Remarks by Angel Gurría, OECD Secretary-General
Dublin, 4 November 2009
Minister, ladies and gentlemen,
It is a great pleasure to be here in Dublin, in Trinity College, a world-renowned centre of learning, to present the Conclusions and Recommendations of the second OECD Environmental Performance Review of Ireland. It assesses Ireland’s environmental performance in the period 2000-2009, both your achievements as well as the remaining challenges, and presents 38 specific recommendations.
Since we launched work on this review over a year ago, the full dimensions of the financial and economic crisis have become clearer. As a small, open economy Ireland was particularly vulnerable to the economic downturn, and suffered as a result. Ireland faces difficult economic and environmental challenges, but there are also great opportunities. It brings back the notion that: “a crisis is a terrible thing to waste.”
Last June, Ministers of Economy, Finance, Trade and Foreign Affairs from 34 countries met at OECD to address this issue. Amongst other things, they adopted a Declaration on Green Growth. They agreed to develop frameworks for recovery that would restore sustainable economic growth, prevent environmental deterioration and enhance quality of life. They recognised that environment is not just a matter for environmental policy-makers; it is now an element of economic policy and a driver of economic recovery.
In fact, environment is no longer seen just as an item on the cost side of the equation. Important benefits flow from well-designed environmental policies and investments. They could take the form, for example, of new skills for new and better jobs and improved technologies, as well as healthier populations and more productive natural resources.
So implementing such policies makes sense both to stimulate economic activity in the short term, but also to help steer our economies in ways that are stronger, cleaner and fairer in the longer term. This is why the OECD is now engaged in designing a Green Growth Strategy, one of our top priorities.
I welcome the Irish government’s initiatives in this regard. The policy adopted last December, “Building Ireland’s Smart Economy”, the report of the tax Commission, and the “Renewed Programme for Government” adopted earlier this month, which calls for a Green New Deal, provide an excellent framework for driving the economic recovery in a direction that is environmentally sustainable and more socially equitable. Other countries such as Korea, China, the UK and the US are developing similar initiatives. We plan to analyse these experiences and identify good practices as part of the OECD Green Growth Strategy.
Even though Ireland’s economy has been hit hard by the recession, there are many features of the economy that have developed over the last 15 years that should enable it to bounce back as global economic activity picks up: a dynamic enterprise sector, a highly educated workforce, and a commitment to research and innovation.
Regarding environment, Ireland has made important progress since the last OECD environmental performance review in 2000. Environmental policies have been improved, environmental institutions strengthened, and significant investments made in environmentally-related infrastructure. As a result, Ireland generally has good air and water quality. Energy intensity, or energy use per unit of GDP, is the lowest among OECD countries.
Many of the efforts to strengthen environmental policies and institutions have accelerated in the last few years, and I would commend Minister Gormley for his leadership in this regard.
Nevertheless, important challenges remain. Climate change is undoubtedly one of the greatest challenges the world faces today. Ireland’s target under the Kyoto Protocol was to not let greenhouse gases increase beyond +12.6% compared to 1990 levels. In 2007, they were +25%!
Significant efforts will be needed in the transport and agricultural, as well as the residential and commercial sectors. Investments made now can help ensure that when economic activity returns to previous levels, the Irish economy will be generating less greenhouse gases per unit of GDP. The benefits of these investments generally exceed their costs by a wide margin, and they create jobs.
Getting the prices right and putting a price on carbon will be fundamental to these efforts. We recommend that Ireland applies a carbon tax to the sectors outside the EU Emissions Trading Scheme. More generally we see further steps that could be taken to remove environmentally-harmful subsidies and tax breaks, for example related to air travel and the use of peat as an energy source. Regulations and standards are also needed, but providing the right price signals is crucial if the appropriate investments are to be made in low carbon technology and infrastructure. Once done, the benefits would last for many years to come.
Charging households for their consumption of water is another recommendation. Indeed Ireland is the only OECD country that does not do so. The consequences are that demand for water is too high, water infrastructure is oversized and expensive to operate, and water losses from the network are large.
Coming from Mexico I am very aware of the social concerns that exist about charging people, especially poor people, for their use of water. But there are ways to target support to poorer households to ensure that they have adequate access to water services. Based on past OECD work, countries have used a variety of means for this purpose, including income support, vouchers to cover the cost of a certain amount of water consumption, or volumetric charging where the initial amounts are free or low-cost. Not charging for water use is effectively a subsidy for richer households. It undermines the financial viability of water utilities, and results in inefficient use of this increasingly scarce resource.
Pricing and financing are vital for achieving environmental goals, as is good governance. But in many OECD countries, public support is also crucial. Our report shows that the Irish authorities have made many efforts to improve the dissemination of environmental information to the public. However, more could be done to strengthen public participation and access to justice in environmental decision-making. In this regard, we would strongly encourage Ireland to ratify the Aarhus Convention that addresses these issues: Ireland is the only EU country not to have done so.
Ireland has a beautiful natural heritage. People come from all over the world to see it. Yet much more could be done to strengthen nature management and to protect biodiversity, not least to keep the tourists coming. Institutions, finance and public support for nature protection are much weaker than in many other OECD countries. Protected areas cover only 0.5% of the land area, the lowest among OECD countries. The report provides several recommendations to strengthen policies and practices in this area.
Mr Minister, ladies and gentlemen,
Conducting peer reviews, such as the environmental performance review programme, is one of the core functions of OECD. The objective is not to rank countries in a league table. Rather we are trying to help countries to learn from each others’ experience and to suggest ways to achieve environmental goals more efficiently and effectively. This Environmental Performance Review is the result of a rich and co-operative dialogue between Ireland and the other OECD members. I would like to thank those who have contributed, from government, business, academia and civil society.
Mr. Minister, we sincerely hope that these Conclusions and Recommendations will help to advance the policy debate in Ireland, and to support the implementation of your Green New Deal.
I wish you good luck in these important endeavours and invite you to continue to share your experience with other OECD members.
Thank you very much.
OECD Secretary-General visit to Ireland (Dublin, 4 November)