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Encouraging the efficient and sustainable use of natural resources: policy instruments and social acceptability

Overview of the GG-SD Forum  l  Session summary  l   Background material l  Presentations and statements

Date: 23rd November 2012

The first Green Growth and Sustainable Development Forum (GG-SD Forum), which took place on 23 November, was attended by approximately 250 participants, including representatives from ministries of finance, economics, environment, development cooperation, sciences, industry and technology, and foreign affairs, as well as  from other international organisations, the private sector and civil society. The Forum welcomed representatives from Cambodia, China, Costa Rica, Ethiopia, Indonesia, Kazakhstan, Mongolia, Philippines, Russia, Sierra Leone and South Africa . A full day discussion took place on how to encourage a more efficient and sustainable use of natural resources, looking at the implications for advanced, emerging and developing countries. Stakeholders took this opportunity to exchange experiences and best practices with the management of natural resources. The OECD is at the forefront of global work on green growth and plays a key role in post-crisis recovery plans in many countries in order to foster growth and achieve sustainable development.

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Session summary:

In his introduction, Rintaro Tamaki (OECD Deputy Secretary-General) highlighted the Forum’s goal to provide a dedicated space for multidisciplinary discussions on green-growth and sustainable-development issues as well as for the identification of key knowledge gaps that could usefully be addressed by future work of OECD Committees.

Session 1:The State of Natural Resources: What is the Case for Green Growth?

The first session of the Forum set the scene on the state of natural resources and discussed the importance of their efficient use and management for green growth and more sustainable patterns of development. Simon Upton (Director of the Environment Directorate, OECD) reported on relevant findings from two recent OECD studies on material resource productivity and sustainable materials management as well as on progress with natural resource accounting at the national level. Frank Sperling (African Development Bank) concentrated on the example of Africa, noting that while the continent's ecological footprint remains comparatively small its vulnerability to climate change is compounding local environmental challenges (e.g. land degradation) and an increasing population that is expected to further increase pressures on natural resources. Resource stability, minimizing waste and pollution and building resilience should be some of the core objectives of green-growth policies in developing economies. The discussion following this session stressed the need for further efforts to implement the System of Environmental-Economic Accounting (SEEA) and ensure data consistency and comparability.

Session 2: Natural Resources and Risks to Growth

The purpose of this session was to consider some of the risks to growth from the mis-management of natural resources and to discuss ongoing work by the OECD that can contribute to a better understanding of how to assess and take into account such risks in decision-making. Sierra Leone's presentation provided an example of a fragile state, which due to its rich endowment of natural resources is taking concrete green growth action as a means to achieve poverty-reduction goals and environmentally and socially sustainable growth over the longer term. Nicola Brandt (OECD Economics Department) presented recent OECD work on adjusting traditional productivity growth measures to include natural capital, CO2 emissions and pollution and their implication for assessing economic performance. Laura Cozzi (International Energy Agency) presented the key messages from the latest World Energy Outlook 2012. According to the report, greater efforts on enhancing energy efficiency could cut the projected growth in global energy demand in the period to 2035 by half. The session revealed that the lack of reliable data remains a major challenge for both analytical work and policy making.

Session 3: Measuring and Valuing Natural Resources

This session focused on progress of key OECD and other international initiatives on the valuation of natural assets and ecosystem services as well as country experience in implementing natural capital accounts. Peter van de Ven (OECD Statistics Directorate) presented recent OECD work on the Natural Resource Index, including first results from its application. As to now, environmental assets used in this index are limited to natural resources, but ongoing work aims to incorporate water resources. Nicole Wyrsch (World Bank) presented the World Bank’s Wealth Accounting and the Valuation of Ecosystem Services (WAVES) initiative that aims to assist countries in the implementation of environmental accounting and to develop standard approaches for ecosystem service accounts. The initiative focuses on scaling up natural capital accounting on the basis of the SEEA, providing technical support, further developing the methodology for ecosystem accounting, and extending partnerships with the private sector.

The session was followed by a special lecture on ‘The Planet’s Resources and Human Demand For Them' held by Vaclav Smil (Distinguished Professor of the University of Manitoba, Canada). Professor Smil argued for a stronger focus on soil, including nitrogen flows and genetic diversity, when analyzing and understanding natural resource developments. Improvements in energy and material efficiency are critical for better management of natural resources, but will need to be a accompanied by changes in current consumption patterns.

Session 4: Tools for the Efficient and Sustainable Management of Natural Resources

The purpose of this session was to discuss the characteristics and design of various market instruments for natural resource management, including implementation and distributional issues and the importance of additional instruments to strengthen the governance for natural resource management. Norway presented principles and key common considerations of natural resource taxation and showcased its use of resource taxation. Indonesia’s presentation described how fiscal incentives could help to achieve a sustainable management of natural resources, which focuses on carbon-free energy generation and sustainable forest management. Denmark presented preliminary statistics on its green industry sector and its contribution to the Danish economy. A final presentation by Manfred Rosenstock (DG Environment, European Commission) provided principles to consider in the design of future natural resource taxes, which have seen a relative decline in Europe in recent years. He stressed the need to consider social acceptability issues in the design of policy tools. Some of the key messages of this session pointed to the need to design country-specific policy instruments, considering e.g. administrative capacity and informality. As regards environmental taxes, participants noted that they often tend to focus on energy and greenhouse gas emissions, and application to other resources and pollutants could be considered.

