Post-2015 Agenda Summit and UN General Assembly
Side Panel: Coherent Policies for Sustainable and Low-Carbon Societies
Remarks by Angel Gurría,
New York, 25 September 2015
(As prepared for delivery)
Distinguished panellists, Ladies and Gentlemen,
I am very pleased to welcome you to this event on coherent policies for sustainable and low carbon societies co-hosted by the OECD and Korea.
Never before has it been clearer that sustainable development challenges affect us all. It is equally clear that the new 2030 Agenda for Sustainable Development cannot be achieved without addressing climate change.
We know that the adverse impacts of climate change are expected to slow growth and exacerbate poverty. An effective climate response is therefore not only an environmental necessity but an integral part of sustainable development.
For this reason, I am excited by the potential transformative power of the Sustainable Development Goals (SDGs). They are based on the recognition that a more integrated policymaking approach is needed to address the economic, social and environmental dimensions of sustainable development.
The key to the SDGs’ success will entail significant structural adjustments, and in particular the reduction of countries’ reliance on fossil fuels. Our dependence on coal, oil and gas is responsible for the majority of global greenhouse gas emissions. This dependence has fuelled global economic development for decades and influenced everything from the design of our homes, transport and cities, to the way we produce food and manufacture goods.
Fossil fuels still dominate the global energy supply, accounting for an aggregate share of 81%. Two-thirds of global energy investments still go into fossil fuels, and various tax provisions and subsidies encourage fossil fuel production and use. Our new study on support measures for fossil fuels finds that governments in OECD and the six of the biggest emerging economies are spending collectively up to USD 200 billion a year subsidising extraction, refining and combustion of fossil fuels. To give you some perspective, this represents more than we need to meet the climate-finance objectives set at Copenhagen in 2009, which called for mobilising 100 million US dollars a year by 2020.
Our recent report Taxing Energy Use shows that coal is usually the least heavily taxed of all fossil fuels. It is also generally subject to very low or no import tariffs – unlike renewables, which are often subject to import tariffs of 10-20% or higher. Yet, it is coal that emits the highest amount of CO2 in relation to the energy produced, from all fossil fuels.
The Sustainable Development Goal 7 (SDG7) calls on countries to “ensure access to affordable, reliable, sustainable and modern energy for all.” To achieve this goal, governments will need the right information to discard proposals that may be affordable but are neither modern nor sustainable. This is particularly important for developing countries, some of which have not previously generated power from coal, and which are in the process of building new infrastructure from scratch.
Getting the economic incentives right is vital. This means putting a big fat price on carbon and of course phasing out fossil fuel subsidies, as agreed by the G20.
A key priority will also be to encourage long-term private investment and lowering the cost of capital. Institutional investors manage USD 93 trillion in OECD countries alone; and government policies can play a central role in influencing how this private capital is mobilised and shifted.
In helping governments achieve these goals we need to ensure that our climate action and our sustainable development efforts are not undermined by other policy decisions. And this is where Policy Coherence for Sustainable Development (PCSD, as we call it) comes in.
It can provide the tools to capitalise on synergies between different sectors; among the SDGs and the targets. It can also inform decision-making for managing trade-offs and inconsistencies between policy objectives; consider trans-boundary and inter-generational impacts; and take into account enabling or disabling factors, as well as the role of different actors.
Earlier this year, we joined forces with the IEA, Nuclear Energy Agency and the International Transport Forum to produce the first economy-wide global diagnosis of the policy incoherences that hinder progress on climate.
Our recent report, Aligning Policies for a Low-carbon Economy, identifies misalignments with climate goals across policies, from electricity market regulation to land use. Governments now need to consider, given their respective national contexts, how to resolve these misalignments.
The report we are presenting today – Better Policies for Development 2015: Policy Coherence and Green Growth – puts the spotlight on the Post-2015 Development Agenda and shows that countries need to be able to work across policy domains to respond to the more complex and interrelated challenges addressed by the SDGs. A key lesson from the MDGs was that sustained change cannot be achieved through one-dimensional or single sector goals. A coherent strategy must ensure that the implementation of one goal reinforces (or at least does not undermine) the achievement of other goals.
The post-2015 framework have also brought measurements of sustainability to the forefront, requiring countries to identify synergies and trade-offs between economic, social and environmental objectives. The Report illustrates how OECD indicators, policy instruments and dialogue tools can contribute to an enhanced understanding of policy interactions and potential effects on human well-being.
Ladies and Gentlemen, we know that the transformation to a sustainable and climate-resilient path will not be without costs. But we also know that the economic, environmental and human cost of policy inaction will be much greater!
The OECD stands ready to support governments and the international community in the implementation of the SDGs through our multi-disciplinary approaches; our policy frameworks, tools, and dialogue platforms, to design, develop and deliver better policies for better lives.