OECD ministers plead for environment despite economic concerns

Yahoo News 29 Apr 08;

OECD environment ministers on Tuesday stood by efforts to tackle climate change, despite arguments in some quarters that at a time of economic uncertainty, spending on green issues could damage competitiveness.

In an "excellent and lively debate" over two days, ministers reasserted the goal of addressing global warming and outlined some of the challenges as to how to cut greenhouse-gas emissions in a border-free worldwide market, the Organisation for Economic Cooperation and Development (OECD) said in a statement.

"Ministers noted that tackling climate change and moving towards low-carbon economies is a shared ambition, but moving to a low-carbon society will require structural shifts in the economy," it said.

"This can create opportunities, but also competitiveness challenges (though often overstated), for particular industries, sectors and workers."

It added: "The competitiveness impacts are most likely to be reduced if strong international cooperation and common policy frameworks can be agreed."

The UN's Intergovernmental Panel on Climate Change (IPCC), gathering top climate scientists, last year urged rich countries to slash their emissions by 25-40 percent by 2020 compared with 1990 levels.

Only one major economy -- the European Union (EU) -- has made a specific pledge along these lines. It has has set its sights on a 20-percent cut by 2020, and offered to deepen this to 30 percent if other developed countries follow suit.

The United States is the most vocal economy in expressing concerns about the cost of meeting tough, specific targets. Reducing fossil-fuel emissions carries a cost in terms of improving fuel efficiency and converting to cleaner energy sources.

All the rich economies, though, are concerned about "carbon leakage," meaning that corporations may flee tough regulations in advanced economies and redeploy to poorer countries where regulations are less stringent.

In a speech on Monday, OECD Secretary General Angel Gurria urged governments to ignore arguments that green reforms damage overall competitiveness.

"We found no convincing evidence that environmental policies to date have harmed competitiveness at a macro-economic level," he said.

"There may be negative impacts on specific firms, sectors or regions, but these tend to be compensated by positive effects elsewhere in the economy... these impacts can be managed with 'smarter' policy design."

In its 2008 Environmental Outlook, issued in March, the OECD projected that world GDP would almost double by 2030. Without new policies, greenhouse-gas emissions would grow by 37 percent, it warned.

To peg the emissions increase to only 12 percent would cost little more than one percent of the world GDP growth, however.

The Paris environment ministers' meeting gathered members of the rich nations' club, as well as those from four countries (China, Estonia, Israel and Slovenia) that are bidding to join it, and "partner countries" comprising Brazil, China, Indonesia and South Africa.

The final communique mentioned that ministers discussed plans for addressing climate change beyond 2012, when the current commitments of the UN's Kyoto Protocol run out.

Tough negotiations on a post-2012 treaty are unfolding within the UN Framework Convention on Climate Change (UNFCCC), with the goal of wrapping up a new deal by the end of 2009.