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Green Growth OECD – CANADA 50 YEARS 3 rd June 2011 Simon Upton, Director, Environment.

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Presentation on theme: "Green Growth OECD – CANADA 50 YEARS 3 rd June 2011 Simon Upton, Director, Environment."— Presentation transcript:

1 Green Growth OECD – CANADA 50 YEARS 3 rd June 2011 Simon Upton, Director, Environment

2 Growth & development Wealth and GDP (2005 US$ per capita, wealth on bottom axis) Low income Middle income

3 Growth – not just a developing country concern JobsDebtDemographics

4 The need for green 2050 World GDP (2005, PPP) USD 300 trillion 2030 USD 150 trillion 2010 USD 70 trillion 1990 Food + 35% Energy + 37% Resources + 70% Source: OECDSource: Global Footprint Network

5 Risks in not going green: bottlenecks Source: World Bank Source: OECD.

6 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

7 Risks in not going green: water scarcity Living with risk of water scarcity (millions of people under water stress) Source: OECD

8 Risks in not going green: pollution and human health Premature deaths from PM10 exposure (per million inhabitants) Source: OECD

9 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”

10 Better measurement: the capital base of economies Source: Arrow et al (2009) in NBER WP 16599 Capital stock shares

11 Better measurement for better policy choices Cost of GHG mitigation: GDP and GDP+ Source: OECD

12 Growth from green perspective The gap in 2050 = 4% Direct cost of GHG mitigation Source: OECD Structural reforms

13 Green Fiscal Reform US New Zealand Japan Ireland UK Switzerland Greece Sweden Netherlands Revenue from taxes on energy, CO 2 and other pollutants, % of GDP, 2008. Excludes vehicle taxes Deficit improvement to stabilise debt by 2025, % of GDP

14 Current environmental taxes Tax revenue, % of GDP

15 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

16 Source: Joint OECD/IEA analysis Removing fossil fuel subsidies Income 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 billion 2009, developing country fossil fuel consumption subsidies ?

17 Reframing environmental challenges Regulation and diffusion of ICT US UK Sweden Germany Belgium France Greece Spain Canada ICT investment % of total, average 1995-2003 Regulation in ICT-using sectors Average1995-2003 Source: OECD

18 Overcoming inertia Lifespan of capital investments Rents embodied in fossil fuel reserves Sunk capital USD 16 trillion USD 6.7 trillion World GDP

19 Costs of moving too slow 300GW retired early (loss > USD 70 billion) Coal-fired generation capacity, IEA 450ppm scenario

20 Response to prices NOx Tax in Sweden Source: OECD

21 It’s ok to imagine new patterns of growth and innovation Source: Merrill Lynch

22 Green Growth framework

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