Ministers' working dinner
Remarks by Angel Gurría,
20 October 2015
(As prepared for delivery)
Dear Ministers, Ladies and Gentlemen,
Minister Yanghee, thank you for your kind words, and for your skilled chairmanship of this Ministerial meeting. I am delighted to have the opportunity to address you this evening on the contribution of science and innovation to addressing climate change. With COP21 just around the corner, this issue is at the top of the global agenda, and rightly so.
Because we are on a collision course with nature.
Each of the last three decades has been successively warmer at the earth’s surface than any preceding decade since 1850. The World Health Organisation has estimated that between 2030 and 2050, climate change is expected to cause approximately 250,000 additional deaths per year. In many areas of the world, the humanitarian and environmental devastation is already being felt.
Governments have agreed to work together to hold the increase in global average temperature to below 2°C above pre-industrial levels. Yet, the world is currently on course for a global mean surface temperature increase of around 3-5°C by the end of the century.
To avoid climate catastrophe we have to achieve zero net emissions from the combustion of fossil fuels in the second half of this century. This won’t be easy, but COP21 is an opportunity for governments to clearly indicate how they will move to this zero net emissions future, consistent with the 2°C target.
Science underpins the global consensus on the need for action. New technologies and effective innovation policies will help spur low-carbon innovation, support the creation of new low-carbon business models, and help in phasing out polluting ones.
I’d like to share with you two areas in which the OECD is working to help countries deliver the green future our children and our grandchildren so desperately need.
Putting a price on carbon
Firstly, “we have to put a big fat price on carbon”. Innovations that can reduce emissions can come from anywhere. So we need many strings to our bow. The problem is that we don't always know which strings will work, and that makes the pricing of carbon essential. By targeting the "bad" in a neutral way, the pricing of carbon unleashes the creative forces in our economy - encouraging scientists, inventors, entrepreneurs, and others to find the least-cost ways to reduce emissions, some of which may be totally unexpected.
And with this must come an end to measures that support the production and consumption of fossil fuels. The OECD’s latest inventory of support to fossil fuels found that governments in the OECD and the BRIICS collectively support fossil fuels to the tune of 160 to 200 billion US dollars a year. That’s more than we need to meet the climate-finance objectives set at Copenhagen in 2009, which called for mobilising 100 billion US dollars a year by 2020. This simply does not pass, it’s time for a climate reality check!
Aligning policies for the low-carbon economy
But harnessing science and innovation to address climate change is not just about reshaping the incentives. It’s also about reshaping policies in coordinated ways, so all parts of the machine work together towards the common goal of reducing emissions. The recent OECD report, Aligning Policies for a Low-Carbon Economy points to a number of misalignments between existing policy frameworks and climate objectives, in areas such as finance, taxation, agriculture and trade, but also innovation and adaptation.
The report highlights that public budgets for energy research have not kept pace with the urgency of a transition in the energy sector. The share of energy R&D in total R&D has fallen from over 10% to less than 5% in the last four decades. Despite a remarkable growth in support to renewable energy sources and energy efficiency, the IEA has indicated that global government spending on energy RD&D should triple to match countries’ aspirations for low-carbon technologies.
At the level of firms, innovation rests on a competitive environment. Yet some science and technology policies still tend to favour incumbents rather than challengers, holding back the breakthrough innovations. For example, increased access to financing, and reform of the judicial system and product market regulations (PMRs) should work together to support an environment in which carbon-intensive incumbents are challenged by newcomers providing low-carbon alternatives.
Ministers, Ladies and Gentlemen:
These comments are just a snapshot of the challenge we face in the areas of science and innovation to move to a low-carbon economy. I have given just a few examples of the challenges we face in the areas of science and innovation. We have to face these challenges and deliver these solutions together. This is why meetings such as this one are so vital. Coordinated and collaborative international action is the only game in town.
And the time is ripe. Since the frustration of Copenhagen, it has taken six years to get back to the same level of focus. To use a suitably scientific and technological image, it’s a bit like landing the Rosetta probe on a comet, which took ten years to align. Windows for alignment are temporary – we haven’t time to wait for another one.