The Climate Action Monitor 2022 updates the International Programme for Action on Climate (IPAC) annual comprehensive assessment of country progress towards net-zero goals and the Paris Agreement commitments. This year's edition draws on two new...
What challenges and opportunities does the green transition entail for Latin America and the Caribbean? This 15th edition of the Latin American Economic Outlook explores options for the region to recast its production models, transform...
Accelerating the transition to net zero greenhouse gas (GHG) emissions is urgently required to contain the risks of climate change. As countries seek to reduce GHG emissions, they can employ or reform a wide range...
This report provides disaggregated data analysis of climate finance provided and mobilised in 2016-2020 across climate finance components, themes, sectors, and financial instruments. It also explores key trends and provides insight relating to the distribution...
The report Aggregate Trends of Climate Finance Provided and Mobilised by Developed Countries in 2013-2020 adds figures for 2020 to the previously published 2013-2019 time series, providing an aggregate-level assessment against the initial target year...
This report presents policy reform options to support Lithuania in meeting its climate neutrality target. It takes stock of Lithuania’s current and planned climate policies and assesses their potential for meeting the country’s climate ambitions. The report details the results of modelling carried out to assess the effectiveness of different policy scenarios, an analysis of carbon pricing and the role of innovation, an assessment of financial needs in the transition to net zero, and an analysis of the distributional implications of carbon pricing. Bringing together these findings the report offers recommendations for policy reform, highlighting the importance of setting price signals complemented by innovation support, as well as the potential of revenue recycling options in alleviating distributional concerns.
Climate change presents a major social, economic and political challenge for the Slovak Republic. The majority of municipal administrations are unaware of the potential climate risks they face today and in the coming years. Identifying risks posed by climate change and its inevitable impacts is an essential part of developing adaptation policies. While national adaptation policies have historically been formulated in an ad hoc manner, an evidence-based approach that relies on data is increasingly informing policy decisions. This paper provides an overview of the country’s adaptation policy context and presents a methodology – and the results of its application – for measuring climate change risks with respect to heat, drought and extreme precipitation. The results aim to inform future budget allocation decisions for climate change adaptation.
The challenge of achieving net zero CO2 emissions will require a significant scaling up of production and international trade of several raw materials which are critical for transforming the global economy from one dominated by fossil fuels to one led by renewable energy technologies. This report provides a first joint assessment of data on production, international trade, and export restrictions on such critical raw materials from the OECD’s Inventory of Export Restrictions on Industrial Raw Materials covering the period 2009-2020. It presents data on production and trade concentrations, sheds early light on the impact of export restrictions, and discusses possible directions of further work in this area. The evidence presented suggests that export restrictions may be playing a non-trivial role in international markets for critical raw materials, affecting availability and prices of these materials. OECD countries have been increasingly exposed to the use of export restrictions for critical raw materials.
Governments in many countries are pursuing higher environmental goals for agriculture. However, in an interconnected world, the unilateral adoption of environmental policies for agriculture can reduce the producers’ competitiveness and induce pollution leakage. This report analyses these challenges and discusses policy solutions, focusing on two examples: climate change mitigation policies and policies limiting the environmental impacts of pesticides. The extent of competitiveness and leakage effects is found to depend on market conditions, differences in pollution intensity, and the type of environmental policy adopted. Two policy routes are identified to improve agriculture’s environmental performance while maintaining the benefits of global markets. The first route relies on “direct” environmental policies, such as market-based instruments or regulations, which are rapidly effective in limiting environmental impacts but may require additional complementary policies to limit their potential competitiveness and leakage impacts. The second route involves alternative policies acting on agricultural supply, demand, or through private sector engagement, which limit competitiveness and leakage impacts but may require time to be environmentally effective.
Insurance coverage plays an important role in protecting households, businesses and governments from the financial impacts of climate-related disasters. However, climate change is expected to increase the frequency and/or intensity of a range of climate-related (weather) perils and could potentially limit the availability of affordable insurance in the future. Risk reduction through adaptation to climate change will be the only sustainable means to limit the increase in future climate damages and losses and potential disruptions to insurance markets. This paper examines the contribution of the insurance sector to climate adaptation. It outlines some of the challenges to assessing future climate risks, encouraging policyholder risk reduction and supporting resilient reinstatement. The paper also identifies potential approaches that policymakers, regulators and supervisors could consider to support a greater contribution of the insurance sector to climate adaptation.
Emissions of greenhouse gases (GHGs) from human activities disturb the radiative energy balance of the earth-atmosphere system. They exacerbate the natural greenhouse effect, leading to temperature changes and other disruption of the earth's climate. Land use changes and forestry also play a role by altering the amount of greenhouse gases captured or released by carbon sinks. Carbon dioxide (CO2) from the combustion of fossil fuels and deforestation is a major contributor to greenhouse gases. CO2 makes up the largest share of greenhouse gases and is a key factor in countries’ ability to mitigate climate change. National emissions are also affected by changes in global demand and supply patterns with increasing trade flows and the displacement of carbon-intensive production abroad. Reductions in domestic emissions can thus be partially or wholly offset elsewhere in the world.
