Launch of the 2021 Regional Outlook, 5 May 2021

 

Remarks by Angel Gurría

Secretary-General, OECD

Paris, 5 May 2021

Distinguished Guests, Colleagues:

I am delighted to launch the 2021 Regional Outlook, “Addressing COVID-19 and Moving to Net Zero Greenhouse Gas Emissions”.

The world is still grappling with the effects of COVID-19. Recently, the milestone of 3 million deaths was sadly surpassed. The economic impact has also been brutal. Global GDP fell by 3.5% during 2020. While the economic outlook is improving in 2021 – we just revised our global growth projections upwards to 5.6% – the recovery will be uneven, and many countries will take several years to regain their pre-crisis dynamism.

The COVID-19 crisis has revealed how vulnerable our world can be, and how quickly shocks can threaten our societies, our communities.

From the outset, place was central to COVID-19’s spread. In urban areas, physical proximity facilitated rapid transmission. But broader place-based factors like housing conditions also mattered: poorer places with crowded living and working conditions were among those hardest hit.

This is why many governments adopted a place-based approach to address the immediate health impacts of COVID 19. For example, Australia, Canada, Colombia, France and Italy adopted measures for specific localities and regions to target virus hotspots.

The economic impacts of COVID-19 have also varied enormously across places. In 2020, employment at risk from lockdown varied from less than 15% to over 35% across regions, driven in part by the location of strongly hit sectors such as tourism, hospitality, retail and culture. Again, economic action has often been locally targeted: for example, 30% of subnational governments in the EU provided large direct support to businesses and the self-employed.

As we look to recover from COVID-19, the 2021 Regional Outlook reminds us that a coordinated, place based approach will be vital to address future global challenges. In particular, our report shows the urgent need to deploy place-based policies to tackle the long term crises around the corner: climate change, biodiversity loss, and environmental degradation.

Allow me to outline some key reasons why.

First, the COVID-19 pandemic has again highlighted the importance of the environment to outcomes in other domains, such as the spread of diseases. Land use change and biodiversity loss heightens the risks of new pandemics emerging regionally when appropriate measures are not implemented.

Second, the effects of climate change are rapidly intensifying. As a result, the number of recorded extreme weather events has trebled in the last 4 decades alone. Places must be equipped with the right policies to deal with these events.

And third, the costs of addressing these environmental emergencies will affect some places more than others, as our report shows. While overall employment losses from the transition to climate neutrality are small, at the local level they can have potentially devastating economic effects.

Local measures will thus be key to ensuring a just transition. Given that local governments are in charge of 64% of public investment in sectors that directly impact climate change and other environmental issues, they are in a unique position to act. In this context, the OECD’s new International Programme for Action on Climate (IPAC) could help ensure that urban and regional measures are aligned with national policies in the collective fight to tackle climate change and deliver on net zero emissions by 2050.

And local action will also bring local benefits! Our report shows that bold and decisive action can create local jobs. For example, for every 1 million euros spent to boost energy efficiency in buildings, 27 jobs would be created for one year. Local climate policies and initiatives can also help reduce air pollution in rural and urban areas, facilitate mobility and improve local residents’ health.

Dear Friends:

This year, the world has an opportunity to take a huge step forward to address environmental emergencies. The recent US Climate Summit has confirmed a strong global commitment to stop global warming, to protect our fragile ecosystems and to safeguard every living being on this planet.

Our 2021 Regional Outlook is a powerful reminder of how effective place-based policies can contribute to this global effort.

Thank you.

 

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