Climate Action Story

Governments spend some USD 340 billion a year supporting the production and use of fossil fuels through direct subsidies and tax rebates. This is a substantial amount – comparable in size with the GDP of some countries. It is public money that could be spent on other priorities, including promoting and developing clean energy infrastructure. In fact, the amount invested globally in renewable energy was lower, at some USD 310 billion in 2017.

Shifting investment into low-carbon options could increase global GDP by roughly 5% by 2050, if we take into account the creation of new opportunities and the avoidance of the human and capital costs of climate change, from air pollution, coastal flooding, storm damage, drought and more.

Mobilising public and private resources across the financial spectrum is essential to generate the trillions of dollars needed for sustainable infrastructure, and to support capacity-building in developing countries and poorer communities. Public finance institutions, banks, institutional investors, corporations and capital markets all have a crucial role to play.

The good news is that the money is there. But we need to ensure that it is channelled to the right places. The estimated USD 2.5 trillion needed each year for developing countries to meet the challenge of financing infrastructure for the Sustainable Development Goals (SDGs) represents less than 1% of available global financial assets. Financing and maintaining dirty, fossil-fuel based plants and infrastructure would also cost many trillions of dollars. Together we must use policy levers such as pricing to redirect this finance away from unsustainable sources to ones that can help meet climate goals.

Governments must ensure that finance is aligned with achieving the rapid and radical transformations required, that it boosts innovation, and that inequalities are not aggravated.

Acting to curb climate change is affordable and will generate savings, particularly if we act now.

Report: Climate Finance Provided and Mobilised by Developed Countries in 2013-17 (2019)

We have the financial resources

REPORT: The Trillion Dollar Question: How Can Sustainable Finance Tackle Climate Change, Biodiversity And Other Sustainable Development Goals? (2019)

REPORT: Investing in Climate, Investing in Growth (2017)

REPORT: Financing Climate Futures: Rethinking Infrastructure (2018)

ARTICLE: Mobilising bonds Markets for a Low-carbon Transition
(2017)

INSIGHTS FROM THE OECD

ARTICLE: Transformative change for a new climate economy

Helen Mountford, Director, New Climate Economy Project (8 minutes read)

ARTICLE: Moving beyond a future of fear and frustration: just transition will enable ambitious climate action

Sharan Burrow, General Secretary, International Trade Union Confederation (5 minutes read)

PODCAST: The world of climate-friendly business

Bertrand Piccard, Initiator and Chairman of Solar Impulse (14 minutes)

PERSPECTIVES

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LIST OF 25 ACTIONS

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Governments, businesses, NGOs and citizens must come together to build a cleaner, healthier and more prosperous world for the next generation, and for today.

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Explore the
OECD's full resources on climate change

INSIGHTS FROM THE OECD

KEYNOTE: Reclaiming our Common Future, OECD Secretary-General Angel Gurría (July 2019)

ARTICLE: We need leaders to act in service of future generations

Mary Robinson, Founder, Mary Robinson Foundation Climate Justice (3 minutes read)

TIMELINE: Milestones in the discovery of global warming

Spencer R. Weart, Historian and Author, “The discovery of global warming”

SDG PATHFINDER: Access additional analysis and data to inform action on sustainable development.

VIDEO: What’s the plan to address climate change?

Anuna de Wever, Co-Founder, Youth for Climate Belgium (44 seconds)

PERSPECTIVES

"I'm only a child and I don't have all the solutions, but I want you to realise, neither do you!" Severn Cullis-Suzuki, a 12-year-old from Canada, delivered these words not in the fervour of recent youth climate protests, but at the first Earth Summit held in Rio de Janeiro in 1992. She was part of the Environmental Children’s Organisation, which raised the money to travel to Rio to call on adults to work together to save the planet.

Now, some three decades later, Ms Cullis-Suzuki is an active supporter of Greta Thunberg, a 16-year-old Swedish schoolgirl who has become a voice for millions of young people around the world by calling on our governments to fulfil long-held promises on climate change.

Commitments by OECD countries to address climate change go back to the Rio Earth Summit and to its treaty, the United Nations Framework Convention on Climate Change (UNFCCC). But despite agreeing on targets at landmark summits since then, and setting sustainable development as an overarching goal, our governments have advanced much too cautiously, both in terms of solar and wind power investment and in reducing economic dependence on fossil fuels.

The financial shock of 2008 created an opportunity to change for the better. Climate was placed at the heart of the OECD’s Green Growth Strategy in 2009-11, while OECD Secretary-General Angel Gurría advocated strong climate action and from 2013, outlined a path towards zero emissions.