Session 5: Panel Discussion – Biotrade: Stepping or stumbling stone in the way towards greener growth?

The last session discussed the potential of bio trade for sustainable resource use and green growth. Johanna Speer (German Ministry for Economic Cooperation and Development) opened the panel, highlighting the opportunities that bio trade (e.g. natural cosmetics, medical plants, functional food, etc.) provides for the private sector to bring expertise, creativity and the necessary capital in green growth activities. In this session constraints to the expansion of bio trade were identified on both the national and international level. On the national level, these included high administrative burdens, the lack of access to finance, and the development of trust between the local communities and foreign investors. The green investment policy framework currently developed within the OECD was seen as a useful framework to encapsulate the issues in this regard. On the international level, this comprises access to regional or international supply chains (notably for small enterprises) and the design of quality and labelling standards, which are generally hard to meet for small-scale farmers as opposed to commercial medium- and large-scale producers.

Session 6: Conclusions

The last session was devoted to recapitulating the main issues raised during the Forum, to gather suggestions for improvement of future Forum events and to explore future work streams. Simon Upton (Director of the Environment Directorate, OECD) welcomed the Forum as a useful opportunity to link the macro and micro dimension of the topic. A representative of ten CSOs expressed interest in taking on a more active role in the preparation of and the discussions in future events. One of its main conclusions was that knowledge gaps both in terms of data or methodology should not be taken as a justification for the delay of policy action. Policy makers should also not lose sight of environmental limits, meaning that resource efficiency measures need to go hand in hand with changes in consumption patterns. It was also stressed that green growth policies should never stand isolated from the sustainable development framework. The Netherlands emphasised the importance of the practical implications of such meetings and proposed using the Forum as a public-private dialogue platform. Participants expressed support for designing future GG-SD Forums as two-day events

What are the challenges?
While some impressive progress has been achieved on the road to sustainable development since the Rio Earth Summit in 1992, growth over the last twenty years has not been sufficiently inclusive and has come at a price to our environment. To respond to these challenges countries around the world are introducing strategies for a greener and more inclusive growth path. The Rio+20 Conference in June 2012 has provided new impetus in this regard but also revealed that countries still face significant challenges in implementing sustainable development and green growth strategies, and considerable knowledge gaps remain. How can pollution and the use of natural resources be priced accurately? What is the best way to remove perverse subsidies? How can the poor be protected from, or compensated for, possible regressive impacts of policy reforms? What are the synergies between green growth and poverty reduction? Answers to such questions are complex and in most cases require cross-sectoral and multi-disciplinary responses; posing difficult challenges to policy makers.
What is the role of the GG-SD Forum?
To support countries in better addressing such cross-cutting questions, the OECD established the Green Growth and Sustainable Development Forum (GG-SD Forum). This new initiative aims at bringing together experts from different policy fields and disciplines working on green growth and sustainable development issues, and provides them with an interactive platform for encouraging discussion, facilitating the exchange of knowledge, and easing the exploitation of potential synergies. By specifically addressing the horizontal multi-disciplinary aspects of green growth and sustainable development, the GG-SD Forum will constitute a valuable supplement to the work undertaken in individual government departments and ministries.
What does the GG-SD Forum aim to achieve?
The main objective of the GG-SD Forum is to help improve public policy performance in the complex areas that concern several ministries or departments, by providing a dedicated space for multi-disciplinary dialogue on green growth and sustainable development. Policy makers and experts from OECD and partner countries will be able to meet and exchange experiences, and to identify policy tools and best practices that respond to their specific country circumstances. This also implies that remaining knowledge gaps can be identified, and that new initiatives can be designed to address them.
What exactly was discussed at the 2012 forum?
The GG-SD Forum will operate as an annual event which may take the form of a conference, a workshop or a seminar. Each year, the GG-SD Forum will focus on a different cross-cutting issue related to sustainable development and green growth. The GG-SD Forum is also open to key stakeholders and experts from other international organizations, civil society and the private sector. The first GG-SD Forum was held on 23 November 2012 at the OECD headquarters in Paris, with a focus on “Encouraging the efficient and sustainable use of natural resources: policy instruments and social acceptability”. A more efficient and sustainable use of natural resources is critical for enhancing economic growth and development, while ensuring that natural assets continue to provide the resources and environmental services onwhich our well-being relies. Particularly in developing countries, where a great part of the society directly or indirectly depends on natural capital, sound natural resource management provides anopportunity to unlock new drivers of development, reduce their volatility to environmental risks, and to increase the livelihood security of the poor.‌

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