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Johannesburg summit Pollution People Poverty Progress "As we enter the new Millennium we must
make trade work for the poor."
Kofi Annan, UN Secretary General
Trade Justice
Following the success of the Jubilee 2000
campaign, many organisations are coming
together in a new global campaign for
trade justice.
We call for new trade rules to promote
sustainable developing by guaranteeing:
protection and support for poor producers
fairer markets for poor countries' products
effective regulation of international companies.
For more information
www.christianaid.org.uk/campaign/trade
ChristianTTAid We believe in life before death CONTENTS
Observer Contents No. 233 - AUGUST 2002
LETTERS ENERGY
Temporary job problems; Workable Tobin 35 Global warming: What comes after Kyoto?
tax Burton Richter
38 Trading in pollution EDITORIAL 39 Nuclear energy: Can it help? Interview with Luis Echdvarri 3 Sustainable development: Our common future 41 Renewables: Upwardly mobile DonaldJ. Johnston
Global sustainabiltty, page 8 SOCIETY NEWS BRIEF 43 Transport troubles 4 Trade fall eases?; IT outlook is not so dim; Peter Wiederkehr and Nadia Caïd Early check-up for business ethics; 46 EST: Blueprint for better transport Soundbites; Agricultural markets may recover; Russian visit; Development aid 47 Sustainable buildings holds steady Takahiko Hasegawa
SUSTAINABLE DEVELOPMENT BUSINESS VIEW
8 Back to the basics 50 Bye-bye, Miss American Pie Douglas Worth Simon Upton
10 Unsustainable risks Valli Moosa, South Africa's OECD.ORG 14 Roundtable: What ministers are doing environment minister.
South Africa; Finland; France; Mexico; U.S. Roundtable. page 14 52 Tax environment; NEPAD: A new partnership for Africa's development; For FOOD & FARMING safer transport; Fundamental sense: OECD Forum 2002; Public against terrorist 17 Rethinking agriculture and food financing; Blueprint for open government; Renate Kiinast Slovak Republic joins NEA
19 Sustainable agriculture depends on 54 OECD Ministerial Council 2002: biodiversity Partnership for growth and development Kevin Partis 55 Calendar 21 Integrating the Rio conventions in 56 Education: The door of hope development co-operation Extracts from speech by Laura Bush Food security and development, page 23 BOOKS
23 Sustainable food for all 37 Dealing with wretched excess; Better bus Tom Arnold je*«ia £&k& systems; Indian power; Smarter minds 25 Millennium Development Goals: 59 New publications Looking beyond the averages fan Vandemoortele DATABANK 27 For diversity in development strategies 9MHB ,.- «M$|g ^gSfflPSfc Kenichi Ohno 61 How green is farm support?; Unsustainable
28 Social vision habits; Lower-paid women; Semiconductor slide 30 Trade and environment: Striking a balance % / 62 Indicators Ronald Steenblik and Dale Andrew sunshine as a renewable
resource, page 41 32 Fish crisis: A problem of scale Carl-Christian Schmidt
34 Inconvenient flags A 1 oecd Observer
www.oecdobserver.org OBSERVER
Letters
Temporary job job satisfaction between would be zero and avoidance temporary and permanent would be practical!)' zero for the problems workers is quite small is currencies that are covered by the Observer disingenuous when temporary Tobin lax. The article. "Tackling some myths workers report (.elsewhere) that As to which currencies to tax, a www.occdobservev.org about temporary jobs" (OECD they are much less satisfied handful ol currencies dominate, © OECD 2002 Observer, No. 231/232), seeks to with pa}' and job security than such as the dollar, the euro and 2002 subscription raie: "re-balance" a debate which you permanent workers. They also the yen. Even exchanging -US$50 -£30 -¥5 900 consider to have been distorted ISSN 0029-7054 more often report inflexible work Indonesian rupiahs for Russian Tel.: +33 (0) 1 45 24 82 00 by unfounded assertions. schedules and monotonous Fax: 4-33 (0) I 45 24 82 10 rubles needs to go through such a [email protected] It appears to be based on the work tasks. vehicle currency So if these major That some workers make Founded in 1962 assumption that no one has a currencies were covered by the The magazine of the Organisation for good word to say For temporary a successFul transition from Tobin tax it would already be Economic Co-operation and Development employment. But on the contrary, unemployment or inactivity to nearly global. Also, il only one OECD Publications the view that temporary work is secure labour market status via major currency is outside of the 2 rue André-Pascal 75775 Paris cedex 16, France of some advantage, to employers temporary work, while certainly Tobin net, even the US, then if [email protected] at least, is commonplace. As you true, is not on its own a everyone else is covered by the www.oecd.org note, it increases labour market conclusive argument in favour tax, US dollars traded would be Published in English and French taxed as well. by OECD and Financial Times Business Ltd, Flexibility by making it easier of temporary work. Some Maple House, 149 Tottenham Court Road, for employers to hire and fire evidence is required that this You also suggest that a Tobin London WIT 7LB, Tel: +44 (0)20 7896 2525 workers in line with shifting transition could not have been lax would cause liquidity to fall. EDITOR-IN-CHIEF: Rory Clarke demands. You also relet' to the accomplished otherwise. But il the Tobin tax, through a SENIOR EDITOR: Sue Kendall-Bilicki scope for employers to screen David Foden managed flow, could at least STATISTICS EDITOR: Eileen Capponi EDITORIAL ASSISTANTS: possible long-term recruits while Brussels, Belgium decrease the amplitude of a Alison Benney, Lorcan Lyons they are temporarily employed. currency crisis, then in fact there PHOTO RESEARCI I: Silvia Thompson PRODUCTION CO-ORDINATOR: The larger question, however, would be increased liquidity in Workable Nadine N'diaye-Robinson is whether these advantages to that currency Also, it could be WEB EDITION: Rory Clarke employers should be allowed to Tobin tax argued that there is loo much MARKETING: Jill Colonna
LOGO AND DESIGN: outweigh the drawbacks. IF all the liquidity in the Forex market, Café Crème, Peggy King drawbacks were suffered only by Your article "Tobin tax: Could it which is a fundamental problem HEAD OF PRODUCTION (FTB): employers it might make sense work?" (OECD Obseiver, No. Mhairi Swans as profits are too easily made in
PRODUCTION (FTB): to leave them to make up their 231/232) supposes that the tax transactions that hurl the real Celine Bijleveld, Kay Burton own minds without regulation. would be levied at the dealing economy. ASSOCIATE PUBLISHER (FTB): However, despite your efforts to Maui Kohonen Angus Cushley sites, which would create huge minimise the disadvantages for administrative problems and London, United Kingdom GLOBAL ADVERTISING MANAGER 1 1 I B): workers, these are Far from make it unfeasible. The foreign Adrian Northey, +44 (0)20 7896 2109 negligible. exchange (Forex) market has two On the cover
PRINTING: A brief summary of the sides to it. According to Rodney In Unsustainable PRESS: Faesimilie Graphics disadvantages from a worker Schmidt, a Canadian economist PRINTERS: St Ives risk, David perspective would include: from North-South Institute, Rooney Applications it permission U reproduce lower pay; limited access while dealing is not organised, captures the translate all r parts of anic is from the OECD Ohser sr, should be ; idressed u to paid vacations, sick leave, settlement, which usually high-stakes unemployment insurance and operates two days later via the gamhlc with The Editor, the Earth OECD Observer training (and this despite the back office, is very regulated, and its 2 rue André-Pascal. 75775 Paris, ccdex 16, France. "equal treatment" principle of centralised and organised - entire life
European regulation); and of the money is closely tracked. support All signed articles express the opinions system, a of the authors and do not necessarily course the inherent insecurity. It Mr Schmidt suggests that represent the opinion or the OECD. is suggested that account should centralised payments systems game which must be taken of the profile of could be used to collect the tax. Reprinted and translated articles should carry we are to achieve sustainable the credit line 'Reprinted from the OECD temporary workers - they are Systems have been modernised Observer', plus the dale of issue. Signed articles development. Mr Rooney reprinted must bear the author's name. Two disproportionately younger and lately, easily distinguishing a regularly illustrates for voucher copies should be sent to the Editor, less well educated. But one The Irish Times and All correspondence should be addressed to the Forex trade. It is very simple to Wirtschaftswoche, as well as Ediior. The Organisation cannot be responsible might question why temporary programme a computer to take a for returning unsolicited manuscripts. popular magazines, and his jobs are disproportionately filled percentage of each trade. The work includes award-winning by those who are vulnerable in central bank could do this or illustrations for The Folio FT Business labour market terms. designate a payments system. Society. He can be reached at [email protected]. To argue that the gap in overall Thus the administrative cost
