The OECD Environmental Strategy: Are we on track?

The OECD Environmental Strategy is in its third year. Governments cannot afford to let up on their commitments.
Director, OECD Environment Directorate

Sticking to deadlines and keeping promises has never been easy for anyone, let alone politicians, for reasons we all understand. But there are some pressing matters that require urgent firm action, not because we have made promises or undertaken commitments, but because there may not be too many second chances to get them right. Some environmental challenges are of this type.

Our economies and incomes have grown at an unprecedented pace, but in too many cases to the detriment of our natural capital. We have made progress towards several environmental goals, to be sure, such as managing demand for water and decoupling the release of air pollutants like sulphur dioxide, carbon monoxide and ozone-depleting CFCs from economic growth. But much more progress is needed. Ecosystems continue to be degraded, persistent and toxic chemicals are widespread in the environment, many fish stocks are declining, and greenhouse gas emissions – particularly from road transport and energy use – continue to grow.

In sum, the basic question still is: how can we continue to grow and overcome global poverty, while doing relatively less damage to the environment that sustains us and all our activities?

Headline summits have come and gone and some of these have helped deal with some of the issues. To make solid progress we need a road map, which is why in 2001 OECD governments adopted the OECD Environmental Strategy for the First Decade of the 21st Century (see below). We are only three years into the 10-year time frame set out in the Strategy, but it is already clear that, in a number of crucial areas, we are “not yet on track” for implementation by 2010. This is a pity now, but could become a cause of major regret in the future if irreversible damage is done to our ecosystems, our climate or our health.

To avoid reaching that point, we must act now. The Strategy highlights the key challenges under five general objectives, and lists 71 rather concrete national measures for action. The overall aim is to move closer to the goal of ensuring environmental sustainability in a cost-effective and socially equitable way. The Strategy made sense and won the endorsement of OECD environment ministers when they met on 16 May 2001 and of ministers of finance and economics the very next day.

While OECD governments are accountable to the commitments they made in the Strategy, they know that they cannot fully achieve them by themselves. This is the global world we live in. Environment ministers from ten non-OECD countries – Argentina, Brazil, Chile, China, India, Israel, Kazakhstan, Russia, Slovenia and South Africa – have been invited to join discussions at the OECD environment ministerial meeting in April 2004, to reflect on common global environmental problems, such as climate change and loss of our biodiversity. It is important to bear in mind that we cannot expect developing countries to come on board international environmental agreements unless the prosperous OECD countries are willing and able to follow through with their own commitments.

Beyond governments, it is also important to work co-operatively with business, labour and non-government organisations. For the first time ever at the OECD, we have asked representatives of these groups to participate in the ministerial meeting too. Indeed, when it comes to environmental issues, we are all members of civil society in many respects: we all contribute to some of the environmental problems, we all suffer from poor practices and benefit from progress.

Are OECD countries making progress? To use a traffic light image we have coined, in 2001 OECD identified a number of “red light” environmental issues that had to be urgently addressed (see OECD Environmental Outlook 2001). Since then, only a few of those dangerous red lights have turned to a less urgent “yellow”, and none has turned to a safe “green”. It is increasingly clear that major political or economic obstacles are blocking the path to reform.

Take the example of climate change and energy. Many OECD countries have implemented or are developing new policies to mitigate greenhouse gas (GHG) emissions at least cost. Emission trading schemes are in place in a number of OECD countries, and planned in others. Carbon or energy taxes are used in 12 countries, and a number are starting to develop project-based flexibility mechanisms, which allow countries to invest in GHG emission reductions abroad and count these reductions to help them achieve their domestic targets. All that sounds promising.

But implementing these policies is harder. The largest and most polluting energy users still often benefit from energy tax exemptions, reducing the economic efficiency of these taxes as well as their environmental effectiveness. Taxes on “dirty” fuels are set too low in most countries, giving little incentive to switch to alternative, cleaner energy sources or to develop new technologies.

Progress at the international level is even slower. The Kyoto Protocol cannot enter into force until more countries ratify it. The prospect of that happening is uncertain, especially as countries cannot agree among themselves on the science of climate change, let alone how to address it. Unfortunately, we are already too late to stop some of the human-induced changes in our climate. This means that policies to reduce greenhouse gas emissions will have to be accompanied by other measures to help us adapt to the effects of climate change, like increased occurrences of extreme weather conditions or sea-level rises.

Pollution is another major challenge. Despite improvements in technology, air quality standards continue to be breached and carbon dioxide emissions from transport are growing as fast as demand for transport rises. Much more ambitious economic and regulatory policies will be needed to reduce the environmental and social impacts of transport growth, particularly road and air transport.

