How COVID-19 could help eliminate fossil fuel subsidies

Building-better-covid19-banner

By Mario Pezzini, Director of the OECD Development Centre and special adviser to the OECD Secretary-General on development, and Håvard Halland, Senior Economist at the OECD Development Centre


This blog is part of a series on tackling COVID-19 in developing countries. Visit the OECD dedicated page to access the OECD’s data, analysis and recommendations on the health, economic, financial and societal impacts of COVID-19 worldwide.


Oil pumpjacks in Tatarstan, Russia
Photo: Yegor Aleyev/Tass/PA Images

As oil-exporting countries struggle to respond to the crisis, there is a way to make critical fiscal resources available.

The Covid-19 pandemic has hit oil-exporting countries at the worst possible moment. Severely strained health systems, and the need for economic stimulus, call for unprecedented growth in public spending. At the same time, oil export revenues have plummeted, following the demand collapse caused by the pandemic and a breakdown of traditional price-setting mechanisms. As a result, many oil exporters in the low- and middle-income category will struggle to muster anything near the level of expenditure required for an efficient response to the virus. Continue reading

A new approach to the intractable problem of climate change

By François Candelon, Managing Director and Senior Partner at BCG Paris, and the Global Director of the BCG Henderson Institute, Rodolphe Charme di Carlo, Principal at BCG Paris, and Ambassador at the BCG Henderson Institute, and Yves Morieux, Managing Director and Senior Partner at BCG Middle East, BCG Fellow, and head of BCG Institute for Organization


This blog is part of a series on tackling COVID-19 in developing countries. Visit the OECD dedicated page to access the OECD’s data, analysis and recommendations on the health, economic, financial and societal impacts of COVID-19 worldwide.


climate-change-covid-19COVID-19 is climate on warp speed” said Gernot Wagner, climate economist at NYU. Both trends show exponential growth – in infected people and CO2 emissions respectively – while capacity to fight them remains limited. Still, while governments enforce emergency measures around the globe, little action on climate has happened to date. Therefore, the actual question to solve is not “what can we do?” but rather “why not now?”

Bringing an alternative and rigorously structured approach can help to find practical, impactful solutions. The concept of Smart Simplicity, applying principles of sociology to solving complex organisational problems in business and beyond, can play this role by analysing inaction from two angles. First, the systemic lens – stemming from Thomas Schelling’s work – assesses how individual behaviours combine to produce collective outcomes that cannot directly be traced back to individual motives. Second, the strategic lens, legacy of Herbert Simon’s “bounded rationality”, analyses individual behaviours within the context of problems they try to solve, with resources to mobilise and constraints to cope with. Continue reading

Time for bold initiatives to tackle inequalities and climate change

By Filippos Pierros, Minister-Counsellor, Vice-Chair of the Development Assistance Committee and the Development Centre Governing Board [i]

Green-deal-climate-change

With the resounding failure of the UN COPs to mobilize a strong international response to climate change and inequality, concerned citizens around the world are rightly beginning to show frustration and even anger. And yet, at long last on the final year before the turn of the decade, a major high-income donor of international aid publicly proclaimed it would step up to the plate and propose radical change.

The new EU Commission promised to bring to the floor a “European Green Deal” that will drastically transform the very foundations of the EU economy. The green deal has clear implications for fighting inequalities, as well as for development. The “EU can use its influence, expertise and financial resources to mobilize its neighbors and partners to join it on a sustainable path.” The EU announces a strong “green deal diplomacy” focused on supporting sustainable development globally, engaging countries to end fossil fuel subsidies, phasing out fossil-fuel based infrastructure, investing in climate finance and climate resilience, promoting green regulations, and creating an international carbon market to provide reform incentives. Continue reading

Why should investors care about ocean health?

by Dennis Fritsch, PhD, Researcher, Responsible Investor


This blog is part of the
OECD Private Finance for Sustainable Development Conference