Observer No. 233 August 2002 EDITORIAL
Sustainable development Our common future
Donald J. Johnston, Secretary-General, OECD
There seems to be a wide variety of definitions and opinions as platform itself through erosion oF the soil, pollution oF the air and to what "sustainable development" really means. One might water, global warming and its concomitant climate change, depletion even be tempted to conclude that sustainable development is of fish stocks, and so on. While the material and social progress ol in the eye of the beholder! humankind in the developed world has been stupendous, especially in Some 15 years ago, the World Commission on Environment and recent years, its travelling companion has been the continuing and Development chaired by Gro Harlem Brundtland, in its report. Our accelerating degradation of the biosphere itself. Can ihe platform still Common Future, offered the following definition of sustainable support global development? development: "Development thai meets the needs of the present The sustainable development challenge is, as the experts say, to without compromising ihe ability of future generations to meet their "decouple" material progress and the environment, by putting them own needs". on parallel, complementary and hopefully mutually reinforcing tracks. Because the Brundtland Commission put much emphasis on the In simple terms, this means maximising economic growth and needs of the poor m developing countries, many observers thought its environmental improvement at the same time. This is an urgent message was poverty reduction and the elements that can support it - challenge for OECD countries whose activities slill put the greatest market access for developing countries, education, basic public health, stress on the environment. etc. Others, principally in industrialised countries, saw the report as Some industrialists will argue that, indeed, environmental encompassing their own needs lo sustain, from generation to protection measures have stimulated the development of technologies generation, high living standards, including a clean environment. lhat will promote decoupling, and that eco-efliciency is more than just As we head towards the World Summit on Sustainable an idea, it is working! I look forward to discussing such possibilities Development (WSSD) in Johannesburg, the international debate about with business leaders attending the WSSD. our common future seems lo be defined in terms of development Thinking within this framework makes one realise how inseparable versus environment. While the public in developing countries, the issues of human economic and social progress are from the naturally expects results on sustainable development measured by protection of the physical environment. And so, limiting the issues lo poverty reduction, the debate in the OECD countries focuses on the one or the other would, as the Brundtland Commission warned, be a environment. grave mistake: "The environment does not exist as a sphere separate The truth is thai even as developing and industrialised countries are from human actions, ambitions and needs, and attempts to defend it interdependent, so too are these issues. Even if developing countries in isolation from human concerns have given the very word devise the policies and good governance that can vanquish their 'environment' a connotation of naivety in some political circles. The poverty, they will not succeed unless their economies become word 'development' has also been narrowed by some into a ver)' integrated into the global economy. This means that industrial limited Focus, along the lines oF'what poor nations should do to countries must open their markets and, no doubt, also offer various become richer', and ihus again is automatically dismissed by many in forms of support. The wealthier countries, that have caused most of the international arena as being a concern of specialists, of ihose the environment problems, must do their utmost to put the planetary involved m questions ol 'development assistance'." biosphere back onto a sustainable trajectory but lasting progress will Rich and poor countries alike need to grow in a healthy biosphere, depend on the co-operation of developing countries. and both have to work together to achieve this. It is an imperative that Can the dialogue m Johannesburg establish a common denominator must be built into all our development paths, including those that on which both developed and developing countries can agree, and address poverty. from which mutually acceptable and coherent public policies will Let us hope that at the Johannesburg summit we can agree upon a How? A truly testing question. common understanding of sustainable development thai does not The Brundtland Commission wrote: "At a minimum, sustainable endanger the atmosphere, water, soils and living beings, but development must not endanger the natural systems that support life strengthens the platform upon which all future generations can build on earth: the atmosphere, the waters, the soils and living beings." their dreams. To slate the obvious, the absence of any one of those elements condemns the future of the planet as a home for human development. Those elements represent the platform upon which all else depends. In our modern, dynamic, industrial OECD world, we have been building on lhat platform, but in the process, have weakened the
Observer No. 233 August 2002 NEWS
Observer
Trade fall bottoms? Soundbites Wake-up calls...
The fall in merchandise trade in OECD In volume terms, trade Fell both on a quarter- ...for business... countries levelled off in the firsl quarter of on-quarter and year-on-year basis, with G7 "Too many corporations seem disconnected from the values of our country. Their scandals 2002 after nine months of accelerating exports down 5.8% from a year earlier have hurt the reputations of many good and decline, but remained at a low level compared with a fall oF7.0% in the linal honest companies. They have hurt the stock compared with last year. In value terms and quarter oF2001, and imports down 5.1% market. And worst of all, they arc hurling at current prices, merchandise exports compared with a 4.5% drop the previous millions of people who depend on the integrily ol the businesses for their livelihood and their increased by 1.1% in the first quarter of 2002 quarter. But the quarter-on-quarter Figures retirement, for their peace of mind and their compared with the fourth quarter of 2001 showed stabilising negative growth, with financial well-being." while imports fell by 0.4%. On a year-on-year exports down 2.3% and imports Falling 3.7%. US president, George W Bush, in a speech to basis, trade was still sharply lower. Compared business leaders in New York, 9]uly 2002. with the first three months of the previous The United States suFFered the sharpest fall m ...for drivers... year, exports in the first quarter oF 2002 were export growth in volume terms, down 12.7% "I am absolutely horrified by the fact that Trench clown 8.9% and imports dropped 11.0%. From a year earlier, while imports dropped roads are the most dangerous in Europe." 5.8%. France saw the heaviest Fall in import French president, Jacques Chirac, announcing OECD merchandise trade new road safety measures on nationwide television volume, down 1 1.2%, with exports in % change on the previous quarter on Bastille Day, 14 July 2002. volume terms down 4.4%. (current prices seasonally adjusted) ...for our planet. "Was Earth lucky to gel ibis far? (...) Even Japan's export and import volume Fell less on the best of planets, advanced life only sharply, with export volume down 2.9% from nourishes for a relatively short period of time." a year earlier and imports down 5.6%. Donald Brownlee, co-author of a new book, Compared with the previous quarter, exports Rare Earth, and professor of astronomy at the University of Washington, in a comment in July 2000O1 2000Q2 2000Q3 2000Q4 2001Q1 200102 200103 2001Q4 200201 edged up 0.2% in volume terms while on the NBC website, msnbc.com. Exports imports fell 5.4%.