As to stemming the loss of biodiversity, time is not on our side. OECD countries have been working to extend protected areas – these now reach 14.6% of the OECD’s overall land area – but biodiversity loss outside of these zones continues. The percentage of known species that are endangered is increasing, and indicators of the total numbers of vertebrates in the wild continue to register declines. Biodiversity losses like these upset the balance of life on our planet, putting survival at risk, let alone prosperity. More has to be done to integrate biodiversity goals into policies for agriculture, fisheries, tourism and forestry. This is starting to happen, but again, the lights have not switched to green. For instance, a number of key international agreements to protect the marine environment and ensure sustainable fishing have recently entered into force, thanks in part to ratification by some OECD countries, but fish stocks are still declining. And while there is a gradual trend toward the “greening” of OECD agricultural subsidies for instance, by linking them to specific environmental goals, the process remains too slow. The national action governments agreed to in the OECD Strategy of phasing out or reforming all environmentally damaging agricultural subsidies by 2010 is clearly not on track.

Why is so little being done in these areas? What obstacles stand in our way? A lack of adequate and accepted information is one of them. It is not easy to mobilise action when the consequences are long term or uncertain. Some gaps in scientific understanding – on the likely impacts of climate change on the environment and the economy, or of species loss – continue to hamper agreement on appropriate policies. Further improvements in the collection and dissemination of environmental information in OECD countries and our partners beyond will contribute to the development of more effective environmental policies, as well as ensuring increased transparency and accountability in the policy-making process.

Another obstacle is concern about possible effects of environmental policies on income distribution or competitiveness, and a concern that some social groups, like farmers, coal miners or fishers, will suffer from measures more than others. Yet it is possible to address these concerns and still ensure the environmental incentives of particular policies are maintained. For example, water pricing tariffs can be designed so that a user pays more for increasing amounts of water. This provides an incentive for consumers to minimise water use, while still allowing low-income households affordable access to essential water.

The OECD secretariat will, as mandated by our governments, continue to support countries in their efforts to implement the Strategy, through analytical work, peer reviews, information and policy advice. This is important work, but the hard decisions remain with the governments themselves to fully implement these policies and put the Strategy back on track. No one said it would be easy, but on such important environmental matters, we should not be soft on deadlines.

The OECD Environmental Strategy

The OECD Environmental Strategy identifies five inter-linked objectives for enhancing cost effective and operational environmental policies in the context of sustainable development:

  • Objective 1: Maintaining the integrity of ecosystems through the efficient management of natural resources (with a special focus on climate, freshwater, and biodiversity).
  • Objective 2: Decoupling environmental pressures from economic growth (with a special focus on agriculture, transport and energy).
  • Objective 3: Improving information for decision making: Measuring progress through indicators.
  • Objective 4: The social and environmental interface: Enhancing the quality of life.
  • Objective 5: Global environmental interdependence: Improving governance and co-operation.



References

OECD (2004), OECD Environmental Strategy: 2004 Review of Progress, Paris.

OECD (2001), OECD Environmental Strategy for the First Decade of the 21st Century, at: www.oecd.org/env/min

OECD (2001), OECD Environmental Outlook, Paris.

©OECD Observer No. 242, March 2004




Economic data

E-Newsletter

Stay up-to-date with the latest news from the OECD by signing up for our e-newsletter :