Ocean health

“The World’s Oceans Are in Trouble. And So Are Humans, Warns U.N. Report” – a blaring headline in Time Magazine just after the IPCC published their landmark report Oceans and the Cryosphere in September 2019. It highlights what scientists and NGOs have been shouting from the rooftops for years: human activity has put the global ocean in a dire state and by doing so is endangering planetary life as we know it. But how has it come this far? In addition to producing over half of the oxygen we breathe, being the largest carbon sink on the planet and a haven for biodiversity, a healthy ocean is a source of economic livelihoods for billions of people. The value of global ocean assets is estimated at over USD 24 trillion[1] making it the 7th largest economy in the world in GDP terms. Due to its integral role in the global financial and environmental ecosystems, the ocean is high on the international policy agenda[2] and its importance continues to grow. The global ‘Blue Economy’ is expected to expand at twice the rate of the mainstream economy until 2030[3], and already contributes USD 2.5 trillion a year in economic output. Continue reading

Forging a new way forward for development co-operation in the face of the climate crisis

By Jorge Moreira da Silva, Director, OECD Development Co-operation Directorate

climate-change

Time is running out. The climate crisis is rapidly altering the systems that underpin life on Earth, multiplying existing threats to development while creating new obstacles. It will influence how countries develop for the rest of this century and beyond. As we head into 2020 — when countries will prepare and submit their next round of commitments under the Paris Agreement to commence its implementation — it is timely to check in on progress so far. Specifically, how donor countries and providers of development co-operation are accounting for climate change and aligning their activities with the objectives of the Agreement to ensure they are not supporting unsustainable development.

The climate crisis is affecting communities across the globe, most recently contributing to catastrophic bushfires in multiple states of Australia.  At the same time in the central and southern parts of Mozambique, at least 1.6 million people are in need of assistance due to the devastating effects of the ongoing drought and increasingly severe weather events linked to climate change. These event have been unfolding just months after disastrous fires in the Amazon, underscoring that we are indeed living in a new normal. Amid these events, at the 2019 United Nations (UN) Climate Action Summit in New York this past September, the OECD brought together over 30 climate and development leaders to urgently discuss the imperative to align the development and climate agendas, reflecting on key messages and priorities for the institutions that provide development co-operation. Continue reading

Can local and sustainable agriculture save biodiversity?

By Marco Maria Cerbo, Chargé d’Affaires a.i. at the Permanent Delegation of Italy to the international organisations in Paris, and Rebecca Graziosi, development co-operation intern

sustainable-agriculture.jpgDuring his speech at the Nobel Banquet, the newly-awarded laureate in Economic Sciences, William D. Nordhaus, declared: “Over the last half-century, the full implications of climate change and its impacts have been illuminated by the intensive research of scientists in different fields. These studies depict an increasingly dire picture of our future under uncontrolled climate change. […] Now, it is up to those who represent us, our elected leaders, to act responsibly to implement durable and effective solutions.”

Data can hardly deny this statement and our planet is now facing an unprecedented emergency. Globally, there is widely-cited evidence that the extinction rate of animal and plant species, as high as 1 000 times the background rate, is increasing rapidly as a result of human activities. In particular, biodiversity in farmland is diminishing, with effects on all of the ecosystem services that are essential to agriculture, including pest control, pollination and climate regulation. Pollution, climate change, over-exploitation of natural resources and changes in land use are the main drivers of biodiversity loss and are clearly related to human activities. Biodiversity is one of the most important legacies we can leave to future generations and its anthropogenic destruction requires urgent action by policy makers and a re-thinking of economic activities. Continue reading

Strengthening development in the face of the climate crisis and environmental degradation

By Jorge Moreira da Silva, Director, OECD Development Co-operation Directorate and Andrew Norton, Director, International Institute for Environment and Development (IIED)

Amazon-fire-climate-change
Aftermath of a Brazilian Amazon fire

The climate emergency and broader environmental destruction — from forest devastation to loss of biodiversity to depleted water supplies — are challenging international aid agencies’ collective ability to support sustainable development.

