Climate change is a pressing challenge, requiring leadership and determined action. At the same time, people are concerned that policies do not put them at an economic disadvantage or unnecessarily undermine their welfare.

Can governments balance these concerns? The OECD’s Environment Policy Committee meets at ministerial level on 28-29 April 2008 under the theme of global competitiveness. Some non-OECD developing countries will also participate, as will stakeholders from business, labour and civil society.

GDP growth has slowed, but the positive output gap remains large, with labour and capacity shortages evident. The inflow of workers from abroad has allowed employment to rise strongly. Nevertheless, wage growth is now gaining momentum, and loss of competitiveness is expected to weigh down on growth in the coming years.

Anyone who wonders whether a flexible labour market can exist alongside a robust social security system should look no further than Denmark. There, employment protection legislation is less rigid than in some of its neighbours, but unemployment benefits are higher than in more deregulated Anglo-Saxon countries. On the other hand, seriously hunting for work is a precondition of receiving those benefits.