GLOBE COP21 Legislators Summit - Towards Coherence and Impact: The Challenge of Paris and the Post-2015 Agenda for a Prosperous and Sustainable World

Remarks by Angel Gurría

Secretary-General, OECD

National Assembly of France

Friday, 4 December 2015 

 

 

Parlementaires, juges, eminentes personalités et participants, membres du réseau GLOBE,

C’est pour moi un immense honneur d’être parmi vous aujourd’hui. Au cours des quinze prochains jours, tous les yeux de la planète seront tournés vers Paris, avec l’espoir que les dirigeants du monde s’entendent enfin sur un accord global décisif sur le climat. Depuis de nombreuses annèes, les réseaux parlementaires et les legislateurs apportent un concours essentiel aux efforts entrepris pour améliorer la gouvernance environnementale, la protection du climat et la biodiversité au service du développement durable. Vous avez toujours été présents lors des précédentes réunions de la COP, et nous devons reconnaître le soutien précieux que vous vous efforcez d’apporter afin de parvenir à un accord ambitieux sur le changement climatique.

 

This year’s agenda has been quite intense. In July, UN members met in Addis Ababa to renew their commitments to financing for development. A few months later in New York, they agreed on 169 targets for 17 sustainable development goals. They are now gathered here in Paris to try to seal a new universal deal on climate. In a few days in Nairo, we will try to advance the global trade agenda.

 

These global agendas are closely linked. If we fail on climate, we may very well fail on the sustainable development goals. Why? Because the consequences of delayed action will weigh heavily on the least-resilient societies. Continuing down the carbon path will only lead us to a more vulnerable world; a world where rising risk from climate disaster and its financial liabilities are increasingly tied to out of date infrastructure, especially in those places least equipped to cope.

 

I therefore applaud Globe’s emphasis on a co-ordinated approach to the 2015 agenda.

 

Today, I’d like to talk about the importance of policy coherence once we step off the global stage. This is especially true for the topic that brings us together in Paris: climate change.

 

First, we need to recall the scope of the challenge.

 

Our economies and infrastructure have been hard-wired around fossil fuels for well over a century. We live with laws, policies and institutions that were designed to make a fossil economy work.

 

There is no doubt that the core building blocks of climate mitigation measures remain a key component to achieving global low-carbon objectives:

 

• We need to establish strong, transparent and predictable climate policies, starting with a price on carbon.
   
• We need to eliminate subsidies and tax expenditures that continue to favour the production and consumption of fossil fuels. Governments in OECD and selected emerging economies spend up to USD 200 billion every year on subsidies and tax breaks for fossil fuels – that’s around five times the amount governments spend on support for renewable energy, and twice the amount committed by developed countries to help developing countries achieve their climate goals!
   
• And we need to support next-generation low-carbon technologies and energy efficiency breakthroughs.

 

These measures are all essential for a low-carbon future.

 

But they will not be enough. We are still on a serious collision course with nature!

 

Just last month, the OECD released a report, Climate Change Mitigation: Policies and Progress. The report tracks the efforts of 34 OECD countries and selected key partners – which together account for 80% of global emissions – to tackle climate change mitigation. What do the latest data tell us?

 

• More and more countries are implementing policies to reduce emissions and promote low-carbon technologies.
   
• But based on historic performance, countries are not achieving reductions fast enough to reach their own committed targets and goals. This is before we even get to the issue of whether they, collectively, add up to a maximum warming of 2°C! They still don’t!

 

If we want to achieve a zero net carbon world by the end of the century, we need to significantly accelerate progress.

 

And this means that we need to look beyond core climate policies.

 

Climate policies are much less effective, and more expensive to implement, when they are simply grafted onto a fossil-fuel complicit economy.

 

Earlier this year, the OECD joined forces with its three sister organisations (the International Energy Agency, the International Transport Forum and the Nuclear Energy Agency) to identify the obstacles to a low-carbon future that exist in every corner of the economy. The resulting report, Aligning Policies for a Low-carbon Economy, diagnoses a number of misalignments between climate objectives and public policies.

 

What does this mean in concrete terms?

 

Let’s take fiscal regimes as an example. Beyond the fossil fuel subsidies and tax breaks I mentioned, we need to take a closer look at other tax provisions, like personal income tax. Preferential tax treatment of company cars encourages higher CO2 emissions and greater car use. Company cars represent almost one-fifth of the OECD car fleet, and a subsidy of around EUR 19 to 33 billion annually. The estimated associated social costs – relating to congestion, air pollution, traffic accidents – amount to EUR 116 billion a year across the OECD!

 

To take another example: investment. Over two-thirds of energy supply investment continues to relate to fossil fuels. This is locking us into an even more carbon-intensive development pathway!

 

Part of the challenge is that some financial regulations inadvertently hinder low-carbon, climate resilient investment. Financial markets are geared to the short-term. This creates a disconnect between the time horizons of investors and the long-term finance needed for low-carbon infrastructure, which is typically capital intensive.

 

So what can we do?

 

First, we need to continue to measure progress toward climate objectives. Our Climate Change Mitigation report, and GLOBE International’s 2015 Global Climate Legislation Study, which reviews climate change legislation in over 80 countries, can help governments stay on track, share best practices, and make efforts visible beyond jurisdictions.

 

Second, governments need to take an economy-wide review of existing policies and legislation to ensure that they coincide with global climate objectives. This is essential to help us tap into every cost-effective avenue for reform.

 

As legislators, you also have a major role in advancing the international climate agenda. You are tasked with enacting relevant domestic legislation and ensuring that laws are properly implemented. We have already seen significant progress on this front:

 

• Here in France, for instance, the energy transition law (Loi de Transition Énergétique) is driving carbon disclosure to investors. This will ultimately help investors make more informed decisions on climate risk.
   
• In the Netherlands, the groundbreaking Urgenda case in June, in which the court ruled that Dutch citizens have a legal right to be protected from climate change, shows just how significant the role of the judiciary can be in advancing climate objectives.

 

Ladies and Gentlemen,

 

Climate change is a global challenge that calls for actions across all sectors of the economy, and by all actors in the public sphere. Legislation, and thus, legislators, meaning you, will be a key piece of the puzzle. The OECD stands ready to join forces with you to help countries navigate the transition to a low-carbon economy.

 

Thank you.