Despite awareness of these growing pressures, these issues are often peripheral to how development agencies work. True, most members of the OECD Development Assistance Committee (DAC) have adopted environmental safeguards and are refocusing some of their actions on tackling the climate crisis. Too often, however, development agencies overlook other pressing environmental problems, such as sustainable management of forests, land and water, and related health issues such as sanitation, indoor air pollution and urban slum improvements.  In short, agencies have yet to fully integrate environmental concerns ― including climate change ― in their policies, plans, budgets and actions.

But how? The DAC examined the practices of its members — focusing on the European Union, Sweden and Canada — with support from the International Institute for Environment and Development (IIED), and identified five steps that agencies should adopt if they want to effectively tackle critical environmental challenges and threats: Continue reading

The Green Eureka Moment: Investing and Inventing to Stop Climate Change

By Raluca Anisie, Carbon Impact Analyst and Paul Hailey, Head of Impact, responsAbility Investments AG

bakery-ecuador
A family bakery in Ecuador that used a green loan from a GCPF investee to buy a more energy-efficient oven. Photo: José Jacomo

In the 3rd century B.C., Archimedes declared: “Give me a place to stand and with a lever I will move the world.” This phrase speaks to the potential of the right tools at the right time, but as anyone who has tried to build flatpack furniture will confirm, not having the right tools can derail any project, however grand.

In 2019, our quest to find and use the right tools to move the world is more urgent than ever. As UNEP stated at COP24, we are the last generation that can stop climate change. This challenge requires a mobilisation of investment on an unprecedented scale, yet enormous gaps remain, especially in the developing world. Filling these gaps will require ground-breaking investment approaches like blended finance, a method that uses public money to improve the risk profile of investments to catalyse private funding. However, tools such as blended products will also need to credibly demonstrate impact to attract and retain public and private investors. Continue reading

The Global South’s contribution to the climate crisis – and its potential solutions

By Harald Fuhr, Professor of International Politics at the University of Potsdam, Germany

DEVELOPMENT-MATTERS-emissionsGlobal CO2 emissions in 2017 totalled some 36.2 gigatonnes (Gt), of which the Global South1 emitted some 21 Gt CO2 or 58%. In the same year, the Global North (including Russia) emitted some 13.7 Gt and contributed to some 38% of global emissions. The remaining 4% are mostly emissions from shipping and aviation (international bunkers).

CO2 emissions in the Global South are heavily concentrated. The top 10 countries of the South contribute some 78% of the group’s emissions (see Table 1). With some 9.8 Gt CO2, China is by far the world’s biggest emitter. In 2017, it emitted more than the US (5.3 Gt CO2) and the EU-28 (3.5 Gt CO2) combined. Just two countries, China and India, are responsible for almost 60% of the Global South’s emissions, followed by other countries in the range of only 2-3% each. In 2017, 56 upper middle-income countries contributed to 46% of global emissions, while 34 low-income countries, most of them in Sub-Sahara Africa, contributed to only 1% of the total. Despite the fact that the latter group hardly contributes to global warming, its countries are likely to be the ones most severely affected by extreme weather events.
Continue reading

Bold steps to address the global pollution crisis

By Rich Fuller, President, Pure Earth, and Founder, Global Alliance on Health and Pollution

sahel-burkina-faso-women-pixabay
Image by Yogendra Singh/Pixabay

A sense of urgency for action against pollution is building. Air pollution and climate agendas both acknowledge the immediate threat to human health and longer-term changes to the planet’s habitability. Uncontrolled industrial pollution in some lower middle-income countries is visible worldwide, and citizens in numerous cities, each experiencing versions of “airpocalypses”, fear for their children’s health and are demanding change. Corporate leaders are responding to demands from board members and consumers for clean supply chains and the development of toxic chemical “footprint” metrics. Pollution is a threat to biodiversity, and air pollution contributes to noncommunicable diseases (NCDs). Such growing public and political attention provides an opportunity for collaborative action to improve health and grow economies.

Continue reading