Concern that unilateral greenhouse gas emission reductions could foster carbon leakage and undermine the international competitiveness of domestic industry has led to growing calls for carbon-based border-tax adjustments (BTAs). This paper uses a global general equilibrium model to asses the economic effects of BTAs and comes to three main conclusions.
OECD Secretary-General Angel Gurría has welcomed the call by ministers in France, Germany and the UK for Europe to adopt a 30% reduction in greenhouse gas emissions over 1990 levels by 2020.
Many countries have pledged targets or actions to reduce greenhouse gas emissions in the Copenhagen Accord. New OECD analysis shows that these pledges go towards but are not ambitious enough to limit long-term temperature rise to 2°C. While not cheap, the costs of these pledges are limited compared to expected economic growth. Ambitious global action to mitigate greenhouse gas emissions is not only necessary, but also economically rational. Using market-based instruments to implement the pledges also has the potential to generate sizable fiscal revenues.
Careful phasing-out of fossil fuel subsidies can be a low-cost way to meet part of the targets announced following the U.N. climate conference in Copenhagen. According to new OECD analysis based on data from the International Energy Agency (IEA), ending fossil fuel subsidies could cut global greenhouse gas emissions by 10% from the levels they would otherwise reach in 2050 under “business as usual.”
Green growth provides opportunities for new green industries, jobs and technologies. The Interim Report of the Green Growth Strategy provides some first insights into how countries can achieve greener growth, and discusses what steps countries have already taken, as well as some of the barriers to transition. It also proposes a framework for green growth strategies to help ensure an efficient shift to more sustainable economies.
The data and a range of other indicators of the crisis and its aftermath can be found in the OECD’s Factbook 2010, an annual digest of economic, social and environmental statistics. The latest edition takes a special look at the causes and consequences of the crisis. The data also show how governments have been responding.
The OECD has recently held two international meetings on climate change issues. The Global Forum on a post-2012 climate framework focused on climate finance, capacity building, national climate strategies, and reporting under the UNFCCC. The Global Carbon Markets Workshop focused on new issues and players in carbon markets post-Copenhagen, and explored how countries can prepare for and navigate the current “patchwork” approach to carbon markets.
Making sure that materials are managed sustainably and used efficiently through their life-cycle is vital to economic growth, environmental quality and sustainable development. A shift from “end-of-life” thinking towards a more integrated life-cycle approach is urgently needed and will be discussed at the OECD Global Forum on Environment in October 2010 in Belgium: OECD and non-OECD governments as well as all actors in the materials life-cycle (i.e. business, NGOs, consumers) will meet to discuss coherent policy approaches for Sustainable Materials Management (SMM).
