Ministers' roundtable on climate change
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.
The packed agenda will include wide-ranging discussions of environmental trends and projections, global co-operation, eco-innovation and more. But climate change and the economy will no doubt be foremost on ministers’ minds.
In our sixth OECD Observer ministers’ roundtable, we ask ministers from a cross-section of OECD countries to answer the following question:
“What action is your government taking to fight climate change, while at the same time ensuring economic competitiveness?”
Their answers show that progress is possible, though much remains to be done, particularly in the global sphere.
Alfonso Pecoraro Scanio, Minister for the Environment and Chair of the
2008 OECD Meeting of Environment Ministers
Climate change and global warming result from human activities, in particular those producing greenhouse gases. On this point, the scientific evidence is unequivocal and authoritative. Furthermore, recent studies and reports on the economics of climate change (the Stern Review, the OECD Environmental Outlook, among others) warn us about the huge financial costs that inaction would imply in the long run for the global economy and the enormous effort that would be required to correct the consequences.
Public awareness of the risks from climate change and pollution, as well as the need for global sustainable development, make deep reform of the whole productive process inevitable for safeguarding competitiveness. Apart from national and international policies and public incentives and disincentives aiming to mitigate climate change, private firms have to cater to consumer choices, which are increasingly oriented to environmentallyfriendly products.
The Italian policy in combating climate change is based on five main pillars:
A deep reform of the energy production system and its development based on reduced emissions impact, through the re-orientation of the energy mix towards lower carbon production. We have implemented a market-based incentive system for renewable energy through the introduction of a mechanism based on the trade of “green certificates”; and are strengthening the incentives for renewable sources, mainly by increasing support for photovoltaic energy production.
Efficiency in the transport sector and increasing sustainable urban mobility.
Energy efficiency for new and restored buildings, including public ones; and introducing minimum performance requirements for domestic, office and industrial appliances.
Biodiversity conservation, fighting against desertification, stimulating local community development and promoting sustainable forest management.
Environmental education to raise public awareness about climate change and responsible energy consumption, and boosting green procurement, starting with public administration and extending to the private sector.
These present and future measures are intended as the Italian contribution to the EU policy on climate change, which set ambitious targets on GHG emissions reduction and increasing share of renewable energy, including sustainable biofuels.
There is a crucial role to play at the local level too: local authorities are responsible for sectors largely contributing to the rise of the level of GHG emissions, and have a wide margin of autonomy for action. They can achieve significant outcomes in terms of environmental sustainability, including through the local Agenda 21 process. The Italian Ministry of the Environment, following a proposal from the UN Department of Economic and Social Affairs, will organise the “World Forum on Implementation of Local Agenda 21 and Local Action on Climate Change” in Italy in late 2008.
This initiative will bring representatives together from the 6,000 local authorities around the world. It will be a unique opportunity to address the issues surrounding climate change and clean energy, with a focus on innovation and competitiveness. The World Forum’s goal will be to forge a concrete agreement for sustainability between national governments, local authorities and the private sector, based on Agenda 21 and best practices already being implemented by local authorities to achieve the Kyoto objectives.
Towards fossil independence
Connie Hedegaard, Minister for Climate and Energy
Denmark is Europe’s frontrunner in sustainable development. Our experience shows that it is possible to boost economic growth and, at the same time, reduce dependency on fossil fuels and safeguard the environment.
During the past 25 years, Denmark’s economy has grown by 75%, with nearly stable energy consumption. Our emissions of greenhouse gases were reduced by 16%. And this is only the beginning. Our longterm objective is to become totally independent of fossil fuels.
Recently, a broad majority of the political parties in the Danish Parliament entered into a new agreement on energy policy.
First of all, renewable energy shall contribute with a steadily growing share of our energy supply. The present share of 15% shall increase to 20% by 2011 and at least 30% by 2025. Part of the new agreement is to establish two additional offshore wind farms, more landbased wind turbines, and a further increase in biomassbased electricity and heat production.
Secondly, energy consumption shall be reduced and energy efficiency increased. The Energy Policy Agreement of 21 February 2008 states that gross energy consumption must be reduced by 2% in 2011 and by 4% in 2020. One way to achieve this is with more energy-efficient buildings, e.g. new houses must consume only a quarter of today’s energy by 2020. And energy-saving targets are being imposed on all energy companies in order to reduce consumption of electricity, heat and gas.
I believe these ambitious policies will pave the way towards increased sustainability, both in terms of climate change mitigation and in terms of security of supply. We must reduce dependence on fossil energy from politically unpredictable regions, and secure our economies against permanently high fossil energy prices.
It is time to act, and we need internationally concerted action. The technologies are available and the policy options are ready. I believe that every responsible nation must decide nationally and act globally.
Leading a low-carbon shift
Jean-Louis Borloo, Minister for Ecology, Energy, Sustainable Development and Regional Planning
The determined action taken by France after the first oil crises has enabled it to become one of the lowest-carbon industrial economies there is, with per capita greenhouse gas emissions that are 25% lower than the European average and 30-40% lower than those of its large neighbours. Major investments have been made to develop electricity production that is 90% CO2 emission free. France’s vehicle fleet also has one of the lowest emission rates in Europe.