IT outlook is Early check-up not so dim for business ethics
Prospects for the information Business ethics are in the spotlight confidence and market stability. They also technology industry remain strong everywhere and OECD countries have agreed stressed that governments and supervisory despite the recent downturn, the latest lo bring forward a planned assessment of the bodies need to be vigilant to ensttre that OECD Information Technology Outlook OECD Principles of Corporate Governance to financial standards, regulations and market says. New products and services such as 2004 from 2005. Meanwhile, the OECD surveillance protect the interests of broadband will continue to drive plans to examine governance developments stakeholders. demand from firms, households and in corporate and financial spheres in a bid to governments, and falling costs and identify lessons that can help the assessment. OECD ministers adopted the non-binding technological developments will help. The decision lo bring the assessment forward Principles of Corporate Governance in 1999. And despite the slowdown, markets for was made at the OECD annual ministerial The principles are intended to serve as a information and communications goods council in Paris in May (see OECD.org, page reference point for countries' efforts to and services were equivalent to 8.3% of 54) and Follows several headline stories where evaluate and improve their own legal, total GDP of OECD countries m 2001 , business behaviour was called into question, institutional and regulatory framework for compared with less than 6% in 1992. from failure to transmit information to corporate governance. The OECD is co¬ Just as the information technology shareholders lo alleged false accounting. operating with the World Bank to promote sector was affected by, and contributed corporate governance reform efforts to, the current downturn, there is strong Ministers agreed at the May meeting that worldwide, using the Principles of Corporate reason to believe it will have a effective enforcement of corporate governance Governance as a benchmark. significant role to play in the next rules is essential and they determined to
recovery, the report says. improve the rules to enhance transparency For more on OECD work on corporate and accountability and so strengthen investor governance: www.oecd.org/corporate
Observer No. 233 August 2002 Observer
Agricultural markets may recover Russian visit
Global agricultural commodity markets The report says world agricultural markets n Russian Prime Minister have taken a long time to recover from a will improve between now and 2007. Much Mikhail Kasyanov discussed precipitous drop in prices during the of this will be due to stronger demand and _ areas for Further co-operation second half of the 1990s, caused by slack growing imports in rapidly developing T^~~ *M ? v\T&t the OECD during a visit demand and trade in the wake ol a general countries outside the OECD. The growth in ^^ w.a to OECD Secretary-General Mr Kasyanov ^ , , T , . _ . . downturn in world economic growth, as trade of livestock products and feedstuffs Donald Johnston m Pans in well as continued high levels of will continue to be faster than that of food July. According to Russian press sources, Mr government spending on farm support. grains. Yield and productivity rather than Kasyanov also said his country would be However, according to the OECD's increased land use will contribute most to interested in joining the OECD alter Russia Agricultural Outlook 2002-2007 published crop expansion. has become a member of the World Trade on 16 July, world agricultural prices Organization. The OECD's programme with The Outlook provides a comprehensive set of should gradually rise from their current Russia is the organisation's largest with a projections for all sections of agriculture over weak levels as the economic recovery single non-member country and the OECD the next five years. It also takes a special look strengthens at the end of this year and into issued its fourth Economic Survey of the 2003. It forecasts a more marked at Russian agriculture and at the issue of food Russian Federation in February 2002. security in developing countries. increase in prices for certain meats and For more on the OECD's work with Russia: dairy products than for cereals and For more, see www.oecd.org/agriculture or www.oecd . org/cenm/russia oil seeds. order the report at www.oecd.org/bookshop
Development aid Development aid holds steady Net official development assistance flows from DAC member countries, 2001 The US was the world's largest aid donor in the events of 1 1 September. Japan was the 2001, resuming the position it ceded to Japan second largest donor with US$9.7 billion, in 1992, while aid From several European followed by Germany, the UK, France and Union (EU) countries also rose. However, the Netherlands. Total aid from EU countries overall net official development assistance came to US$26 billion, while aid from the (ODA) from the OECD was little changed European Community rose 21.1% to from the previous year. Japan's ODA fell by US$5.91 billion. 18% in real terms, partly due to a 12.7% fall in the value ol the yen, but also because ol The annual meeting of development the timing of disbursements to multilateral ministers and heads of development organisations and the receipt ol loan agencies from member countries ol the repayments from Asian countries that have OECD Development Assistance Committee recovered from the Asian financial crisis. (DAC) in Pans on 15-16 May welcomed the significant increase in ODA that is expected The level of aid as a proportion of combined over the next four to five years, largely / Mft r « % ° *y«V * <' ^%^vp- gross national income of member countries following commitments made at the in the OECD's development assistance Financing for Development summit in committee (DAC), which accounts for at least Monterrey in March. The meeting be more sharing of methods to assess when 95% of total world ODA, was unchanged underlined that the increase in aid would go countries in difficulty are in danger of from the previous year at 0.22%. Denmark, hand in hand with intensified efforts to slipping into violent conflict and acting Norway, the Netherlands, Luxembourg and improve aid effectiveness and achieve quickly to stop this from happening. This Sweden continued to be the only countries to measurable progress in transforming the included using development co-operation to meet the United Nations' adopted ODA target lives of poor people. help identiFy and deal with the risks ol of 0.7% of gross national income. terrorism. Representatives of the New Partnership for For more on the aid figures and the DAC US aid rose to US$10.9 billion, of 0.11% oF Africa's Development (NEPAD) attended the meeting: www.oecd.org/development meeting, and ways to tackle the problems gross national product, up slightly From the OECD (2002), The DACfournal: Development previous year, with much of the increase underlying the lagging development Co-operation Report 2001 - Efforts and Policies of reflected in a US$600 million disbursement performance in a large part of Africa were the Members of the Development Assistance to Pakistan for economic support following discussed. In particular, there would have to Committee Volume 3 Issue 1
Observer No. 233 August 2002 Politicians will probably tell you that plates are getting bigger. You may not have noticed, but fish have gradually been getting smaller and smaller. There aren't enough adult fish in the sea to meet demand, so fishermen are catching baby ones. The fish on your plate probably didn't live long enough to reproduce, as a result the stock it came from didn't get a chance to recover. Scientists have been warning the politicians about the disastrous effects of overfishing for years, but the powers that be chose to stick their heads in the sand and think of the short term. Well now it's their last chance. This year, ministers will vote on the future of the EU common fisheries policy. Unless they make radical changes, marine eco-systems will be destroyed and fish will become a rare delicacy. If we don't stop overfishing now, fishing will be over.
www.panda.org/stopoverfishing SUSTAINABLE DEVELOPMENT
Key issues
Back to the basics
Simon Upton, Chair, OECD Round Table on Sustainable Development'1
The Johannesburg summit is a golden opportunity to move forward on some tough sustainable development issues. But the agenda has grown and become unwieldy. Progress will depend on getting back to some global basics.
