Opening Remarks by Angel Gurría, OECD Secretary-General, delivered at the Global Forum on the Environment: New Perspectives on the Water-Energy-Food Nexus
27 November 2014, Paris, France
(As prepared for delivery)
Distinguished Guests, Ladies and Gentlemen,
It is my great pleasure to welcome you this morning to the OECD Global Forum on the Environment.
Many prominent speakers and participants are gathered here today from across the globe to advance towards a common goal: the joined-up management of the water-food-energy Nexus.
Since the Bonn conference on the Nexus in 2011, it has become clear that we cannot manage these most fundamental of resources in isolation. The case for adopting a coherent, Nexus-based, approach has grown stronger than ever.
Indeed, getting to grips with the Nexus will be essential to overcoming the greatest environmental, economic, and supply security challenges we face.
With that in mind, I congratulate the German government for putting this issue on the international agenda.
Why does the Nexus matter?
For anyone yet to be convinced on the Nexus – [and there are always some] – I say this: look into the future.
By 2050, the world’s population will have risen to 9 billion. By then, the demand for water will have risen by 55% and demand for food by 60%. And on top of this, a world economy that is four times larger than today could be using up to 80% more energy.
In such a world, increased resource demand will dictate that we look at the bigger picture. Yet today, sectoral plans in energy or agriculture are still often developed in isolation and fail to factor in water availability and competing demands for water and land. Such an approach does not work.
The OECD leading the way
At the OECD, we have been analysing the Nexus since the Bonn conference. Much of our work addresses the coherence of policies in sectors that affect resource demand and water availability.
The Environmental Outlook to 2050 highlighted the wider economic and social benefits of improved resource efficiency and land use.
In addition, the OECD’s report on Water Security for Better Lives highlighted the potential benefits of a coherent approach to water security. For instance, co-ordination on agricultural and water policy has helped Australia reduce its irrigation water application rate by nearly 60% since 1990.
Our forthcoming reports on Water Resources Allocation and Urban Water Management continue the focus on integrated solutions, highlighting the potential benefits of co-operation between cities and the rural environment.
Our new report Towards Green Growth in Southeast Asia stresses the importance of a coherent approach to food, water and energy. It highlights the case of Thailand, where shrimp farming has contributed to the destruction of between 50 and 60% of the mangroves that were providing vital coastal protection, increasing the likelihood of flooding.
Yet it also recognises that about 20% of Southeast Asia’s population is directly dependant on fisheries for their livelihoods, and an even larger share for protein intake. To prevent environmental disasters, ensure that jobs are not affected, and that diets are maintained, it will be essential to take a Nexus-based approach and manage fisheries in a sustainable way.
For our part, the OECD firmly believes that economic analysis adds value and helps to identify workable solutions to issues which arise from the Nexus. Acting now is not only environmentally rational, it is also economically rational.
That is why we have organised this Global Forum on the Environment. We want to create a platform for policy makers from developed and developing countries to share experiences and ideas with civil society and the corporate sector.
Taking a new perspective on the Nexus
This Global Forum is about taking a new perspective on the Nexus. To aid us in this task, we have identified four critical issues for this forum that have received insufficient international policy attention to date.
Let me briefly touch on each of these.
First, we will discuss the importance of mainstreaming the Nexus at national and sub-national levels. Un-coordinated policies on water, food and energy often exacerbate tensions between key players and sectors in the economy and lead to suboptimal outcomes.
Subsidised energy for farmers in India or in Mexico results in an increase in groundwater pumping, perpetuates inefficient water use in agriculture and can lead to power cuts.
In Spain, the combination of subsidised drip irrigation technologies and unsustainable water pricing has encouraged the establishment of new crop patterns focussed on more water intensive outputs. This change in technology has led to water wastage, groundwater depletion, pollution, soil salination and biodiversity loss.
A dedicated session on mainstreaming the Nexus at national and sub-national levels, later this morning, will give us the chance to consider the challenges and opportunities in greater detail.
The second issue we will tackle is the need for greater understanding of long-term trends and interactions, to better account for the Nexus in planning and policy making.
The OECD is at the fore of efforts to understand how failure to adopt a Nexus approach will hinder long-term economic growth and development. The CIRCLE project (“Costs of Inaction and Resource scarcity: Consequences for Long-term Economic growth”) models the biophysical impacts of socio-economic developments on land, water and energy, and their combined feedback on the economy.
The project has observed that the effects of climate change on annual global GDP are already starting to materialise. The most recent findings from CIRCLE suggest that by 2060, the effects of climate change could lead to a global GDP loss of 0.7% to 2.5%, depending on the temperature rise, with agricultural impacts dominating in most regions.
In this afternoon’s session, we will have the chance to discuss the reciprocal effects between the Nexus and long-term growth trends. We will also consider how policies aimed at addressing the Nexus can help promote growth! The third issue that we will explore during the forum is the need to set the right incentives for investment and finance.
Through the OECD’s pioneering work on the reform of fossil-fuel subsidies, we have established that action to eliminate inefficient support of fossil fuels can contribute to fiscal objectives, whilst supporting efforts to mitigate climate change. In this regard, we highly welcomed Indonesia’s President Widodo’s recent announcement to cut fuel subsidies, combined with new measures to support low-income households.
This provokes the question: should we be doing more to monitor government support for water?
In a session tomorrow, public and private financiers will be sharing their experiences of factoring the Nexus into investment decisions. This will give us first-hand insight into adapting incentives to achieve better environmental and economic outcomes. A fourth and final issue for this forum is the question of how the Nexus can contribute to the Post-2015 Development Agenda, and be linked with the dedicated goal on water.
Sound management of the Nexus is essential in developing countries, where dependence upon natural resources is high for supporting efforts to eradicate poverty and promote development.
We currently have proposed Post-2015 goals for water, energy, food security, and even climate.
A key question for this Forum and for forthcoming UN discussions is: how can we frame these goals in a way that adequately reflects the inter-dependencies across these sectors? The final session tomorrow afternoon will give us chance to explore these issues.
Ladies and Gentlemen,
Your participation over these two days will make an invaluable contribution to framing the Nexus.
The outcomes of your discussions will be reflected in a document that will feed into further international discussions, at the 7th World Water Forum in Korea in April 2015, and in the context of the post-2015 Development Agenda.
The bolder you are, the more impact you can have on these processes to better manage our natural resources and make growth greener.