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Contribution | Doc. 12019 | 18 September 2009
The activities of the Organisation for Economic Co-operation and Development (OECD) in 2008-2009
(Former) Committee on the Environment, Agriculture and Local and Regional Affairs
1. Introduction
1. The Committee on the Environment,
Agriculture and Local and Regional Affairs congratulates both the rapporteur,
Ms Lilliehöök, and the Committee on Economic Affairs and Development
on this excellent report, which it fully supports. Although the
inextricable link between climate change, environmental protection
and the world’s economy is clearly underlined, we feel that even
more emphasis should be placed today on the consequences for the
economy of climate change.
2. Explanatory memorandum
2. According to Lord Stern’s review,
climate change is an economic externality, and addressing this externality
should compel the market to develop low-carbon technologies. The
report concludes that mitigation, that is addressing the issue now,
is the best economic option and that the ethics of the issue cannot
be ignored, or even dealt with separately.
3. Indeed, the benefits of strong, early action on climate change
considerably outweigh the costs. If 1% of global gross domestic
product (GDP) were invested each year, the worst effects of climate
change could be avoided. Failure to do so could risk bringing global
GDP as much as 20% lower than it otherwise might have been. The
figure was increased from 1% to 2% in 2008, as it had been observed
that climate change was occurring faster than had been expected.
4. Climate change presents a unique challenge for economics.
Lord Stern’s review provides prescriptions, including environmental
taxes to minimise economic and social disruption. It states, "our
actions over the coming few decades could create risks of major
disruption to economic and social activity, later in this century and
in the next, on a scale similar to those associated with the great
wars and the economic depression of the first half of the 20th century.
And it will be difficult or impossible to reverse these changes.
Tackling climate change is the pro-growth strategy for the longer
term and it can be done in a way that does not cap the aspirations
for growth of rich or poor countries".
5. Action must include mitigation, innovation and adaptation.
There are many opportunities to start now, including some with immediate
benefits and others where large-scale pilot programmes will generate
valuable experience. And we have already begun to create the institutions
to underpin co-operation. The challenge is to broaden and deepen
participation across all the relevant dimensions of action – including
co-operation to set prices and create markets for carbon, to accelerate
innovation and the deployment of low-carbon technologies and to
help poor countries adapt to the worst effects of climate change.
6. There are means of reducing the risks of climate change. With
the right incentives, the private sector will respond and can deliver
solutions. The stabilisation of greenhouse gas concentrations in
the atmosphere is feasible, at a significant but manageable cost.
7. Encouragement must be given to change investment patterns,
and the global economy must be moved onto a low-carbon path. There
is no shortage of means, but they must go hand-in-hand with increased
action to adapt to the effects of the climate change that can no
longer be avoided.
8. Above all, reducing the risks of climate change requires collective
action. It requires co-operation between countries, through international
frameworks that support the achievement of shared goals. This requires
a partnership between the public and private sector, working with
civil society and with individuals. It is still possible to avoid
the worst effects of climate change; but it requires strong and
very urgent collective action. Delay would be costly and dangerous.
9. As parliamentarians, as political deciders, it is very much
our responsibility to play a part in these efforts.
10. With more specific reference to the consequences of the economic
crisis for the environment, and in view of its magnitude and scope,
the world will no doubt experience a significant economic downturn
– of what degree and duration, no one can say – profoundly affecting
all aspects of international society. Our lifestyles will be greatly
affected by the downturn, as will the environment in particular,
which is closely tied to the pace of resource consumption. Significant
efforts to slow environmental decline will prove very expensive
and be out of reach for already tightly-stretched budgets. The question
thus arises: will the crisis be bad for the environment or not,
and what will its effects be on global warming in particular?
11. Prior to the crisis, the steady growth in the world economy
– much of it driven by phenomenal economic expansion in China, India,
and other nations – was producing a corresponding increase in demand
for energy in all its forms, especially fossil fuels. According
to certain pre-crisis projections, combined energy consumption by
all nations of the world was expected to grow by 22% between 2005
and 2015. Most (almost 90%) of this increase was expected to come
from fossil fuels – oil, coal, and natural gas.
12. The result was a proportionate projected increase in emissions
of CO2. Total CO2 emissions
worldwide were expected to increase by 22% between 2005 and 2015.
Such an increase in greenhouse gas emissions would have frightening
consequences, hastening global climate change resulting in persistent
droughts, increased storm activity and a significant rise in sea
levels.
13. Due to the rising price of oil, many governments and energy
firms announced plans to spend vast sums on the development of climate-friendly
alternative fuels and on greater use of wind and solar power.
14. The current economic hard times have caused some people to
drive less (and prefer public transport), fly less often and otherwise
consume less energy, thus reducing the level of expected greenhouse
gas emissions. However, as oil consumption declined, its price also
dropped – thereby discouraging investment in innovative energy projects.
Many energy consumers returned to their previous bad habits. For
example, many drivers are once again engaging in the wasteful driving
habits they had given up when the price of petrol soared.
15. It is not only energy consumption which has decreased, but
also consumption as a whole. Sales of electrical appliances have
fallen, and households are tending to use for a second or third
time some of the products that they would previously have thrown
away after a single use, and so on. This tendency is confirmed by
an overall reduction in quantities of household waste.
16. Other aspects of the economic crisis may also have positive
effects on the environment: the slowdown in the property sector
means that infrastructure projects affecting natural ecosystems
may come to be considered unprofitable, and the fall in the prices
of raw materials has eased the pressure on forests.
17. On 25 June 2009, the OECD Council at Ministerial Level adopted
a "Declaration on Green Growth" emphasising that “green” and “growth”
can go hand-in-hand”, and inviting the OECD to draw up a Green Growth
Strategy in order to achieve economic recovery and environmentally
and socially sustainable economic growth.
3. Conclusions
18. It remains unclear at this
point what impact the economic crisis will have on the environment.
In the short term, it certainly might slow the increase in CO2 emissions,
but any significant delay in the development of energy alternatives
could cancel out these benefits. There is a risk of the crisis resulting
in environmental concerns being forgotten, as happened at the time
of the first oil crisis, in 1973.
4. Amendment proposed by the committee
19. The Committee on the Environment,
Agriculture and Local and Regional Affairs proposes that the following
paragraph be added to the preliminary draft resolution put forward
by the Committee on Economic Affairs and Development:
"The Assembly expresses its concern about the effects of the economic crisis on the environment in general, and invites States to continue their efforts to reduce the risks resulting from climate change and to ensure that the development of renewable energies is not neglected for economic reasons. It takes this opportunity to welcome the adoption, at the meeting of the OECD Council at Ministerial Level on 25 June 2009, of the "Declaration on Green Growth", which invites the OECD to draw up a strategy in order to achieve economic recovery and environmentally and socially sustainable economic growth.".
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Reporting Committee: Committee on Economic Affairs and Development (Doc. 11985)
Committee for contribution: Committee on the Environment, Agriculture and Local and Regional Affairs
Reference to committee: standing mandate
Contribution approved by the committee on 4 September 2009
Secretaries to the committee: Mrs Agnès Nollinger, Mr Bogdan Torcătoriu and Mrs Dana Karanjac