What are the realistic prospects for sustainable development been divided again into two separate social and economic "pillars" ol in the first decade of the new millennium? The short sustainable development. I have made considerable efforts to Find out answer is that they will be a lot brighter if those who rally when this characterisation of sustainable development emerged, but behind the sustainable development banner - particularly in without success. It was certainly not part of the Rio outcomes, but is now developed countries - confine themselves lo a less rather than a more firmly embedded in European Union and OECD literature. ambitious agenda. Why? In essence, the idea is that of a virtuous triangle of mutually reinforcing The Rio Earth Summit of 1992 was a conference on environment and economic, social and environmental policies that together advance "a development, with the locus on meeting the developmental and society that is more prosperous and more just, and which promises a environmental needs of both present and future generations. cleaner, safer, healthier environment", not just in the near term but in Significantly, the programme of action it laid out, called Agenda 21, the long term, too. consisted of two sections: the social and economic dimensions on one hand, and the conservation and management of resources for This is, unquestionably, an elegant formulation. But it cannot pro\ide development on the other. any definitive boundaries for the trade-offs that inevitably occur between, for instance, seeking improvement in material living standards A reading oF the 27 principles of the Rio Declaration discloses a and maintaining ecosystems m their natural states. breathtakingly ambitious policy terrain. But it is still tractable. It adheres to the environment and development dimensions that drove There are two dangers here. The first is that in the search for "balance" the Brundtland Commission. And most of the Rio Declarations between the three pillars, we end up in a world where everything is principles can still be made sense of and implemented by tradeable, with few, if any, environmental "bottom lines". The second governments, regardless oF their political persuasion. is that it is hard to see what might be excluded from these three all-encompassing pillars. In short, we risk emptying sustainable 1 have no argument with the Rio Declaration as a working guide. But I development of content by seeking to extend it to everything. do harbour doubts about the agenda which has been graFted onto it since Rio, and in particular the emergence of the so-called "three pillars" Now it might be objected that this is harmless enough; lhat sustainable definition of sustainable development. The original two-part division development embraces many disciplines and that anyone worth their between the socio-economic and the biophysical sphere apparently did salt would know where the live issues are. But at Rio, considerable store not go far enough for some, and the socio-economic sphere has now was placed on the need to develop robust indicators that can inform
8 Observer No. 233 August 2002 SUSTAINABLE DEVELOPMENT
Key issues
sustainable development. But our approach has to be based on hard Sustainable development is surely about global information that can change minds and win debates. Using the UN's concerns; but can retirement incomes really be Human Development Index (HDD, a core set ol health, education and income indices, may be a way forward. Such an approach would leave included in that definition? Even if they can, are they us in a more analytically tractable situation: rather than pretending that as important as, say, basic literacy or even cidture? some magical balancing trick is possible between the three pillars, we would be considering a human sphere of economic and social development that can be managed for better or worse, and a decision-making on a hard core of issues. Indicators are vital, but we biophysical (or environmental) sphere subject lo some real, have made little progress in developing them - and the extension of scientifically demonstrable thresholds. The focus oF policy attention sustainable development to a "three pillars" approach could mean that would then be directed to development trajectories within those we never get there. thresholds.
The European Commission, in its 2001 Strategy lor Sustainable Institutional challenge Development, referred lo the need lo focus on "a small number of problems which pose severe or irreversible threats to the future well- But even iF we build the hard information and data we need, do we being of European society". It identified a set of structural indicators, have the institutions to do anything with it? Rio spawned the ranging from lifelong learning and childcare facilities to energy challenge, "think global, act local", but tackling global issues requires a intensity and biodiversity. In the end, no fewer than 53 different huge commitment of diplomatic and negotiating resources. Surely, indicators were envisaged, some of them with a distinctly developed- then, the focus should be on dealing with those things that can only be country feel. done at the global level. The atmosphere and the oceans are the obvious candidates; others are abject poverty and health threats, like The OECD's approach has had similar teething difficulties. Its AIDS and TB. sustainable development indicators are expected to be included in economic reviews of member countries from 2004, alongside Not that there is any shortage of international treaties relating to the long-familiar economic indicators such as inflation, GDP growth, global commons, though many of these remain either incomplete or interest rates, and so on. The preliminary list embraces a sensible unratified. There are the Straddling and Migratory Fish Stocks clutch ol traditional environmental indicators covering water quality, agreements, for instance, or the Convention on Persistent Organic air pollution and C02 emissions. But there is just one social indicator - Pollutants, to name but a few. sustainable retirement-income policies. One of the key problems is that political goodwill and interest have The orphan slate of this indicator is one issue, but more important been dulled by inter-govemmental processes that, in the end, have no is the question of what might be considered not part of sustainable impact on national policies. Sustainable development meetings risk development if such indicators are seen as relevant. Sustainable becoming the preoccupation of a self-perpetuating clique ol development is surely about global concerns; but can retirement incomes negotiators and interest groups. This is increasingly the Fate ol the really be included in that definition? Even if they can, are they as UN Commission on Sustainable Development (CSD), Rio's important as, say, basic literacy (not on the OECD list) or even culture? contribution lo the stable oF international Forums.
The consequences of selecting an indicator such as retirement incomes The CSD was set up to "ensure the effective follow-up ol ihe 1 Rio] is meaningless m a region such as sub-Saharan Africa where the Conference, as well as to enhance international co-operation and average life expectancy is less than 50. II the answer to that criticism is rationalise the intergovernmental decision-making capacity for the that sustainability is a relative, country-specific matter, we're back integration of environment and development issues and to examine the where we started: policy trade-offs and insoluble debates about the progress in the implementation of Agenda 21 at the national, regional distribution of wealth. No doubt these questions will be resolved, hut and international levels..." we should begin by accepting that if sustainability is to have a meaningful, universally recognisable core, many issues will have to be It would be hard to argue that the CSD has fulfilled any of these excluded. Otherwise, the cart will simply not move Forward. roles. Its multi-stakeholder remit held out the hope that ministers, academics, business leaders and NGO leaders would be able to engage Sustainable development as Rio launched it sought to tackle, at the frankly lo unblock the way lo a more sustainable future. Instead, we global level, the relationship between development ambitions (in all have had a country-based negotiating mindset, with foot-dragging countries) and environmental sustainability - a big enough task in consensus. itself. If we are not very careful, a "three pillars" approach will quickly become vacuous, particularly il it incorporates elements beyond the It need not have been this way. Rather than a toothless negotiating already awesome problems posed by absolute poverty and morbidity, forum, the CSD could become a catalyst for sharp-edged, time-bound or the depletion of the biosphere. commissions lo report on difficult issues lhal require inlernational attention. Such commissions would need to be supported by teams This is not to deny the importance ol the social dimension ol of experts, but as importantly, they would have to include elected
Observer No. 233 August 2002 SUSTAINABLE DEVELOPMENT
Global challenge
ministers who can then start to reclaim a popular grassroots mandate for the UN from its current diplomatic ownership. The World Unsustainable risks Commission on Dams chaired by South Africa's education minister, Kadar Asmal, shows it can be done. Jeffrey Sachs' Sustainable development is a fundamental global Commission of Macroeconomics and Health is another model. This is the sort of stuff we challenge and the risks from inaction are immense. But should be serving up to CSD meetings. As a there are encouraging signs. former CSD chairman I am acutely aware that this kind of action is needed to revive
ministerial interest in pursuing sustainable development issues at the global level.