By the time of the 2015 Paris Climate Agreement, optimism was running high, with international co-operation encouraging everyone forward. The cost of solar and wind energy was tumbling, cities around the world were planning for cleaner forms of transport, and individual countries were setting out ambitious climate paths. But since then, the earth’s climate has continued to warm, adding extra urgency to meeting, if not beating, our globally agreed targets.

The 2019 UN Climate Change Conference, COP25, in Madrid in December offers a chance to lift momentum. It is time for our countries to get on track to meet their targets and deliver the zero-carbon future we all need and deserve.

Commitments matter, for trust, prosperity and well-being. By honouring them, we can relaunch momentum and get on track.

It’s time to deliver on climate commitments

25 actions that will get us back on track by 2025

These range from regulation, energy-related taxes, carbon pricing and government incentives for green technology, to public and private investment in low-carbon resilient infrastructure, corporate responsibility and individual lifestyle choices.

By addressing the 5 key emitting sectors using 5 concrete policy levers, we list 25 policy actions that can spur strong climate action coherently and fairly, and get us all on track by 2025.

We can act on some challenges today, for example, by ending inefficient fossil fuel subsidies and putting a price on carbon, including for international flights and shipping. Others require innovation in technology, to better manage overall energy systems, for instance. Many will contain trade-offs for policymakers to consider, but all have solutions.

We already have many of the solutions we need to start decarbonising our economies today.

We have the knowledge and the tools to make it happen

By focusing our efforts on these 5 sectors, we can address emissions at the source, disentangle our world from fossil fuels, and make the transition to clean energy as affordable, fair and smooth as possible.

OECD countries continue to rely heavily on fossil fuels for 80% of their energy needs. This needs to change.

To be consistent with the Paris Agreement, we have estimated that global investments in clean energy infrastructure need to reach some USD 6.9 trillion annually. That is only 10% more than in a business-as-usual case dominated by carbon-intensive fuels such as coal and oil. Moreover, this increase would likely be offset by fuel savings, which would amount to USD 1.7 trillion by 2030.

It is therefore feasible for every country to invest less in fossil fuels and more in clean energy alternatives.

Moreover, public and private investments must be channelled to favour low-emissions production, climate-resilient technologies and sustainable infrastructure.

We know that agriculture, buildings, electricity, industry, and transport are the main sources of greenhouse gas emissions.

By focusing on 5 sectors, we can tackle up to 90% of emissions

Let's start with 5!

5 Economic Sectors

5 Policy Levers

INFORM
& EDUCATE

LEAD BY EXAMPLE

TAX & SUBSIDISE

REGULATE

INVEST

TRANSPORT

INDUSTRY

ELECTRICITY

BUILDINGS

AGRICULTURE

Agriculture uses 40% of the world’s land surface and directly accounts for 12% of global greenhouse emissions, including methane from livestock farming, nitrous oxide from manure and fertilisers, and a further 9% from land-use change, including deforestation.

Focusing on agriculture and related land-use change will be critical to reduce emissions, and can help replenish our forests and reverse biodiversity loss. There is also potential to use agricultural soils to capture more carbon.

Helping agriculture cut its greenhouse gas emissions could be part of global programmes to achieve the sustainable development goals. Meeting the triple challenge of environmental sustainability and health, affordable food, and good livelihoods for farmers and their communities means making the right choices and managing trade-offs. This will require national and local action, as well as global co-operation.

BUILDINGS

Buildings generate 6% of direct global greenhouse emissions, and an additional 12% of greenhouse gas emissions from electricity use. The residential sector is responsible for nearly two thirds of building emissions, the bulk of which relates to energy demand from home and water heating, cooking and cooling. Emissions from all end-uses must also be addressed. Policies to improve building quality, including environmentally friendly insulation and materials, should be stepped up.

For new buildings, construction technologies and methods are much more climate friendly and energy efficient than before, and are becoming in many cases cheaper than conventional construction. Existing buildings can also be made more efficient, through renovation and retrofitting.

Building location also matters with respect to emissions: better accessibility to services and opportunities means less travel on a daily basis. Green space near buildings helps capture carbon, enhances air quality and increases well-being. This underlines the role of urban, transport and wider land-use planning to develop more climate-friendly neighbourhoods.

ELECTRICITY

Electricity generation is the single largest contributor to greenhouse gas emissions, with many countries still using fossil fuels, particularly coal, to produce electricity. New coal plants are still being built and planned. Emissions from electricity rose by 2.5% in 2018 after having plateaued in the previous six years, despite improvements in energy efficiency and increasing deployment of renewables. Policies to boost the development of clean electricity are essential.

Government strategies must emphasise decarbonising the electricity sector while providing affordable and reliable supply of electricity for all. Renewable technologies are already cost-competitive with fossil fuels in an increasing number of countries.

A transition to low-carbon electricity should create vast numbers of jobs: in 2018 alone, the renewable energy sector employed 11 million people globally.

