Opening Remarks by Angel Gurría, OECD Secretary-General, delivered at the G20 Green Growth Seminar
22 May 2012
(As prepared for delivery)
Distinguished Ministers, Ladies and Gentlemen:
It is my pleasure to welcome you to the OECD for the Green Growth Seminar that we are organising with the Mexican G20 Presidency.
These are challenging times for the global economy. With many countries struggling with growth, stretched public finances and high levels of unemployment, it is not easy to keep environmental protection and conservation of natural resources at the top of policy makers’ priorities.
But recessions do not last forever. Recoveries take hold. There is life after debt.
The critical issue is what sort of growth follows from this recession. It can be greener or browner. In times of economic crisis our societies are tempted by recourse to short-termism. But the OECD Environmental Outlook to 2050, released last month provides a glimpse of what a world without policy changes would look like:
- a 50% increase in greenhouse gas emissions by 2050, with a disastrous impact on the quality of life of people worldwide,
- a doubling of premature deaths from exposure to particulate air pollution,
- 2.3 billion more people living in severely water-stressed areas, bringing the total to about 40% of the world’s population, and
- a further 10% decline in global terrestrial biodiversity.
The costs and consequences of inaction would be colossal, in economic, environmental and human terms.
The truth is that changing our model of growth and making it greener and more inclusive is the only credible strategy that we have. And it is a practical and concrete approach that can help countries move towards more sustainable development.
Green growth policies can unlock opportunities for economic growth through a number of channels: by contributing to fiscal consolidation, by enhancing productivity through greater efficiency in the use of natural resources, by opening up new markets for green technologies, goods and services. At the same time green growth policies can help ensure that our natural assets continue to provide critical resources and services on which our well-being relies.
I therefore welcome the leadership shown by the Mexican Presidency in making green growth such a signature priority for the G20. Green growth can help put economic recovery on a more sustainable path, which is a shared concern for all G20 countries. It is therefore very much an integral part of the G20 structural reform agenda and we are delighted to have with us today Secretary Meade of Mexico, who has been leading this effort in the G20 Finance Track.
The G20 is a key forum in which advanced and emerging economies can collaborate to stimulate private investment in green infrastructure, coordinate effective labour market policies to facilitate reallocation of workers to greener jobs, and enhance capacity for greening growth and development in the least developed and other developing countries.
These are all areas where the G20 has advanced work under the Mexican Presidency, and the OECD is pleased to have contributed to these streams of work. As we approach the Leaders’ Summit, a key issue is how the G20 can carry forward this work. I hope today’s seminar will provide valuable recommendations that can be taken forward to Los Cabos.
Just yesterday the OECD presented a joint report with the World Bank and the UN to the G20 Energy and Commodity Markets group on integrating green growth and sustainable development into structural reforms. G20 countries actively contributed to this undertaking through self-reporting on their green growth and sustainable development policies.
In our report, we outline a broad toolkit of green growth policies which countries can draw on in developing their own nationally-specific approaches.
Let me briefly highlight the two broad sets of policies that will be essential elements in most green growth strategies:
- The first set consists of broad framework policies that mutually reinforce economic growth and the environment. These include core fiscal and regulatory settings such as tax, competition and innovation policies. If they are well designed and executed, these policies maximise the efficient allocation of resources and produce incentives for a more sustainable pattern of consumption and production. They also include policies aimed at improving the ability of labour markets to swiftly reallocate human resources to less polluting activities, supporting workers’ incomes and skill formation in the transition. These are the conventional tools of economic policy; they can be good for the environment as well as for the economy.
- The second set includes policies providing incentives to use natural resources efficiently and making pollution more expensive. In other words: getting the prices right. These policies include a mix of price-based instruments, for instance environmentally related taxes, as well as non-market instruments, such as regulations, technology support policies and information-based approaches to help shift consumer behaviour. An essential element of these policies is the phasing-out of inefficient and environmentally harmful subsidies, an issue that is already well developed on the G20 agenda.
At the same time, we need to ensure a smooth and just transition. We need to address any unintended distributional consequences through targeted compensatory measures, especially to low-income households. Taking distributional concerns into account will also help deal with the sometimes daunting political economy challenges of shifting towards greener growth.
Ladies and gentlemen,
These are all issues we will be discussing during the course of the day today with a truly impressive set of speakers.
It is my great pleasure to give the floor to Mr. José Antonio Meade, Secretary of Finance and Public Credit of Mexico.