Beyond this, governments hold the keys to many of the banners that stand in the way of development. Trade barriers, subsidies, aid, pollution control: all are creatures of government. But the institutions and instruments they have traditionally used to solve problems are no longer suited to the sort of global community that is emerging. This is a repeated refrain of many businesses and NGOs that claim to have transfomred their own modes
of operation. Governments have to catch up.
So, while we must always confirm the importance of market access, development assistance and insisting on improving our scientific underpinning of the debate with credible indicators, we should also recognise that institutions of international governance are needed to tackle genuinely global problems such as those lhat affect the global commons. If we can go on from Johannesburg to leave the negotiating mindset of the 20th century firmly behind by thinking laterally and flexibly about how global dialogue and rule-making should proceed, then the summit would have done more than many dared to hope.
The OECD Round Table on Sustainable Development was created in 1998. OECD ministers have formally endorsed its role as "a forumfor international dialogue among stakeholders". Twice a year it brings inter¬ governmental organisations, business and civil society together to discuss the cross-cutting economic, An economic commentator m a managed to lift their economic growth environmental and social challenges of sustainable British newspaper once wrote that potential and social conditions while development. Its role is "to continue to generate policy things have become so bad, you reducing certain environmental pressures. ideas" which could achieve "sustainable development objectives". Mr Upton, New Zealand's former simply have to be an optimist. How They have virtually eliminated emissions of environment minister and former chair of the United appropriate this view may appear now as lead from petrol and of ozone depleting Nations Commission for Sustainable Development, has attempts to give new momentum to the CFCs, and have increased forest area. Surface presided over the OECD round table since Us inception. sustainable development train gel under water cleanliness has greatly improved too, way in Johannesburg. while water use per head is falling. References OECD (2001), Sustainable Development: Critical Issues, OECD, Paris. For one thing, some progress has been made This progress is encouraging since the European Commission (2001), Strategy for in the 10 years since the 1992 Earth Summit, OECD area has such a large effect on the Sustainable Development, Brussels. particularly in OECD countries. They have Earth's environment. The trouble is that so
10 Observer No. 233 August 2002 SUSTAINABLE DEVELOPMENT
Global challenge
gaining influence on policies of all types, Cleaner tax from I arm reform to international trade. Sustainable development is Proportion of revenues from environmentally related taxes, OECD countries1, 1995 about using the Earth's resources Whatever pillars are propped under the intelligently and responsibly, Diesel Other transport energy sustainable development banner, most 20.0% 1 .4% hence the need for balance people accept that the ultimate risk ol continuing the present game without change between the different pillars. Heating and processing fuels 4.£ is total loss. This does not mean halting
\ Electricity 3.3°/. growth, far from it. Sustainable development Other 1 .3% is about using the Earth's resources ownership of motorised vehicles, for intelligently and responsibly, hence the need instance, developed countries will remain lor balance between the dilferent pillars. well in the lead for years to come. It is the
Motor vehicles environmental impact of questions such as
26.2% Politics is the art of the possible and this that sets the World Summit on progress depends largely on OECD Sustainable Development apart from, say, Note: 'Other" includes waste management (0.6%); effluents to water (0. 3 %) ; emissions to air (0. 2 %) ; countries leading by example in curbing the Monterrey meeting on Financing for ozone depleting substances (0. 2 %) ; non-point water their sizeable environmental toll on the Development in March 2002. pollution (0.03 %). 1 Data cover 21 OECD member countries planet. But they cannot truly expect the Source: OECD/EC, Database on environmentally related developing world even to be able to follow Transport is just one area where ways to taxes suit unless, apart from doing their utmost to decouple activity from the environment help poor countries overcome debilitating must be found, and the guidelines on much of the world's natural resource base poverty and disease, they also give far more Environmentally Sustainable Transport continues to be overexploited or damaged, access to their wealthy markets, modern may be a start (see article page 46). including the atmosphere, groundwater, fish technology and know-how. Without these, stocks and crop-yielding soils. And the it is difficult to see how sustainable Buildings are another major problem. They biodiversity on which humans depend for development could begin to take hold. too use energy, olten very inefficiently, and food and many medicines is being emit massive pollution too. Factories, destroyed. Meanwhile, developing countries The OECD area's 30 member countries offices, houses: all are guilty. Galloping lhat aim for sustainable development find account for about 80% of world GDP and urbanisation will worsen matters. Regulation themselves held back by difficult market consume about 60% of world energy and market innovation are beginning to and technological conditions, as well as by supplies. Historically, they have been improve matters, but progress could be debilitating poverty and rampant diseases. responsible for most of the build-up ol quicker. greenhouse gases and still account for over Can anything be done? Ol course. Only a half of world carbon dioxide emissions. CO2 Then there is the rising volume ol municipal profound pessimist would say otherwise; the emissions are expected to rise by 33% in waste, from used-car mountains and stacks large, seemingly intractable, global problems OECD countries by 2020 and to double in of old tyres, to old building materials and, the world faces, like climate change, ozone developing countries. Energy demand is despite the promise of dematerialisation depletion, deforestation, energy and food expected to shill towards countries like through technology, toxic computers. Maybe security, and health, are surmountable. The China and India, but when it comes to new technology and recycling will help, but developed economies of the OECD may be it is hard to see how the pile can be fought held responsible for much of the mess, but down without tougher government rules Throwaway culture nor are developing countries innocent. and changes in material behaviour, Municipal waste generation, OECD Everyone accepts that the solutions have to particularly consumption. come from everyone together. The likelihood is that sustainable
Still, the real burden of initiative lies development solutions will come from with our leaders', that is the role ol power governments and markets working together. and indeed of summits. Again, as the A case m point is the steep reduction in contributions from ministers in this emissions of two dangerous pollutants, OECD Observer suggest, a real international nitrogen oxide and sulphur dioxide, that political commitment is evolving lo achieve OECD countries have managed since 1990. sustainable development based on its Regulations helped by requiring coal-fired
economic, social and environmental 50 power plants to reduce emissions; economic dimensions. If may be too early lo talk 2000 considerations played their part in causing aboul a perfectly holistic approach to Private consumption Total waste generated many households and power plants to - Waste generated per inhabitant government decision-making, but switch from coal and oil to easier fuels like Source: OECD sustainable development considerations arc natural gas and to buy only cars fitted with
11 Observer No. 233 August 2002 SUSLAINABLE DEVELOPMENL
Global challenge
