Reports

This paper explores the nexus between decarbonisation and intergovernmental fiscal relations, focusing on related challenges and reform options. It highlights the significant role of subnational governments in tackling climate change. Subnational and national governments share responsibilities in areas such as taxation, spending and regulation pertaining to environmental protection, as well as climate change mitigation and adaptation, which calls for effective intergovernmental co-operation to align policy objectives and implementation strategies. The paper outlines decarbonisation requirements across sectors and discusses subnational government involvement in service delivery, investment, revenue generation and regulatory frameworks. Policy options to strengthen subnational contributions to national decarbonisation goals are presented. While focusing primarily on OECD countries, the paper acknowledges the need for improved information on subnational decarbonisation efforts in both advanced and developing countries.

Colombia has prioritised the use of renewable energy to expand and improve electricity services for its population in zones non-interconnected to the national grid. Recent policies and regulations have supported this ambition with successive measures to strengthen investment conditions for distributed renewable energy, like standalone solar photovoltaic (PV) solutions and hybrid solar PV mini-grids. Still, the distributed renewable energy market in non-interconnected zones is relatively immature, reflected by the high costs for connecting new users. New business and financing models will be critical to bringing down the cost of renewable energy technologies, accessing private equity and debt in larger volumes, and ultimately progressing towards replacing existing inefficient and polluting diesel generation systems. Building on international experiences, this paper discusses approaches to strengthening investment conditions, looking at support mechanisms and de-risking instruments used elsewhere, which can help bridge the financing gap in Colombia.

The growing demand for raw materials in the Hungarian economy projected up to 2050 is expected to exert significant additional pressure on the environment, putting the country at risk of missing important environmental goals and opportunities to strengthen the competitiveness and resilience of its economy. Despite the notable progress in decoupling environmental pressures from economic activities over the past 20 years, several challenges remain. The transition to a circular economy has significant potential to address these challenges. To fully realise the circular potential of its economy, Hungary will need to adopt a comprehensive circular economy policy framework. This report outlines a set of key elements for the development of the Hungarian national circular economy strategy and action plan. It identifies priority areas that are deemed critical to the Hungarian circular economy transition, including: biomass and food, construction and plastics, as well as cross-cutting horizontal tools to facilitate an economy-wide circular transition. It also provides 45 policy recommendations and suggests specific implementation actions across the priority areas for the short, medium and long term.

The report Measuring Progress towards Inclusive and Sustainable Growth in Japan is the outcome of a collaboration with the Japanese Ministry of Economy, Trade and Industry which aims to monitor progress in key areas crucial to realising the Japanese government’s vision for a 'New Form of Capitalism'. Building on the OECD Framework for Policy Action on Inclusive Growth, the report includes a set of key indicators to support measures for the government to deliver on its vision as well as inform on best practices in other major advanced economies. A central message is that creating the equality of opportunity in Japan requires a balanced approach of taking both efficiency and equity concerns into account. The report presents the main dynamics for policy consideration to strengthen sustainability of the Japanese growth model, with due attention paid to specific issues that matter for different groups of Japanese population. Underpinned by rigorous statistical analysis at a sufficiently disaggregated level, the report helps to better understand some of the main drivers of well-being and economic success in Japan.

This Policy Insights presents the main findings from the report Measuring Progress towards Inclusive and Sustainable Growth in Japan, which provides robust metrics to monitor inclusive growth and help assess the distributional impacts of policies in line with the government’s vision for a 'New Form of Capitalism'. Underpinned by rigorous statistical analysis at a sufficiently disaggregated level, this work helps to better understand some of the main drivers of well-being and economic success in Japan.

This report presents policy reform options to support Lithuania in meeting its climate neutrality target. It takes stock of Lithuania’s current and planned climate policies and assesses their potential for meeting the country’s climate ambitions. The report details the results of modelling carried out to assess the effectiveness of different policy scenarios, an analysis of carbon pricing and the role of innovation, an assessment of financial needs in the transition to net zero, and an analysis of the distributional implications of carbon pricing. Bringing together these findings the report offers recommendations for policy reform, highlighting the importance of setting price signals complemented by innovation support, as well as the potential of revenue recycling options in alleviating distributional concerns.

The iron and steel sector accounts for almost 8% of global emissions, making it one of the highest emitting industry sectors with around 30% of industrial carbon emissions. Decarbonising the steel sector is therefore key to achieving climate goals. This report, prepared for the 2023 Japanese G7 Presidency, demonstrates that considering the heterogeneity of steel industries is vital for reaching climate goals and for a just and inclusive transition to a low-carbon future. The report maps the heterogeneity of global steel industries, highlighting the differences between them in key areas relevant to decarbonisation. Additionally, it examines how these differences should be considered when developing definitions for near-zero and low-emissions steel production, as well as emissions measurement methodologies and data collection frameworks.

Le Portugal a réussi à découpler plusieurs pressions environnementales de la croissance économique entre 2013 et 2019. Il a joué un rôle de premier plan dans l'approbation de la loi européenne sur le climat et a adopté la Loi-cadre portugaise sur le climat en 2021. Celle-ci doit être rapidement mise en œuvre pour atteindre la neutralité carbone d'ici 2050, améliorer la résilience aux effets du changement climatique et protéger les écosystèmes. Le Portugal a intensifié ses efforts d'adaptation, mais doit en faire davantage pour faire face aux multiples menaces, notamment l'érosion côtière, les inondations, les sécheresses et les feux de forêt. Le pays est à la traîne en matière de gestion des déchets. Par ailleurs, l'augmentation des prélèvements d'eau douce dans les régions du sud, où l'eau est rare, est préoccupante. Il s'agit du quatrième examen des performances environnementales du Portugal. Il fournit une évaluation, fondée sur des faits, des progrès du pays vers ses objectifs environnementaux au cours de la dernière décennie. Les 26 recommandations visent à aider le Portugal à améliorer ses performances environnementales, en accordant une attention particulière à la neutralité carbone. La présente version abrégée contient le résumé, de même que l’évaluation et les recommandations officielles du rapport. Le rapport complet est disponible en anglais sur le site web de l’OCDE.

The EU Water Framework and Floods Directives have not only set the level of ambition for water resources management in Europe, but have also provided a model for other regions in the world. Effective implementation of the Directives requires that due consideration be given to their economic pillar, designed to support a cost-effective approach in member states and communities. Recent reviews indicate that there is considerable room to improve the integration of water economics within the framework of water resources management. This report captures the lessons learned from five thematic workshops co-convened by the OECD and the European Commission. It provides an overview of the challenges faced by EU member countries and opportunities to strengthen the economic approach of water resources management in Europe. Covering cost recovery, polluter pays principle, water scarcity, planning and financing, the lessons are relevant for regions and countries across the globe.

India, the Lifestyle for Environment (LiFE) initiative aims to encourage the adoption of sustainable lifestyles in India and internationally to tackle the challenges of environmental degradation and climate change. This report examines how India has integrated several policies in its energy transition strategy that are aligned with the LiFE initiative, highlighting the potential for behavioural change and consumption choices to help advance energy transitions globally. It then analyses the impact on energy consumption, costs and emissions of measures like those proposed by the LiFE initiative, such as buying an EV or taking public transport, if they were adopted globally. Finally, it considers how India’s first G20 Presidency could strengthen the LiFE initiative by anchoring it in the G20’s current framing of energy transitions and initiating processes to gather experience and best practices of policies and programmes that G20 members are already conducting.