Aligning Policies for a Low-Carbon Economy


A key obstacle to the effectiveness of climate policies is the extent of regulatory and policy frameworks outside the traditional climate agenda that are not aligned or coherent with climate and sustainable development objectives. Aligning Policies is the first of its kind diagnosis of policy misalignments and identifies possible policy solutions across investment, taxation, innovation and trade and adaptation policy, and policy governing activities such as electricity, urban mobility and land-use, all critical for the low-carbon transition. Identifying and addressing these misalignments systematically in each country will enhance the responsiveness of the economies and societies to the climate and sustainable development policy signals.


It was against this background that the KSA supported the regional expert seminar on Aligning Policies for the Transition to a low-carbon Economy: Reconciling Environmental, Social and Economic Objectives jointly organised by the OECD and the Indonesian Ministry of Finance (Fiscal Policy Agency) on 4-5 November 2015 in Bogor, Indonesia. The event attracted more than 90 participants, including policymakers from line ministries (financial/fiscal policy, planning, economy, social, and environmental ministries), experts from the region (Cambodia, Chinese Taipei, India, Lao PDR, Malaysia, Myanmar, Philippines, Singapore, Thailand, Viet Nam), key international and development organisations (ADB, ERIA, JICA, GIZ, CAPSA, UNESCAP, GGGI, IISD), and Jakarta-based OECD Member countries (Canada, Ireland, New Zealand). The 1 ½ day expert seminar provided a platform for the OECD to increase the visibility of the APT work in the region, and for partner countries and region-based organisations to share their knowledge and experiences on the topic. The discussions were dynamic and frank, and produced positive and constructive feedback. There was considerable interest in mainstreaming the recommendations of the APT report to policies at the country level; for example, the Deputy Secretary General of the Office of the National Economic and Social Development Board of Thailand indicated her interest in applying the APT approach to Thailand’s 12th National Development Plan being prepared.







As a follow on to the regional dialogue, the KSA also supported two knowledge sharing APT events at the COP21, with the aim of sharing knowledge and experience in policy reforms (of the financial system and electricity markets), across developed and developing countries, to better align policies with the low-carbon objective. The objectives were threefold: i) identify concrete policy coherence actions at the domestic and international levels required to enable an efficient shift to a low-carbon and resilient economy; ii) explore ways to address misalignments between overall policy frameworks and climate goals; and iii) share knowledge and experiences on successful policy reforms in different country contexts.


‌The COP21 side event on Getting the house in order: Aligning policies for the low-carbon economy held on 4 December 2015 in the OECD Pavilion provided an opportunity to continue and expand on the discussion from the Indonesia seminar by inviting experts from China, Mexico, ASEAN and the private sector (BIAC) to share their perspectives. The event exposed a different but important dimension of the alignment issue; that is how smaller economies could pull together their policy initiatives to create broader markets for low-carbon and sustainable technologies. It was also a first opportunity to share the APT approach with China, which provided excellent insights into the efforts made by the Chinese government in addressing policy misalignments. Mexico showcased their practical approaches to managing urban development and related land-use.


The second COP21 side event on Rewiring electricity policy for a low-carbon economy (4 December 2015 in the OECD Pavilion), in co-operation with IEA and NEA, focused on the central question of electricity in the low-carbon transition, and in particular, on how electricity policy structures ought to be revamped to facilitate investment in line with the climate change agenda. Perspectives from Brazil, Hong Kong and Europe were shared. The event provided a platform to share the APT results in an important field of climate policy and to identify how non-OECD jurisdictions have applied different frameworks and solutions to this issue, which are starting to prove useful in the ongoing revamping of electricity sector in the OECD countries and beyond. For example, Brazil presented how they evolved from a subsidy-based mechanism to support wind power to a system that combines planning and competition in order to avoid undue rents to projects developers – an approach that could inspire OECD countries in their approach to electricity regulation going forward. Hong Kong’s Scheme of Control Agreement which introduced different incentives for electricity utilities to improve overall service, could be of interest to countries that have not liberalised their electricity sector and must now find an effective way to decarbonise electricity while ensuring reliability of supply in a context of growing demand.


Finally, as part of the APT work, the KSA also supported the organisation of the Equator Initiative’s 2015 Community Dialogues in Paris. The Equator Initiative is a UNDP-led initiative to recognise and advance local sustainable development solutions for resilient communities. The objective of the Initiative is very much in line with the APT work which calls for an integrated approach to strengthen incentives for sustainable land use and, in


Equator Initiative Community Dialogue participants with OECD Secretary-General Gurría

particular, highlights the importance of the role played by local communities in managing natural capital, such as forests and fisheries, more sustainably. The Initiative holds a series of community-driven dialogue events, providing opportunities for indigenous peoples and local communities across the world to share experiences, develop capacities and influence policy. The 2015 dialogues were held in conjunction with the COP21 in Paris.


The Community Dialogues, including the multi-stakeholder luncheon, enabled peer-to-peer learning of the 21 community initiatives being awarded the Equator Prize 2015, and helped open, for some, previously closed communication channels with policy makers from their governments, as well as the wider international community. The dialogue event culminated with the Equator Prize 2015 Award Ceremony, with the attendance of more than 1,600 leading thinkers, policymakers and activists from government, civil society, UN agencies, academia, indigenous groups, and media. The dialogue events demonstrated the strong commitment that exists across sectors to empowering indigenous peoples and local communities with the rights and resources they need to continue protecting forests, agricultural landscapes and local livelihoods. The Equator Prize recipients have returned home to leverage this international recognition for greater prominence for their work. The knowledge sharing meetings at the OECD helped put indigenous peoples and local communities on the map for the international community.



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