Concerns for the world economy were already building when OECD governments met for the annual Ministerial Council Meeting (MCM) last June.

Financial market turbulence and climate change also featured as headline issues at this year’s OECD Forum (www.oecd.org/forum2008). The Forum is civil society’s chance to influence “OECD Week”, and is held in conjunction with the annual ministerial meeting.

2008 will be a decisive year in the battle against climate change. Hopefully, it will see us forge an international consensus so an agreement can be reached in Copenhagen in 2009 that will allow us to build on the Kyoto Protocol.

How to be green and competitive was the centre of attention when environment ministers of OECD countries met at the end of April for the first time in four years. How to fight climate change and maintain competitiveness is a question that concerns many countries outside the OECD too, and the governments of four candidate countries for OECD membership–Chile, Estonia, Israel and Slovenia–participated at the conference, as did Brazil, China, Indonesia and South Africa, four countries with whom the OECD is strengthening its relations in a programme of “enhanced engagement”.

With the world’s attention focused on climate change, the main question is how can global carbon emissions be reduced effectively? There is no single solution, which is why we must look seriously again at the importance of forests, in particular at an approach known as Reducing Emissions from tropical Deforestation and Degradation (REDD), and the incentives needed to achieve it.

We hear again and again that we must choose between having a stable climate and having a strong global economy. This is a false choice.

Harsh financial reality often rides roughshod over good intentions when it comes to corporate and national balance sheets. Climate change is no exception, for though it may rouse worldwide concern, it also makes people uneasy because of how much it might cost and who should pay.

With the world economy today experiencing turbulence on a number of diverse fronts, OECD countries are preoccupied with meeting these challenges.

German Chancellor Angela Merkel will address the first International Transport Forum on climate change and transport at Leipzig on 28-30 May.

The 2008 OECD Ministerial Council Meeting and Forum, the high points of the OECD calendar, could not be more timely. The issues we will be dealing with and the policy responses we will discuss should pave the way for a better world economy. Christine Lagarde, the minister of economy, finance and employment of France–the OECD’s host country–will chair the ministerial meeting.

Some 90% of world trade in tonnes is carried by ship, and containers represent 70% of total maritime trade by value. Per kilometre, shipping is one of the lowest emitting freight transport options around; at 10-15 grammes per tonne-kilometre, it is lower than rail (19-41g/tkm), trucking (51-91g/tkm) and aviation (673-867g/tkm). But the carbon footprint of the sector as a whole is as large as some major countries.

On a single busy day in the summer of 2007, 3.2 million people took to the skies above Europe in 33,000 flights which covered a total distance of 34 million km. That’s 42 billion passenger kilometres generated in just one day of European air traffic movements.

Impressive though these numbers appear, they are in fact expected to double shortly after 2025, assuming that the demand forecasts hold true and that the capacity issues across the European air traffic system are solved.

If CO₂ emissions from transport cause climate change, why not encourage more cycling? This is precisely what places like Brussels, Copenhagen, Vienna and Berlin are starting to do. One much talked about initiative is in Paris. As the home of cycling’s greatest race, the Tour de France, you would be forgiven for thinking the French always loved cycling. Yet until last year, cyclists and bicycle lanes were a rarity in the capital.

With aviation growing in terms of the number of planes operating and passengers taking to the skies, the industry is engaged in an important and candid dialogue—how to continue to grow responsibly, while further reducing its impact on the global ecosystem

The urgency of reducing fuel consumption rates while transport moves towards massive development over the next two decades, notably among developing economies, is clear. Any weapon counts as part of the overall package. Enter “ecodriving”.

Would adding US$1,500 to the price of a new car be enough to help halt climate change? That’s what US and EU experts broadly agree on as the average price tag for new technologies coming on stream to make cars more fuel-efficient and climate friendly. But what does that price tag entail?

As the UN called recently on the world’s governments in an “extraordinary emergency appeal” for some $500 million to avert a food crisis in poor countries, many people were placing some share of the blame squarely on strong demand for grains from the biofuel industry.

Transport is a major contributor to CO2 emissions. But can policymakers make a difference? We asked Anu Vehviläinen, Finland’s minister for transport, and chair of the first International Transport Forum in Leipzig in May 2008.

Any serious attempt to deal with climate change must involve transport. Transport accounts for 13% of all world greenhouse gas (GHG) emissions, though this figure takes into account CO₂ sources other than fuel combustion, such as forestry, land-use and biomass burning. A look at CO₂ emissions from fuel combustion only shows the transport sector accounts for about 23% worldwide and about 30% in the OECD area.

Real estate is an important strategic sector in most economies–just think of the links to construction or the importance of property in the investment portfolios of pension funds. But it is also vulnerable to abuse for money laundering and tax fraud.

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.

Europeans, particularly women, generally work fewer hours than their US counterparts. How does this difference help explain the transatlantic gap in incomes?

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”).