The housing sector is one of the main sources of CO2 emissions in OECD countries, accounting for over a quarter of the total. Robust and rapid action is required to reach the net zero emission target by 2050. Decarbonising housing involves halting the use of fossil fuels in homes, ensuring that electricity is generated from carbon-free sources, using high-energy-efficiency appliances and heating systems, ensuring effective insulation and encouraging behavioural changes. This paper discusses which policy instruments can prompt this transformation of the housing sector, ranging from carbon pricing through energy labelling requirements to green housing finance.
in "OECD Science, Technology and Innovation Outlook 2023"
The climate emergency requires nothing short of a total transformation of sociotechnical systems in areas such as energy, agrifood and mobility. STI has essential roles in these transformations, but governments must be more ambitious and act with greater urgency in their STI policies to support them. They need to design policy portfolios that enable transformative innovation and new markets to emerge, challenge existing fossil-based systems, and create windows of opportunity for low-carbon technologies to break through. Larger investments and greater directionality in research and innovation activities are required, but should coincide with a reappraisal of STI systems and their supporting STI policies to ensure they are “fit-for-purpose” to contribute to sustainability transitions. For example, STI policies need to support new modes of partnership (e.g. between researchers, businesses, governments and citizens) and develop enabling resources (e.g. finance, skills and knowledge) conducive to tranformative change. They also need to balance supply and demand side interventions that target both production and consumption. The chapter outlines ten sub-domains of STI policy where reforms are needed and highlights significant gaps between R&D funding and net-zero ambitions.
in "OECD Science, Technology and Innovation Outlook 2023"
Mission-oriented innovation policies are increasingly popular as a policy response to meeting net-zero targets. They have clear objectives and measurable targets, promote broader co-ordination of policy plans across administrative silos, and better integrate various support instruments across the different stages of the innovation chain than more traditional and fragmented policy approaches. These policies remain unproven, however, and early indications suggest they lack sufficient scale and reach to non-STI policy domains to have wide-ranging impact. The challenge remains to move these initiatives from effective co-ordination platforms to integrated policy frameworks that mobilise and align a wide range of actors. Overcoming many of the barriers – including administrative and legal rules, accounting structures and governance models – requires changes that are far beyond the reach of STI authorities alone and will need significant political support.
in "OECD Environmental Performance Reviews: Portugal 2023"
This chapter provides a brief overview of key environmental trends in Portugal and progress towards the Sustainable Development Goals and environmental targets. It assesses the environmental effectiveness and economic efficiency of the environmental policy mix, including regulatory, fiscal and economic instruments, and public and private investment in environment-related infrastructure. It examines the interaction between the environment and other policy areas with a view to highlighting the opportunities and barriers to enhance policy coherence for sustainable development.
in "OECD Environmental Performance Reviews: Portugal 2023"
Portugal has overachieved its 2020 climate mitigation goals thanks to a significant decrease in greenhouse gas (GHG) emissions over the past decade. It has stepped up its efforts to adapt to climate change. The country can be commended for its leading role in climate action under its Presidency of the Council of the European Union in 2021. This chapter reviews progress and identifies remaining challenges regarding climate change mitigation and adaptation. It also examines the effectiveness of sectoral and horizontal policies towards Portugal’s 2050 carbon neutrality goal.
The green transition is changing jobs, skills, and local economies. It poses new challenges but also opportunities, both of which will differ across places within countries. This report, Job Creation and Local Economic Development 2023: Bridging the Great Green Divide, provides novel evidence on those risks and opportunities across regions in 30 OECD countries. It examines the geography of green-task and polluting jobs and examines the impact of the green transition on gender and socioeconomic inequality by identifying the characteristics of workers in those jobs. Furthermore, the report tracks the progress regions have made in greening their labour market over the past decade. The report provides actionable policy recommendations that can help deliver a green and just transition. It looks at past and other ongoing labour market transitions and identifies local success drivers that can help communities prepare for and manage the impact of the green transition. Finally, it points out actions for ramping up and adapting local skills development systems to meet the demands of the green transition and equip their workforce with the right skills for the future.
This new web format for Country Notes on Fossil Fuel Support provides interactive on-line access to the latest data from the OECD Inventory of Support Measures for Fossil Fuels by country – identifying and estimating the value of support arising from policies that encourage the production or consumption of fossil fuels. The web version allows users to download, share and play with the data. Interactive graphics enable data visualisation, in national currency, by beneficiary and by energy product. These Country Notes provide, for each of the 50 economies covered in the Inventory, a snapshot of energy market structure, the current state of energy prices and taxes, and recent developments and trends in fossil fuel support. Data and country notes for the EU Eastern Partnership (EaP) countries have been collected and prepared as part of the GREEN Action Task Force.
