel tax rate, Rotterdam spot price, 98 octane unleaded petrol United Turkey States Petrol use per GDP unit Diesel use per GDP unit Other use per GDP unit Petrol tax rate, Diesel tax rate, Rotterdam spot price, 98 octane unleaded petrol per litre Source: IEA s energy balances

14 Per cent of GDP Environmentally related taxes: benefit the environment, innovation & raise revenues (Revenues in % of GDP, 2010) Energy Motor vehicles Other 3.0 *: 2009 figures Source: OECD/EEA database on instruments for environmental policy;

15 Environmental Outlook to 2050: What policies do we need? Make pollution more costly Value and price the natural assets and ecosystem services Source: OECD Environmental Outlook Baseline; output from IMAGE 15

16 Mismeasurement and mismanagement % of GNI Forests & protected areas Subsoil Assets Pasture Land Sub-Saharan Africa Net saving 7.6% Education +3.3% Resource depletion -16.1% Source: World Bank Wealth of Nations Pollution -1.0% -6.2% Net Foreign Assets Intangible Capital Adjusted net savings Crop Natural Capital Produced Capital 28% of wealth USD 2005, per capita

Better measurement and better management Net saving 26.

Assets Wealth Produced Capital Intangible Capital USD 280,000 per

17 Better measurement and better management Net saving 26.2% Savings rate Education +6.0% Resource depletion -16.1% Pollution -0.1% Norway Natural Capital Net Foreign Assets Wealth Produced Capital Intangible Capital USD 280,000 per capita 16.2% Adjusted net savings OECD average, 6.8% Norway OECD % of GNI USD 2005, per capita Source: World Bank Wealth of Nations

18 Environmental Outlook to 2050: What policies do we need? Make pollution more costly Value and price the natural assets and ecosystem services Remove environmentally harmful subsidies Source: OECD Environmental Outlook Baseline; output from IMAGE 18

19 Why make CO2 cheaper if you re trying to make it scarcer? USD $409 billion 2010, developing country fossil fuel consumption subsidies $45-75 billion 2010, in fossil fuel support in OECD countries $ 44 billion, 2010, global renewable electricity subsidies Income gains from unilateral removal of fossil fuel consumer subsidies in emerging and developing countries (% change in HH income vs BAU) 6% less emissions globally from removal of these fossil fuel subsidies Oil-exporting countries India China Russia Rest of the World Non-EU Eastern European Countries Source: OECD (2012), OECD Environmental Outlook to 2050, Baseline projection using ENV- Linkages model based on IEA data; OECD and IEA analysis see website: 19

20 Environmental Outlook to 2050: What policies do we need? Make pollution more costly Value and price the natural assets and ecosystem services Remove environmentally harmful subsidies Devise effective regulations and standards Encourage green innovation Source: OECD Environmental Outlook Baseline; output from IMAGE 20

21 Israeli freshwater use (2009) a Abstraction Abstraction per capita per capita Intensity of Intensity use of use l Israel Israel Israel 86.4 y Germany Germany Germany y Turkey Turkey Turkey a Australia Australia Australia Spain Spain Spain sunited States United StatesUnited States m 3 / capita m 3 / capita a) vailable Or latest year. available year. Source: D, Environment OECD, Environment Directorate. Directorate abstraction as abstraction % as % of internal resources of internal resource a) Or latest available year Source: OECD, Environment Directorate. 21

22 Israeli economic efficiency of agricultural water use, Indice 1986= Agriculture output value per m 3 of water used for irrigation Real agriculture freshwater price (deflated by the consumer price index) Source: OECD (2010), OECD Review of Agricultural Policies: Israel,

23 Israeli Patents in selected environment & climate-related technologies number of patents 100 Number of patents General environmental management technologies, Total patents Water pollution abatement Patents counts based on the priority date, the invetors s country of residence and use of fractional counts on PCT fillings at international phase (EPO designation). 23 Source: OECD (2011), OECD Patent Statistics Database; OECD, Environment Directorate.

Number of patents Number of patents (all sectors) Inventive Activity in Solid Waste Management in Germany 45 40 35 30 25 20 15 10 Packaging Waste Recycling

fields (right axis) Material recycling Incineration and energy recovery Solid waste collection Fertilizers from waste Waste management - not elsewhere

24 Number of patents Number of patents (all sectors) Inventive Activity in Solid Waste Management in Germany Packaging Waste Recycling Law Mandatory Waste Recovery EPR Law Landfilling Law All tech. fields (right axis) Material recycling Incineration and energy recovery Solid waste collection Fertilizers from waste Waste management - not elsewhere classified Note: The Figure shows the number of patent applications filed under the Patent Co-operation Treaty. Source: OECD Patent Statistics Database; OECD Indicator of Environmental Technologies. 24

25 You can t manage what you don t measure

26 A framework for green growth indicators Economic activities (production, consumption, trade) Consumption Households Governments Investments Outputs Income Goods& services Residuals Production Recycling, re-use, re-manufacturing, substitution Multi-factor productivity Inputs Labour Capital Resources Policies, measures, opportunities 4 Taxes Subsidies, Regulations 3 Amenities, health & safety aspects Pollutants waste 1 Energy & raw materials water, land, biomass, air Investments Innovation Trade Education & training Sink functions The natural asset base 2 Resource functions The socio-economic context and characteristics of growth 1: Indicators monitoring environmental and resource productivity 2: Indicators monitoring the natural asset base 3: Indicators monitoring the environmental quality of life 4: indicators monitoring economic opportunities and policy responses

27 What you don t know can hurt you

OECD Environmental Outlook to 2050: The Consequences of Inaction

OECD Environmental Outlook to 2050: The Consequences of Inaction Simon Upton Environment Director, OECD New York, 21 March 2012 2 Energy efficiency Linking economy and environment Fuel prices Yield efficiency