Twitter feed

Suscribe now

<b>Subscribe now!</b>

To receive your exclusive print editions delivered to you directly


Online edition
Previous editions

Don't miss

  • One dollar in aid for trade generates eight dollars in extra trade for all developing countries and 20 dollars for low-income countries. Read OECD Secretary General's post on the newly released Aid for Trade at a glance 2015.
  • In the US, many part-time workers were left behind by the economic recovery. The vast majority of the nation’s 26 million part-time workers receive no benefits beyond their paychecks and almost one-third say their financial condition is flat out poor. A Market Watch article.
  • Where in the world are you most likely to be working too much—or napping? Read the results on Quartz.
  • Catherine Mann, OECD Chief Economist, explains on Bloomberg why "too much bank lending can slow economic growth".
  • Interested in a career in Paris at the OECD? The OECD is a major international organisation, with a mission to build better policies for better lives. With our hub based in one of the world's global cities and offices across continents, find out more at www.oecd.org/careers .
  • Come va la vita in Italia? How's life in Italy? The OECD Better Life Index is an interactive online platform in seven languages that goes beyond GDP by offering important insights into measuring well-being and quality of life. Try it for yourself!
  • Millions of refugees have been condemned to a life of misery in the worst displacement crisis since the second world war, according to Amnesty International. Read more on The Guardian.
  • What does it mean to live on less than US$2 a day? Xavier Godinot, Delegate for International Affairs of ATD 4th World and René Locqueneux, a member of this NGO, gave an insightful presentation on the topic based on their field experience, at the 2015 OECD Forum.
  • How to jump-start slack investment to drive global growth and jobs dominated discussions at the annual OECD Ministerial Council Meeting, chaired by the Netherlands, which ended 4 June.
  • The IMF calls for a decisive energy subsidy reform in order to use the freed resources to meet critical public spending needs and to reduce pollution ahead of the Paris climate change summit.
  • More than 35 million young people, aged 16-29, across OECD countries are neither employed nor in education or training according to the newly released OECD Skills Outlook.
  • Have a look at these posters representing a world without fundamental rights at work – including child labour, forced labour and inequality. Read more about this ILO image competition here.
  • Rising inequality threatens social cohesion and growth. Income inequality has reached historical highs in most OECD countries and is still rising.
  • Time to vote! As the dust settles after the UK general election, let’s remember that voting at the ballot box is not an innate right enjoyed by everyone. Indeed, although the number of democracies across the world has spiked from 48 in 1989 up to 95 today, billions of people are still living in non-democratic, authoritarian regimes.
  • How can we achieve a zero-carbon future? A new World Bank report provides a few insights.
  • Today alcohol causes more deaths worldwide than HIV/AIDS, violence and tuberculosis combined. In order to reduce damages to health, the OECD recommends that regular drinkers reduce their consumption by one unit a week, that is, a small glass of wine for example. In addition, increasing prices, regulating advertising, effectively treating drinking problems together with stricter police enforcement would greatly contribute to reducing damages done to individuals and society.
  • video alcohol
  • Africa vs profit shifting African countries heavily rely on the income generated by multinationals’ taxation, which can represent as much as 88% of a country’s tax base. Little wonder Africa is involved in the OECD’s initiative to address tax base erosion caused by profit shifting, known as BEPS. The need to strengthen inter-governmental co-operation to curb cross-border tax losses was reaffirmed at the Africa Tax Administration Forum (ATAF) in Sandton on 21 April 2015.
  • Africa v. profit shifting
  • Rana Plaza
  • Wal-Mart, Other Retailers Sued over Bangladesh Factory Collapse Two years after the April 24, 2013, Bangladeshi factory collapse in the capital of Dhaka, the victims' families filed a lawsuit in U.S. federal court in Washington against Wal-Mart Stores Inc and other U.S.-based companies that sourced out their products from the Rana factory. Read more on Telesur's website.
  • Today, after three years of drought, California is in the midst of a full-blown political and environmental crisis, with restrictions imposed across the state, reports the Financial Times.
  • Lack of water holding back Asian growth In Asia, the world’s most dynamic region with the fastest economic growth, 75% of countries face serious water shortages.
  • ADB water
  • Why is the gap between rich and poor growing despite rises in GDP? Do benefits help? Does aid work? (The Guardian)
  • Greek finance minister Yanis Varoufakis expressed its scepticism towards the Eurozone’s institutions and gave ideas for ways forward. "Greece must become reformable again", Yanis Varoufakis said.
  • Business brief: Israel's water
  • #OECD360: Your country in figures.
  • How to ensure transparency in public procurement? Read Cobus de Swardt's article on OECD Insights.
  • Asia to maintain a strong 6.3% growth rate in 2015 and 2016, according to the Asian Development Bank
  • After three decades of extraordinary economic development, China is shifting to a slower and more sustainable growth path, according to the OECD's latest Economic Survey of China.
  • In pursuit of the American Dream
  • Iceland's strong recovery stems from the good use of its natural resources, the energy sector and tourism according to Peter Dohlman, IMF Mission Chief for Iceland.
  • cyclone
  • Government representatives and experts from around the world are gathering in Japan this week to develop a post-2015 framework for global disaster risk reduction. The World Bank and the Global Facility for Disaster Reduction and Recovery (GFDRR) will share expertise at the conference.
  • Switzerland’s recent moves towards greater tax transparency were welcomed by the Global Forum on Transparency and Exchange of Information for Tax Purposes, based at the OECD, as a boost to international efforts to end tax evasion. Work will continue with Switzerland, notably on implementation, in 2015.
  • Help bridge the gap between business integrity policies & practices:participate in this new OECD survey by clicking on the image.
  • What can we do to promote better literacy skills for all? Read Andreas Schleicher's latest blog on oecdeducationtoday.
  • Secretary General Angel Gurría describes the Programme for International Student Assessment (PISA) as a useful tool to enhance educational systems but states that improving a country's ranking should not be a goal per se. Article in Spanish by El País.
  • pisa
  • [VIDEO] Although many countries have made great progress in narrowing gender gaps in education, new challenges are looming.
  • Tim Harcourt Video
  • G20 and Australia: Bestselling economist Tim Harcourt speaks to the BBC about how Australia has gone from "Down Under to Down Wonder".

Most Popular Articles

Poll

What issue are you most concerned about in 2015?

Euro crisis
Unemployment
Global warming
International conflict
Other

OECD Insights Blog

NOTE: All signed articles in the OECD Observer express the opinions of the authors
and do not necessarily represent the official views of OECD member countries.

All rights reserved. OECD 2015