A 50% rise in global greenhouse gas emissions by 2050, higher temperatures, with more droughts and storms harming people, crops and buildings; more animal and plant species becoming extinct under expanding farmland and urban sprawl; dwindling natural resources; a billion more people living in water-stressed areas by 2030, with more pollution, disease and premature deaths ahead.

This “worst-case” scenario, set out in the 2008 OECD Environmental Outlook, should be enough to grab anyone’s full attention.

Secretary-General Angel Gurría led a high-level mission of OECD economists and environmental experts at the UN Climate Change Conference in Bali in December. In this extract from one of his interventions at the conference, Mr Gurría explains some of the reasons why economics and markets must be at the heart of any effective and equitable strategy to tackle climate change.

The UN Climate Change Conference in Bali in early December 2007 may have raised new hopes of progress, but as everyone knows, dealing with climate change will require more than just political goodwill. Providing for abundant, affordable, clean energy will require considerable investment in new power generation–more than US$11 trillion to 2030, based on an estimate in the IEA’s World Energy Outlook 2006.

More than three times the number of people around the world could be exposed to coastal flooding by 2070, largely because of climate change, a new report argues. With urban development along coasts increasing, an estimated 150 million people–up from 40 million people today–could be exposed to a one in 100 years coastal flood event.

The environment, particularly climate change, features high on the agenda in OECD business in the months ahead.

“Environment and Global Competiveness” is the theme of the 2008 OECD environment ministers meeting (Meeting of OECD Environment Policy Committee at Ministerial Level), which will take place 28-29 April. Among the highlights, ministers will discuss the results of the OECD Environmental Outlook to 2030, to be released on 5 March. Policy discussions will likely touch on environmental priorities for the coming decades, environmental co-operation with major emerging economies, competitiveness, eco-innovation and climate change.

The United Nations Framework Convention on Climate Change Conference in Bali in December 2007 was high in political stakes as well as emotion. But did it produce a result and what more might be done? New Zealand’s climate change ambassador offers his views.

Welcome to this special online focus on climate change, in view of the UN Climate Change Conference in Bali, Indonesia, 3-14 in December. "Ambitious policies to tackle climate change should lead to a structural shift in the economy – away from carbon-intensive activities. So the question that remains is: how can this transition be managed in an economically efficient and socially responsible manner? We should not exaggerate the cost of change. Action is affordable."

Energy consumption, and in particular the burning of fossil fuels, is the main source of human-induced greenhouse gas emissions. But energy is also a fuel for economic growth, particularly in the fast developing economies of the world. The challenge is to maintain economic growth, while reducing the carbon-content of energy and increasing the efficiency of its use.

Prof Vaclav Smil’s lucid and measured thinking is correct in that we must be realistic about renewable energy’s future (No 258/259, December 2006). But I wonder if he is not being too dismissive of solar energy.

Cotis leads top French bureau–
Jean-Philippe Cotis, the OECD’s chief economist, has been appointed as director general of the French national statistics institute INSEE (Institut national de la statistique et des études économiques, or the National Statistics and Economic Studies Institute).

Market-based credits can help control emissions alongside other instruments, though the system needs more work. And time. 

Investment in clean technologies can help achieve a wide range of environmental objectives, from mitigating climate change, to controlling air and water pollution, and enhancing resource efficiency in general. Indeed, many governments now see technological innovation as a key channel through which they can lift their economies onto a more sustainable path. But what role can public policies play in encouraging such innovation?

OECD Observer No 258/259 December 2006

Satellites are not just about communications or defence, but can help us understand if not resolve some difficult environmental challenges, including climate change. They are investments in innovation whose benefits for humanity should speak for themselves.

As political leaders gathered in Heiligendamm in northern Germany this June and before that at the OECD in Paris in May, the concern on everyone’s minds was the future shape of the global economy.

Your energy focus covers the renewable question well (No. 258-259, December 2006). But what if the renewable promise became a broken one? It might, if mindsets don’t change. Thanks to technological advances and climate change fears, energy has pushed to the front stage again. Governments have been slower to move. Also, as Vaclav Smil’s article shows, the current energy system is based on high-energy density sources, like oil and coal, supplying nationwide energy grids (“21st century energy: Some sobering thoughts”).