catalytic converters. None of this could have OECD countries account for some 95% Carbon rating happened if the technology had not been of official development assistance (ODA) CO2 emissions per unit of GDP1, available, of course, nor without public worldwide and have no choice but to OECD countries, 1999 awareness and pressure. Rules, markets, help turn this catastrophe around. That technology and education combined to means technology transfers to improve produce these results. They can do so again. farmland, for instance. ODA has to be Who knows, maybe the next economic made more effective and brought to a level boom will be driven by energy and that can help poorer countries develop environment applications, rather than the human capacities, institutions, and information technologies, with political governance they need to take advantage action helping to get the process rolling. ol globalisation, rather than being left behind. Although most OECD countries The OECD has advanced a number ol currently fall well short of the longstanding instruments to spur sustainable development. UN target of devoting 0.7% of then- Environmentally related taxes, for instance, gross national income (GNI) to can encourage producers and consumers to development assistance, the new readiness take the lull environmental or social costs of to increase aid efforts expressed at the goods into account, whether fuel, water, or UN Conference on Financing Development plastic bags. This has proved successful in in Monterrey in March 2002, has to be many OECD countries, particularly when built upon. combined with innovative techniques. In Denmark, for example, the tonnes of Bringing down trade barriers would help. cadmium batteries turned in lor safe disposal OECD countries account for three-quarters tripled in the 12 months following the ol world trade, yet many of their markets introduction of a tax-rebate scheme on the remain highly protected from poor country batteries in 1996. In Brisbane, Australia, 0.6 0.8 1.0 exports. The gain to developing countries water demand fell by 20% in the two years Tonnes/USSLOOO from unrestricted access to OECD country following the adoption of volume based markets for textiles and clothing, other water charges m 1995-1996. Note: Carbon dioxide from energy use only; international manufactured goods, and agricultural marine and aviation bunkers are excluded. 1 At 1995 prices and PPP products could total US$43 billion per year. However, exemptions to environmental Source: OECD OECD and non-OECD countries have to taxes can be significant, and are sometimes work together to change this and other granted to the most polluting industries. Fighting poverty trade distortions, including possible And there is some resistance to them, partly environmental ones, through the Doha out of lear of losing competitiveness, jobs or Ol course, none of these innovations will Development Agenda under the World income, and also a lack ol conviction that mean much to people whose first concern Trade Organization (WTO). the taxes are all genuinely aimed at is to survive from day to day. Millions ol sustainable development and not simply people suffer chronic hunger, and diseases An important task of the OECD is to lining government coffers. Policies are like HIV/AIDS and malaria are destroying develop performance indicators ol needed to address these concerns. the very foundations of society in several sustainable development and it plans to countries. incorporate them into its regular country- Taxes arc not the only market-based economic surveys from 2004. The results instrument governments can try; tradeable may tell us that prospects for our planet are The likelihood is that permits are another and have been used not as hopeless as some would have it. In with some success to reduce greenhouse gas sustainable development fact, as the evidence show's, il we can emissions (see article page 38). solutions will come from identify the problems, we will find ways to governments and markets resolve them; what we will always One area governments must encourage is working together. Who knows, need is concerted action to put plans research. Science and technology have the into action. RJ.C./S.K. maybe the next economic boom potential to deliver many breakthoughs, like alternative luels, or medical properties of will be driven by energy and References new plant discoveries, not to mention environment applications, rather OECD (2002), Working Together Towards Sustainable Development: The OECD Experience, breeding crop strains that better resist than information technologies, available at www.oecd.org/ disease. More funding ol basic research may with political action helping to sustainabledevelopment be required in some cases, removing market get the process rolling. Rees-Mogg, W, "Its so bad you simply have to barriers that limit the development and be an optimist". The Times, 24 September dissemination of new technologies in others. 200 1.
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Ministers' roundtable
What does sustainable what specific measures to make progress
Finland Roundtable
A guiding principle What ministers are doing of Finnish society How serious are we about sustainable development?
been without reward; the World Governments are frequently accused of paying lip-service Economic Forums sustainability index to the idea, but not taking enough action to make it work. has ranked Finland first in its comparison We asked ministers from a cross-section of countries - of international competitiveness and South Africa as a non-OECD country and host to the sustainability for two years in a row Johannesburg Summit on Sustainable Development; Finland as a smaller, though environmentally progressive, It is with some justification, therefore, that OECD member; France, whose government has recently Finland sees itself as a credible leader in instituted a sustainable development portfolio; Mexico, the global campaign for sustainable as one of the largest and poorest OECD countries, and development. We see that sustainable Jouni Backman, Minister of the United Stales as the OECD's biggest and perhaps development now integrates the the Environment, Finland environmental, social and economic dimensions, and so goes beyond the original dual concept of environment We in Finland have long been striving to and development. Concrete targets and make sustainable development a guiding timetables are now needed, lo be South Africa principle of our society. The process may undertaken by governments, the private be characterised as a joint effort involving sector and civil society. administration, politicians, private sector, People, planet and prosperity scientific society and civil society. My advice is: "Think big, act small and The Finnish National Commission on move fast". It is an old wisdom that can
Sustainable Development (FNCSD), help us in shaping the worlds sustainable chaired by the prime minister, was future. Whether at Johannesburg or r*8 established as long ago as 1993. It beyond, we will need a Declaration with ^ brings together expertise from different political vision, an Implementation Plan fields, combining high-level political guided by that vision and Partnership Valli Moosa, involvement and broad participation by all Agreements to put it into practice. HHy Minister of Environmental major actors, so ensuring transparency P| Affairs and Tourism, and continuity. There is already a consensus on the H m South Africa poverty-related Millennium Development Finland's initiatives towards sustainable Goals. These need to be complemented development include a national action by a solid programme on changing our programme for sustainable development consumption and production patterns, The slogan we have offered for the World Summit on Sustainable (1995), the government Programme for with a commitment to safeguarding our Development in Johannesburg - "people, planet and prosperity" - Sustainable Development (1998), planets biodiversity There is also a good sums up sustainable development perfectly for me. It is about ensuring currently under evaluation, as well as the basis for consensus on implementation in that people have access to the basic necessities of life: food, water, development of national sustainability the Monterrey and Doha agreements, sanitation, modem energy services, healthcare and a proper education. indicators (2000). Various sectors and which must be reconfirmed at It is about providing an enabling environment, internationally and stakeholders have also produced their Johannesburg. We understand the domestically, which creates jobs, attracts investment and supports fair own sustainable development interrelationships; now we must agree to trade. And crucially it is about doing all this while safeguarding our programmes. At the local level the concept concrete action based on small, fast steps, planet for future generations by using our natural resources in a of sustainability has also become a key that together will enable us to make sustainable way and conserving our environmental heritage. It is also goal, with almost 70% of our sustainable development a reality. about recognising the singular and profound impact poverty has and municipalities now implementing their knowing that the eradication of poverty is key to guaranteeing global own Local Agenda 2 1 . This work has not Visit: www.vvh.fi/ and local sustainable development.
14 Observer No. 233 August 2002 SUSTAINABLE DEVELOPMENT
Ministers' roundtable development mean to you and are you taking or recommending towards achieving this goal?