INDUSTRY

Industry is behind 21% of global greenhouse emissions, which are rising because of urbanisation, population growth and increased standards of living. Most of these emissions come from heavy industries, which produce steel, chemicals, fuels, etc. These industries are hard to decarbonise given their need for high energy intensity.

Efforts must be stepped up to find and implement solutions as the global usage of primary materials like iron and steel, cement, aluminium, glass, ceramics, chemicals, pulp and paper, and petrochemicals, is set to nearly double by 2060. Mining and extraction processes are also energy intensive and must be addressed.

Research and innovation will need to be scaled up. Re-use and recycling of materials, improvements in manufacturing efficiency, the expansion of service industries and of 3D printing will all help lower emissions, while shifts to low-carbon transport, electricity and buildings must be encouraged.

TRANSPORT

Emissions from road, rail, aviation and shipping have grown faster than in any other sector in the past 50 years. Today they account for about 14% of total CO2 emissions and are responsible for 24% of all human-made CO2 emissions.

Transport relies on oil for 94% of its energy. Decarbonising passenger mobility and freight transport requires a mix of policies, from pricing and regulation to investment. Innovative technologies, services, processes and regulations are also needed to make cleaner alternatives more accessible and affordable, and to spur a mass shift in use. Crucial to this process is integrated land-use and transport planning that reduces distances between people and opportunities and that encourages public transport, cycling and walking.

Reducing emissions from transport would also greatly improve air quality in our cities, in which over half the world’s population now lives. In 2015, around 3.2 million people died from air pollution, which weighs heavily on the costs of healthcare.

INFORM & EDUCATE

Your government can step up educational programmes, public information campaigns, at school, at home, in the workplace and in town halls, to raise awareness and inspire each other to act.

INVEST

Your government can fund research and development in innovation to boost greener technology and clean infrastructure, and stimulate new economic activities.

REGULATE

Your government can regulate to control emissions, and constrain, and if necessary, ban polluting activities and chemicals that are toxic for people and the environment.

TAX & SUBSIDISE

Your government can adjust taxes and subsidies to promote the transition, for instance by applying carbon taxes on emissions, cutting support for carbon-based fuel, or subsidising innovation and energy conservation.

LEAD BY EXAMPLE

Your government can, through its own daily actions, promote environmentally responsible management of public administrations, nationally and locally, as well as greener subcontracting and rules of conduct for public officials.

REPORT: Aligning Development Co-operation with Climate Action (2019)

REPORT: Accelerating Climate Action: Refocusing Policies through a Well-being Lens (2019)

DATA: OECD Environment at a Glance Indicators (2019)

INSIGHTS FROM THE OECD

PODCAST: Reducing emissions will immediately make us healthier

Rich Fuller, Founder and President of Pure Earth (17 minutes)

SDG PATHFINDER: Access additional analysis and data to inform action on climate change.

VIDEO: Climate change is within our control

David Wallace-Wells, Journalist and Author, “The Uninhabitable Earth” (48 seconds)

PERSPECTIVES

The world is warming more quickly than anyone expected. Many scientists project the planet will be at least 1.5 degrees Celsius warmer by around 2050, or even earlier, relative to pre-industrial levels.

Such a prospect is not tenable for our well-being or our prosperity. Nor is it inevitable. We know what is causing climate change and we have the tools we need to make deep cuts in greenhouse gas emissions. We can and must act now.

Nearly three quarters of CO2 emissions come from human activities and have recently begun rising again. Other greenhouse gases, like methane and nitrous oxide, are also on the rise. Human activity is the main cause of climate change. It is also the source of the solution.

Climate action will improve our well-being in many other ways too, from cleaner air and healthier diets to less time spent in traffic jams. Clean transport and green spaces will free up our congested cities, teleworking will make commuting a choice rather than a chore, and new opportunities, jobs and businesses will be created.

We are already seeing signs of progress around the world. We must now make it happen for everyone.

Climate change poses a challenge for us all, which makes international co-operation so essential. Governments, businesses and citizens can work together to cut greenhouse gas emissions at the source, while enabling everyone, including the poorest and most vulnerable among us, to benefit at the same time.

Climate change is already affecting lives and livelihoods everywhere. With urgent and determined action, we can tackle climate change and make a better world for our children.

Acting now means we can improve our health, well-being and prosperity

REPORT: Aligning Development Co-operation with Climate Action (2019)

REPORT: Accelerating Climate Action: Refocusing Policies through a Well-being Lens (2019)

DATA: OECD Environment at a Glance Indicators (2019)

INSIGHTS FROM THE OECD

PODCAST: Reducing emissions will immediately make us healthier

Rich Fuller, Founder and President of Pure Earth (17 minutes)

SDG PATHFINDER: Access additional analysis and data to inform action on climate change.