The rising price of fossil fuels and climate change require us to make a major shift in our energy policies towards two priorities: improving energy efficiency and using much more renewable energy. These two priorities were the focus of the Grenelle Environment Forum presented by the French president in October 2007, following broadbased consultations. They provide great economic opportunities for our country.
Some of the action plan’s measures, such as the “ecological bonus” awarded for cleaner cars, have already been successfully introduced and behaviour is starting to change. France is also promoting economically efficient measures such as market-based instruments, like CO2 quotas since 2005, or energy-saving certificates since 2006. Lastly, energy performance regulations have been extended to work carried out in existing buildings. The target of a 30-40% reduction in per-unit consumption by 2020 opens great prospects for the construction sector.
The risks that France will frequently face are being taken into account in a structural way by various measures, in particular land-use planning and adaptation initiatives.
France is on the way to keeping its commitments made under Annex I of the Kyoto Protocol. Although the Protocol only began to be implemented on 1 January 2008, France is one of the few industrial countries whose emissions are already below the level of its international commitment–its 2006 emissions were approximately 4% lower than the ceiling set by the Kyoto Protocol for the 2008-2012 period.
All of the measures from the Grenelle Environment Forum will enable France to comply with the European target of a 20% reduction in greenhouse gas emissions by 2020.
Building a common vision
Ichiro Kamoshita, Minister for the Environment
Japan is a relatively small country with a dense population and a high concentration of economic activities. We depend on imports for our energy and resources. Our country has suffered from severe environmental pollution, as well as oil price surges. Given these circumstances, Japan has made every effort to improve energy efficiency and environmental quality for decades. I believe that technology development and the long-standing support of citizens are the main driving forces in the fight against climate change.
Let me emphasise three points. First, implementing environmental policies and ensuring the development of climate-friendly technology and its eventual deployment are essential for both climate protection and economic progress. As Prime Minister Fukuda highlighted in a keynote speech to Davos this year, Japan advocates peaking global GHG emissions in 10-20 years, towards halving them by 2050.
Secondly, a sectoral approach can be a powerful tool for economic competitiveness, as OECD research suggests. Evaluating mitigation potential objectively is indispensable for a global consensus, and a sectoral approach can greatly help. Japan will fully explore this approach with other countries, premised on the Climate Change Convention’s principle of “common but differentiated responsibility and respective capabilities”.
Thirdly, we must recognise the high costs of inaction. Environmental costs can be avoided if we take preventive action, as we learned from our unfortunate experience with the mercury-induced Minamata disease. Moreover, investment in environmental protection actually helps to improve our economic competitiveness, as demonstrated by better motor vehicle performance following our stricter emissions regulations. Economic instruments, such as a carbon trading system, are also important for costeffective emissions reductions. Finally, we must not forget that policies addressing climate change can alleviate other environmental problems such as air pollution.
To attain long-term global goals, we need a common vision. Without one, we will neither develop the right strategies nor the right cleaner technologies. Japan has been working with the UK on developing a vision towards a low-carbon society. Our time is very limited. We must all move forward now to achieve a vision that we would be proud to pass on to future generations.
Visit the Japanese Ministry of the Environment at www.env.go.jp/en/.
Juan Elvira Quesada, Secretary of Environment and Natural Resources
Climate change is one of the biggest challenges faced by the international community in the 21st century. Addressing it demands innovative policies and political will at the highest level. The multilateral sphere, under the UN, should be the leading venue for global commitment. Organisations such as the OECD have a complementary role to play in policy advice and consensus building.
Mexico’s response to climate change includes a commitment to designing and implementing cost-effective policy instruments which foster economic competitiveness and development, while preventing environmental degradation.
Strategic planning is essential for crafting a sound policy framework. In this regard, we presented our National Strategy on Climate Change in 2007 and will release our National Programme on Climate Change this summer. These establish the foundations for our climate policy, comprising cost-effective mitigation and adaptation measures for implementation in 2008-2012.
Implementing effective climate change policy requires accurate information, the strengthening of national capacities and establishing solid mechanisms for ensuring a coordinated response. National capacities and information systems will continue to improve as we draw up our 4th National Communication on climate change to the UNFCCC. Institutional architecture has also been strengthened through the establishment of an Interministerial Commission on Climate Change, a policy co-ordinating body involving seven federal ministries.
While governments should play a leading role in addressing climate change, competitiveness can only be secured by engaging the private sector in cost-effective mitigation. In Mexico, this engagement has been fostered through the creation of a climate change office, responsible for the promotion of projects to be included under the Clean Development Mechanism and other international schemes. We have also established the Mexican Carbon Fund (FOMECAR), an instrument which provides national companies and public entities with technical and financial support to facilitate their involvement in carbon markets.
We encourage the participation of industry in voluntary efforts to report emissions and improve carbon markets. Indeed, since 2004 several Mexican companies have adopted the Greenhouse Gas (GHG) Protocol Programme to calculate their own emissions, report them in a transparent manner and identify GHG reduction opportunities.
©OECD Observer No 266 March 2008
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