Environmental policy tools and evaluation

Climate Change: A Matter of Political Will


Remarks by Angel Gurría, OECD Secretary-General, at the OECD Forum 2008: Session on Mobilising Political Will

OECD International Conference Centre
Paris, 3 June, 2008, 17:00 - 18:00


Prince Albert II, Secretary de Boer, Minister Goff, Ladies and Gentlemen,

It is a great pleasure to be with you at the OECD International Conference Centre to talk about climate change; the greatest challenge of our times. 

Success in our efforts to address climate change depends on various factors : getting the numbers right; identifying the most appropriate instruments; striking an all-inclusive global deal for the post-2012 architecture; promoting new policies that foster eco-innovation. But moving forward on all these tracks depends on another strategic element: mobilising political will.

Political will is the space where action starts; it is the DNA of new and better realities. It will be crucial to count on this powerful tool, because we will have to set ambitious goals, to reach historical agreements and to take immediate action.

We just published our 5 year OECD Environmental 0utlook and in this analysis we have several scenarios, one of which is based on stabilizing green house gas emissions in the atmosphere at 450 ppm by 250. This is the one we would like to see happening. But to reach these ambitious goals we will need a collective response and a mix of policy instruments.

Our analysis tends to give priority to market-based instruments ─ such as cap-and-trade schemes, taxes or reforms of subsidies to fossil fuels ─, as they ensure that emissions reductions take place where they cost less. They also provide incentives for eco-innovation. These tools will need to be complemented by others, such as voluntary agreements, support for research and development on technological breakthroughs or codes and regulations for vehicles and buildings.

We will also need an innovative mechanism to share the costs of action amongst countries. A lot of the opportunities for low cost emissions reductions are in developing countries, but many of them cannot participate if they have to bear the full costs of action. Financing to support mitigation and adaptation, as well as mechanisms to ensure technology transfer, will be needed.

And we will have to address the competitiveness issue. Many OECD countries are concerned that taking unilateral action on climate change might harm their competitiveness. And this is a fair concern. Introducing carbon reduction policies only in some countries could lead companies to relocate to other countries that do not apply strong climate policies; the so called "carbon leakage" concern.

Our analyses show that this effect is likely to be small and (if it exists) it will only affect certain energy-intensive and trade-exposed industries. Still, the best guarantee to avoid carbon leakage is a comprehensive country participation in the post-2012 framework.

But let's also look at the other side of the coin: tackling climate change brings new opportunities that can improve competitiveness in some sectors. Ambitious environmental policies can act as a catalyst for eco-innovation; for example, by creating new markets for low-carbon technologies. Some countries have acquired a competitive or "first mover advantage” in the renewable energy sector by strategically investing in the development of “green” sectors.

To move forward, political leaders will have to take decisions that imply risks, and political costs. Multilateral organisations are ideal vehicles to move forward; because in a multilateral framework such political risks and costs are shared. Thus, OECD is working, in close coordination with other international organisations, to provide such a framework and lower the political costs of necessary decisions.

Political decisions are based on information. We must provide decision-makers with high quality analysis, objective and reliable economic evidence and serious forecasts with credible scenarios. We also need to let them know what others are doing; what reforms are being pushed forward in other countries, what has failed and which best practices are already working. They need to be able to compare their country’s performance, to project and to estimate the costs of alternative solutions.

And, crucially, we have to communicate these findings better; translating the complex facts and figures into common language. Otherwise it will be difficult to convince our societies to pay the cost now to avoid a long term risk that can turn into a tragedy tomorrow.

And I am not talking about an insurance policy. Insurance is aleatory by nature; it is paying now to protect us from a calamity that might or might not happen in the future. With climate change instead, we know ─with high accuracy─ what will happen, when it will happen and where it will happen. I am talking about paying a cost now to avoid a much higher cost tomorrow.

Normally, political decisions are taken with a considerable level of uncertainty. In addressing climate change we will be taking decisions with enough information to evaluate alternative scenarios; with sufficiently reliable data to justify and support our actions and their costs , our policies and reforms.

Stopping climate change is a big challenge of the political economy of reform. And just like any important political decision with broad economic and social implications we will need to mobilise public opinion; we have to involve voters in the project.

Decisions and action by national governments are critical but it is equally fundamental that social actors like the business community, trade unions, NGOs, universities, think-tanks, etc. get involved and commit. This is why this Forum is so important. Minister Leuthard will report the conclusions to the Ministerial Meeting at the OECD. Of course we will need new policies, regulations and standards at all levels of government; but they cannot have a broad impact if they clash with the expectations of people.

OECD will keep working to provide decision-makers and society with comparable and user-friendly data, new ideas and alternative routes to reverse climate change. We will keep blending experience and talent to generate alternative solutions based on common understandings. We will keep providing a hub for global dialogue on climate change issues.

Because we are convinced that a brighter, greener future is possible. And we trust we can sell this notion to our constituencies.

Because, that is what we are about : building a more balanced, sustainable and inclusive globalisation for the benefit of future generations.

Thank you very much.


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