France
Towards "eco-responsible" government most environmentally important member - to answer the
same straightforward question: sanitation and energy, not forgetting healthcare and education. In particular, What does sustainable development mean to you and we are striving lor responsible what specific measures are you taking or recommending management of natural resources in to make progress towards achieving this goal? order lo foster equitable sharing of ihe worlds riches. Meanwhile, bringing sustainable development into the No one would deny that there is much to be done. The mainstream of civil society in France answers that follow show that governments are not only emails formulating a national sustainable clearly committed to the goal of sustainable development, development strategy, underpinned by but they are also doing something about it. Roselyne Bachelot-Narquin, extensive consultations and incorporating the government's Minister for Ecology and overarching aims. It is expected 10 be Sustainable Development, formally adopted towards the end ol France 2002. One ol the main thrusts of this I think it appropriate lhat South Africa should host the World Summit on Sustainable Development because in many policy is lor the Stale lo set the example in applying the principles of sustainable ways South Africa represents the world in one country. We lace Sustainable development has become development. What this really means, in the challenge of balancing economic and social development one of the great imperatives ol our time. my view, is that government agencies with the need to protect our environment. We want to create It is based on environmental, economic should become "eco-responsible", a more equitable society in which wealth is more evenly and social demands. Its ecological distributed, and all our people can share in our prosperity and whether in handling their architectural dimension must be humanistic and n and natural heritage, waste management, improve ihe quality ol their lives. I also believe lhal as an African musi cement the alliance between the or water and energy consumption. country it is our duty to demonstrate to the world that oui- environment, science and economic It also means that all ministries and continent is committed to a more sustainable development path and that we are willing and able to lake the necessary action progress. Sustainable development is departments should incorporate these above all a cross-cutting concern lhal to eradicate poverty, with support from the international principles into all of their policies and ought to be implicit in any government actions. community. project. That is why President Jacques
Since the democratic elections ol 1994 we have made significant Chirac decided this year lo set up, for Another of my missions is lo ensure lhat the first lime in this country, a sustainable development objectives are progress towards sustainable development in South Alrica. The Ministry ol Ecology and Sustainable factored in whenever public policies are government has built over a million new homes, we have Development, which I head, and within framed or implemented. Sustainable provided basic water supply lo a further seven million homes il a State Secretariat lor Sustainable and delivered electricity to over three million that never had development also means including Development, led by Tokia Saili. This citizens in the decisions taken by such access. Our constitution guarantees the right ol all South Africans lo a healthy environment and to ecologically sustainable genuine political resolve is rooted in a government. Bridges have lo be built sense of solidarity with future between the many local initiatives and development, and the landmark 1998 National Environmental general ions and a real concern lor the Management Act provides a supporting legislative framework. representatives at the national level, and public interest. Our objective is to rally efforts stepped up to educate people all parties involved in sustainable about the environment and sustainable Like most countries we still lace many challenges ahead. development - in France, Europe and development. And we must move Together with various stakeholders, our youth, women, NGOs, labour and business, sustainable development will be one of the beyond - lo this common cause. quickly in our fight lo foster responsibility and higher ethical government's major objectives over the coming years in order 10 On tin international level, we want above standards. meet those challenges toward a "belter life for all". all to bolster the fight against poverty by Visit: www.environnement.gouv.fr/ Visit: www.environment.gov.za/ expanding access lo drinking water,
15 Observer No. 233 August 2002 SUSTAINABLE DEVELOPMENT
Ministers' roundtable
Mexico United States
Building environmental governance Empowering communities
entire spectrum of government citizens can view a range ol departments, as exemplified by the environmental information about adoption of sustainability targets and their community at the click of a indicators in the programmes of 14 mouse. Armed with this information, institutions responsible for fiscal, local officials and community groups economic, agricultural, energy and can make better decisions about how transport policies. Mexico has also to protect and restore valuable sought more active involvement in resources, and how to plan for future international forums, where social, growth and development. economic and environmental issues
Victor Lichtinger, converge, encouraging olher countries Christine Todd EPA promotes integrated Secretary for Environment to share responsibility for global Whitman, Administrator, environmental management an el environmental challenges, such as long-term planning, through and Natural Resources, U.S. Environmental climate change and biodiversity loss. programmes like the Smart Growth Mexico Protection Agency Network - a loose affiliation of Mexico invites olher nations and organisations which agree lhat where Sustainable development is described international organisations to commit Sustainable development calls for us and how we grow matters - and the in the Brundtland report as a model themselves to improve governance lo manage our environmental, "watershed approach" to managing ol development lhat meets the needs strategies which address these and economic and social resources for water quality. For businesses, of the present without compromising other pressing environmental the long term. It asks us to protect corporations and institutions, EPA is the ability of future generations to problems. At Johannesburg and the quality of life for both present supporting the developmenl ol meet their own needs. For Mexico, beyond, Mexico will promote and future generations. For the US, Environmental Management Systems attaining sustainable development is innovative initiatives in the conlexl of this means working with our that take a holistic view of a challenge lhal must be met, and the recently formed group of like- partners at home and abroad to environmental impacts, focusing on implies reconciling the urgent need minded "megadiverse" countries.* achieve more sensible use of pollution prevention and continual to improve the wellbeing of people, And, bearing in mind the critical issue human, natural and financial improvement. while conserving our biodiversity of ecjuity, Mexico will also emphasise resources by instilling an ethic ol and natural resources. This can only outstanding aspects relevant to environmental stewardship among Finally, EPA is empowering be achieved through the balanced financing sustainable development. individuals, institutions and communities lo pursue sustainable integration of economic, social and corporations. development by providing direct environmental goals ami policies. Our firm steps to consolidate a new financial and technical assistance. In institutional Iramework will enhance The Environmental Protection January, President Bush signed new For Mexico, 1 December 2000 was co-ordination between public and Agency (EPA) is working to "brownlields" legislation to help a political watershed, thanks to the private sectors, including all relevant encourage this ethic in a variety of stales and local communities turn entrenchment of democratic rule stakeholders at home and abroad, so ways. 1 would like to highlight just environmental eyesores into in government. Among the most as to promote the goals of sustainable a few examples that may be helpful economic assets. Shortly after, 1 to others. important aspects of this new development. announced my own initiative to help democracy is the integration of EPA achieve these goals by using sustainable development as a We may have to revise some original I have committed EPA to smart growth to enhance brownfields guiding principle underlying all concepts. For instance, ihe notion of providing open and easy access revitalisation and alleviate pressures policymaking processes, as stated in meeting the needs of the present without to environmental data and to develop open space. Also in the National Development Plan compromising future generations is, in information. In 2002 EPA will issue- January, I announced a new initiative 2001-2006. The reorganisation of my view, outdated; for the future is now, its first State of the Environment to channel federal resources to government institutions and the and it is time for commitment. report, detailing progress over the priority watersheds. inclusion of the Ministry of the past 30 years, and identifying the Environment in all three of the new "The megadiverse group of like-minded challenges before us. This Through activities like these, our aim government's cabinet divisions, countries includes Brazil, Bolivia, China, report will set the stage for a is to give people the opportunity to dealing with social and human Colombia, Costa Rica, Ecuador, Philippines, comprehensive, holistic view of make choices that will enable them development, growth with quality, India, Indonesia, Kenya, Malaysia, Mexico, environmental protection that to live healthier and more and law and order, was a first step Peru, South Africa and Venezuela. gauges success based on results prosperous lives - economically, towards this new approach to rather than administrative socially and environmentally - and environmental governance. See the Cancûn declaration of 1 8 accomplishments. to protect that same chance for their The present administration is February 2002 at: wwwsemarnat. children and grandchildren. committed to implementing gob . mx/intemacionales/reunion/doc/ EPA is also pushing the envelope on environmental policy across the CANCUN-DECLARATlON.doc computer technology, so that Visit: www.epa.gov