<img src="https://assets.oecdcode.org/ilibraryres/img/eufunded-banner3.png" class="img-responsive" style="width:80%; padding-bottom:5px;" alt="EU Funded Note"/>The Environmental Tax Policy Review of Andalusia provides a detailed review of the environmentally related tax framework in the areas of greenhouse gas emissions and air pollution, water usage and pollution, and waste and circular economy in the Autonomous Region of Andalusia, Spain. For each thematic area, the study identifies the scope for action at the regional level, assesses how Andalusia’s existing environmentally related taxes align with environmental tax policy principles and provides strategic recommendations to support Andalusia to improve environmental outcomes and enhance national and global environmental performance.
The transition to climate neutrality requires cost reductions in existing clean technologies to enable rapid deployment on a large scale, as well as the development of emerging technologies such as green hydrogen. This policy paper argues that science, technology, innovation, and industrial (STI&I) policies focusing on developing and deploying low-carbon technologies are crucial to achieving carbon neutrality. It notes however that the current level of innovation is insufficient to meet the net-zero challenge due to a policy emphasis on deployment rather than research and development (R&D) support. The paper explores the rationale for more ambitious STI&I policies targeted at R&D for climate neutrality and provides policy recommendations for an effective innovation policy for net-zero, including its interaction with the broader climate policy package.
This paper reviews different methods for assessing and comparing across countries the impact of climate change mitigation policies and policy packages on emissions. Broadening and deepening past and recent mitigation policies’ stocktaking efforts, as well as mapping them to their emission base, is key to comparing pricing and non-pricing policies and feed comparable information to ex-post empirical and ex-ante analytical models. Ex-post empirical approaches can provide benchmark estimates of policies' effectiveness from past data and furnish key parameter estimates to calibrate ex-ante analytical models (partial equilibrium, general equilibrium and integrated assessment models). Moreover, they can complement ex-ante analytical models by empirically validating their assumptions and informing models’ choices. Ex-ante analytical modelling are well suited to provide long-term forward-looking projections also on yet-to-be implemented policies. Sector specific models, such as energy system models, are well suited for a granular assessment of the impact on emissions of a wide range of price- and non-price-based policies. Outputs from the ex-ante sector-specific models can then feed into a Computable General Equilibrium model to quantify the effect of individual policies and policy packages on emissions, taking into account second order effects and reducing the risk of double counting the effect of policies.
In this blog, Daniel Nachtigall highlights a growing number of countries strengthen their emission reduction pledges by updating their Nationally Determined Contributions (NDCs) or by pledging carbon neutrality targets towards mid-century. But with the increasing urgency of the climate crisis, what are countries actually doing to implement these targets and how has the climate policy landscape evolved over the last decade or so?
Tackling methane in the coal sector is a major opportunity for climate action that can also strengthen energy security. Experience shows that there are several steps countries can take today – using existing technologies and tools – that can lead to significant reductions in methane emissions from coal mining. This report highlights the lessons learned in different coal-producing jurisdictions to support the development of smart and effective methane regulation. It then provides detailed guidance on the process of designing, drafting and implementing new regulations. Finally, it discusses the different regulatory approaches currently in use for methane, with the aim of providing a comprehensive toolkit for policy makers.
This paper lays out an approach, and a research agenda, for assessing the impact of carbon pricing on household budgets. It relies on a rich set of available data and policy models and combines them in a way that is informative for mapping the gains and losses at the household level in the short term as countries transition to a low-carbon economy. After accounting for direct burdens from higher fuel prices, indirect effects from higher prices of goods other than fuel, and households’ behavioural responses, overall burdens are only mildly regressive. Recycling carbon-tax revenues back to households allows considerable scope for avoiding or cushioning losses for large parts of the population, and existing policy models can be used to design compensation measures that facilitate majority support for carbon tax packages.
In spite of progress made to date and the significant long-term ambition announced by many countries, climate policy actions remain insufficient to meet the Paris Agreement objectives. While several international initiatives aim to track and monitor climate policies, there is not yet a “go to” place for a comprehensive inventory of policy actions and best practices worldwide. Such a platform would also ideally serve to compare policies’ effectiveness reflecting the diversity of country circumstances. Progress in this direction would help to promote an ambitious but globally more coherent and better-coordinated approach to emission reductions through a broad range of policies. This report lays out a roadmap for data and analytical work to support this aim, with a view to enhancing global dialogue and building trust on issues spanning climate change mitigation policies and their macro-economic repercussions. Key elements to strengthen the assessment and comparison of countries’ climate change mitigation policies across countries include: broadening and deepening the stocktaking of mitigation policies; extending and agreeing on an operational methodology for estimating the impact of these policies on emissions and on potential metrics to compare them; and assessing the broader economic effects of different climate policies.