Green Growth OECD – CANADA 50 YEARS 3 rd June 2011 Simon Upton, Director, Environment.
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Transcript of Green Growth OECD – CANADA 50 YEARS 3 rd June 2011 Simon Upton, Director, Environment.
Green Growth OECD – CANADA 50 YEARS
3rd June 2011
Simon Upton, Director, Environment
Growth & development
Wealth and GDP (2005 US$ per capita, wealth on bottom axis)
Low income
Middle income
Growth – not just a developing country concern
JobsDebtDemographics
The need for green
2050
World GDP (2005, PPP)USD 300 trillion
2030
USD 150 trillion
2010USD 70 trillion
1990
Food + 35%
Energy + 37%
Resources + 70%
Source: OECD Source: Global Footprint Network
Risks in not going green: bottlenecks
Source: World Bank Source: OECD.
Risks in not going green: shocks to food supply
Production +35%
Land +6%
Land at risk of erosion + 17%
By 2030, business as usual:
Biodiversity loss(2000-2030)
Pressures on natural capital
Water scarcity +30%
% mean species abundance loss
Source: OECD
Risks in not going green: water scarcity
Living with risk of water scarcity (millions of people under water stress)
Source: OECD
Risks in not going green: pollution and human health
Premature deaths from PM10 exposure(per million inhabitants)
Source: OECD
Risks in not going green: systemic risks
GHG emissions and climate change(per million inhabitants)
Costs of climate change(% loss, present value of consumption)
Source: OECD (see e.g. OECD (2008) “Costs of Inaction”) and UK Treasury “Stern review”
Better measurement: the capital base of economies
Source: Arrow et al (2009) in NBER WP 16599
Capital stock shares
Better measurement for better policy choices
Cost of GHG mitigation: GDP and GDP+
Source: OECD
Growth from green perspective
The gap in 2050 = 4%
Direct cost of GHG mitigation
Source: OECD
Structural reforms
Green Fiscal Reform
US
New Zealand
Japan
Ireland UK
Switzerland
Greece
Sweden
Netherlands
Revenue from taxes on energy, CO2 and other pollutants, % of GDP, 2008. Excludes vehicle taxes
Def
icit
imp
rove
me
nt t
o st
abili
se d
ebt
by 2
025
, %
of
GD
P
Current environmental taxes
Tax revenue, % of GDP
Improving resource management
Source: “Sunken Billions”, FAO World Bank
Revenue, 2004
$78 billion
$50 billion
$10 bn+
Over-exploited(31%)
Fully-exploited(53%)
State of catch fisheries, 2008
Under-exploited(16%)
Operating deficit, $5 billion
Subsidies
Economic loss
Source: FAO
Source: Joint OECD/IEA analysis
Removing fossil fuel subsidiesIncome gains from unilateral subsidy removal (% change in HH income vs BAU)
USD 115 billion, 2009 investment in renewables
10% less emissions globally
from removal of fossil fuel subsidies
USD 312 billion2009 , developing country fossil fuel consumption subsidies
?
Reframing environmental challenges
Regulation and diffusion of ICT
US
UK
Sweden
Germany
Belgium
France
Greece
Spain
Canada
ICT
inve
stm
ent
% o
f to
tal,
ave
rag
e 1
99
5-2
00
3
Regulation in ICT-using sectorsAverage1995-2003
Source: OECD
Overcoming inertia
Lifespan of capital investments
Rents embodied in
fossil fuel reserves
Sunk capital
USD 16 trillion
USD 6.7 trillion
World GDP
Costs of moving too slow
300GW retired early (loss > USD 70 billion)
Coal-fired generation capacity, IEA 450ppm scenario
Response to prices
-20
0
20
40
60
80
100
120
140
160
180
0 100 200 300 400 500 600 700 800 900
SE
K p
er k
g N
Ox
Emission intensity in kg NOx per GWh
1991 1992 1994 1996
Marginal Abatement Cost Curves of Taxed Emitters
NOx Tax in Sweden
Source: OECD
It’s ok to imagine new patterns of growth and innovation
Source: Merrill Lynch
Green Growth framework
