Green Growth Strategy Defining Green Growth 30 May 2011

1. Green Growth Strategy Defining Green Growth 30 May 2011 Nathalie GIROUARD Green Growth Strategy Coordinator, OECD

2. The Green Growth Strategy • Requested by Ministers of Finance, Economy & Trade, at the 2009 OECD Ministerial Council Meeting (MCM). • Multi-disciplinary inter-governmental process, involving 25 OECD Committees: delegates from Ministries of Finance, Economy, Environment, Agriculture Development Co-operation, Industry, etc. • Key deliverables in May 2011: • Synthesis Report: Towards Green Growth • Toolkit: Tools for delivering on green growth • Communication from the “Freedom of Investment Roundtable” • Indicators Report: Towards Green Growth: Measuring Progress – OECD Indicators

3. ‘Towards Green Growth’: structure (1) Greener growth The need for green growth strategies • Reframing growth • Green growth dividends: fostering new markets and activities; raising resource efficiency • Systemic risks and imbalances • Policy design considering cross-country differences • Market instruments: taxes and permits, subsidies • Regulations and the regulatory environment • Measures for enabling changes in consumer behaviour • Innovation policies • Investing in infrastructure: energy, transport, water • Institutional and governance arrangements Policy framework for green growth Promoting the transition • Ensure smooth and just labour market transition • Address distributional concerns of firms and households • Promote international co-operation for green growth

4. ‘Towards Green Growth’: structure (2) Greener growth Measuring progress • Measurement framework and principles • Emerging messages: relative but not absolute decoupling • Other measurement issues, e.g. availability of internationally comparable data • Mainstream green growth policies in government policies, e.g. green growth toolkits • Identify country-specific policy priorities, e.g. country reviews, GG reports for emerging and developing economies • Issue-specific and sector-specific studies, e.g. food and agriculture, energy sector, water, etc Delivering on green growth

5. What is green growth? (1) • Green Growth and Sustainable Development: • Sustainable development provides important context for green growth • Green growth as a subset of sustainable development: narrower; an operational policy framework to help achieve concrete, measurable progress • Green growth focus on fostering innovation, investment and competition that can give rise to new sources of economic growth • Green growth strategies need to pay attention to social issues and equity concerns as a result of greening the economy Green growth means fostering economic growth and development while ensuring that natural assets continue to provide the resources and environmental ervices on which our well-being relies. It catalyses investment, competition and innovation which will underpin sustained growth and give rise to new economic opportunities.

6. What is green growth? (2) Decoupling trends – CO2 and GHG emissions 1. Real net national income for OECD, and real gross national income for BRIIC. Source: OECD-IEA, UNFCCC

7. Green growth can open up new sources of growth • Enhanced productivity • Innovation • New markets • Boosting confidence • Macroeconomic stability Green growth can reduce risks of negative shocks to growth from: • Resource bottlenecks • Imbalances in natural systems

8. Key environmental challengesAir pollution, water stress, biodiversity loss, GHG emissions

9. The essentials of green growth policies General points • Governments need to draw from a wide menu of policies • Involve a mix of policy instruments which differ across countries • Central element is to put a price on pollution or on the over-exploitation of scarce natural resources Criteria for choosing the policy mix • Cost-effectiveness • Effectiveness in stimulating innovation and technology adoption • Effectiveness in ensuring adoption and compliance incentives

10. The green growth policy toolkit • Policies that mutually reinforce green and growth • Policies to encourage innovation including adequate IPRs • Labour and product market policies facilitating entry/exit/reallocation • Growth conducive tax structures • Openness to trade and investment • Policies specifically aimed at greening growth Price-based instruments • Environmental taxation • Emission trading systems, emission credit systems • subsidies Non-market instruments • Regulation • Standards • Active technology support • Information-based measures • Voluntary agreement

11. A framework for green growth indicators

12. Directions for future work

13. The Timeline Europe 2020 Agenda Green GrowthRoundtable Interim Report Synthesis Report & Indicators Report OECD Green Growth Workshop UN COP 16 Rio +20 12/10 05/11 06/10 12/10 02/11 2012 Green Growth Reports on Partner Countries (Brazil, China, India, Indonesia, South Africa) Country Economic Surveys and Environmental Performance Reviews (Green Growth chapters) Mainstreaming green growth in OECD work program

14. International Green Growth Dialogue online community A secure site for sharing your perspectives and initiatives, and discussing the development of the Green Growth Strategy. To register, email your contact details to: green.growth@oecd.org Join the discussion!