G20 Finance Ministers and Central Bank Governors Meeting - Session 1: Global Economy and Policy Actions for a Transformative and Equitable Recovery, 26 February 2021

 

Remarks by Angel Gurría,

Secretary-General, OECD

Paris, 26 February 2021

Ministers, Governors,

Thanks to Janet for advancing her notes. It is a good practice we should all adopt. I totally agree on the notion of a “Global Immunization Campaign” and on the notion that “this is a moment to go big”.

Let me share 2 specific points in more detail.

First, it is of paramount importance to reach an agreement, by mid-2021 on the tax challenges arising from digitalization. We very much welcome the positive and engaging messages from the US, including by Secretary Yellen. We now need to deliver a consensus- based solution by the G20 July meeting. We have a unique opportunity to put an end to the race to the bottom and ensure fair taxation of multinational companies, including digital companies. Such a deal could increase global corporate income tax revenues by up to 100 billion USD per year, around 4%. In contrast, the absence of a consensus-based solution would likely lead to a proliferation of uncoordinated and unilateral tax measures and an increase in damaging tax and trade disputes.

Second, following the targets that many of you have announced to reach net-zero emissions, it is time to take action and build on the ‘green momentum’. We very much welcome the G20’s resolve to discuss what we can do together to put an effective price on carbon. At present, 70% of carbon emissions are not taxed, and only 10% of emissions are priced at a modest EUR 30 per tonne of CO2. We also need to address the issue of subsidies to carbon. Many national and sub-national governments are increasing fossil-fuel subsidies, or waiving charges. And when it comes to “green recovery measures”, only a small share of the massive support provided is “green”. In fact, fossil fuel subsidies rose by 5% year-on-year to USD 178 billion in 2019 and most certainly continued to grow last year.

We can and must do better! Alignment of price signals with environmental and climate policy objectives, including through carbon pricing, would lower environmental policy uncertainty and improve the prospects for the funding of longer-term investments in clean technologies. The OECD is working with the IMF to scope common ways of measuring carbon pricing and starting an international dialogue under the leadership of the G20. We also look forward to continue supporting the G20 fossil-fuel subsidies reform agenda. This includes reviving the peer review process that we successfully practised in previous years, in line with your commitment to phase out harmful fossil fuel subsidies.

Count on our strong backing to the G20 effort to ensure that CO2 emissions pay a price commensurate to the damage they cause!

 

Related Documents

 

Annual report
Discover the
OECD
download
Brochure
Read our
annual report
download