16 Observer No. 233 August 2002 FOOD & FARMING
A minister's view
Rethinking agriculture and food
Renate Kunast, Federal Minister of Consumer Protection, Food and Agriculture, Germany
££ r I Vast is a delicate plant; once destroyed, it doesni "Our model is sustainable agriculture and food production. The T grow back quickly." social costs of 'ever more at ever lower prices' must be reduced." When Otto von Bismarck made this - Renate Kùnast, here seen attending the Nuremberg Bio Trade Fair. observation in the late 1 9th century, he probably did not mean to include consumer trust in food safety. At that lime and until well into the second half of the of food, so consumers increasingly focus various food scandals have deeply shaken 20th century this aspect played at most a on food safety and food quality, including consumer confidence in the safety of the food minor role in food production. The central subjective and ethical issues like animal they buy and eat. Such problems have also task of the agri-food sector was to produce welfare and environmental protection. led consumers to question previous agri-food sufficient food at the lowest possible price. policies, including the comprehensive These times are now over. Most people in The arrival of "mad cow" disease (BSE), payments granted to farmers. The time was industrial countries have secure quantities outbreaks of foot-and-mouth disease and ripe for a fundamental reorientation of farm
171 Observer No. 233 August 2002 FOOD & FARMING
A minister's view
and food policies, since it was perfectly must take ihe social demands on obvious that the path taken previously European agricultural policy agriculture fully into account. For this would lead to a dead end. must take the social demands reason it is in our interest to use the forthcoming mid-term review of Agenda on agriculture fully into Today's new agri-food policies are first and 2000 to initiate a fundamental account. For this reason it is foremost geared to the interests of reorientation of EU agricultural policy. in our interest to initiate a consumers. Consumer protection, lull The cornerstones of our reform policies information about production methods and fundamental reorientation at European level were laid out m improved product quality are now the of EU agricultural policy. Agenda 2000, covering the period priorities. These new policies encourage 2000-2006. The key elements are sustainable food production and promote reinforced market orientation and consumer choices that support sustainable quality competition, reduction of production methods. The reorientation of the consumer to discern quality. In production support instruments and more agri-food policies also means becoming Germany, the eco-labelling system offers a support for rural development. more market-oriented in our approach. simple, uniform way for consumers lo There are a number of other reasons This means phasing oui production distinguish organic products from other lor reorienting agricultural policy, subsidies and helping farmers to hold their foods quickly and easily, to the benefit of such as EU enlargement (more farmers own in competitive markets by improved consumers, retailers, farmers and the in the Union), and the World Trade quality and additional services, like farm- processing industry. Products from third Organization (WTO) negotiations based leisure activities. This way, farmers countries or other EU member states can on agriculture. Not forgetting can achieve added value and income in also qualify lor the German eco-label as implementation of the Agenda 2 1 secure rural jobs. long as they comply with the EU standard agreements on sustainable on which ihe label is based. development adopted by the Earth But food safety must be the overriding Summit in Rio de Janeiro in 1992 imperative. There cannot be any compromise Our model is sustainable agriculture and and no doubt up for discussion in this area, since safeguarding health lakes food production. The social costs of "ever al the World Summit on Sustainable priority over economic interests. Placing safe more at ever lower prices" must be Development in Johannesburg. lood on the market must simply be a matter reduced. Natural resources must be of course. All operators in the food chain, preserved for both current and future As well as producing safe food, agriculture from farmers to retailers via distributors, are generations. As organic farming is already renders many important social services. responsible for food safety. Policymakers, clearly geared to sustainability, support for Changing demands from society open up meanwhile, are responsible for providing the organic farming and for sales of organic opportunities to develop new sources of legal provisions and efficient controls people produce is an essential building block in income. Instead of indiscriminately need. The consumer is prepared to reward reorienting agri-food policies. Germany handing out subsidies more or less evenly their efforts, as has been seen in the beef aims to increase the organic sector's share based on the amount produced, socially industry, where demand for beef, which had to 20% of the land being farmed within desired services of agriculture such as fallen sharply, has recovered thanks to 10 years. keeping the land viable for future rigorous BSE controls. generations, providing a habitat for rare Yet this is not all there is to reorienting wild animals and plants, or providing The question of how lood is produced, agri-food policies. The goal is to gear tourist activities, must be rewarded in a handled and processed is gaining farming lo sustainability by supporting targeted way. This is all the more true if importance. Ultimately, it is the consumer environmentally benign and welfare- they cannot be remunerated through the who determines the desired quality of food friendly production methods. In the past market or if they are linked to and how much he is willing to pay lor it. few months, many measures have been requirements the farmers have to meet But to make such a choice, the consumer adopted to this effect in Germany, ensuring such as reducing pesticide use. This is also must also be able to assess the safety and that public money for farming is targeted ihe only way to convince the consumer quality of the foods on offer. This is where to sustainable methods such as improving thai supporting agriculture is in the policymakers come in: to establish the legal animal welfare or preserving biodiversity. interest of society. framework and information requirements An additional priority is to strengthen rural that will enable consumers to make areas as business locations. We must not This way the circle starting and ending informed decisions. Only then will forget that economic efficiency and the with the consumer is complete. Good consumers feel more confident in selecting competitiveness of enterprises are the basic agri-food policies can help strengthen or rejecting certain products and will better prerequisites lo achieve this. Bismarck's delicate plant of trust I quality be rewarded by the market. mentioned al ihe start and return lo Bui a new direction is needed beyond agriculture the social credit it deserves. Comprehensive food labelling is national level il we are to attain our Trust through change must be our particularly important. Uniform labels help objectives. European agricultural policy motto.
18 Observer No. 233 August 2002 FOOD & FARMING
Agri-biodiversity
Sustainable agriculture depends on biodiversity
Kevin Parris, OECD Agriculture Directorate*
Agri-food production relies on biodiversity. Yet farming can weaken it. Increasing food production will mean finding ways of expanding agriculture without
upsetting our planet's biological interdependence.
Natural pest control. Ladybirds are nature's way of controlling aphids and other pests on plants. They are increasingly popular with organic farmers as a natural and effective way of keeping their crops safe.
Earthworms, bees, Ethiopian wild because farming occupies more land than any pollinators for agricultural crops. The barley, peregrine falcons, orchids, other human activity in most countries, it parasitic mite, varroa, in bee populations in mangrove swamps and tropical should be no surprise to learn that agriculture North America and Europe has, for example, rainforest: on the face of it, these might seem and biodiversity are interdependent too. reduced yields for some crops in affected a motley collection, but they are all symbols areas. But in some cases farmers are in a of both the diversity and the fragility of the While biodiversity "richness" differs according constant battle to control invasive species like linkages between agriculture and nature. to climate, terrain, farming practices and so weeds and pests that can harm their stock on, farms based on multiple crops and and threaten crop production. Biodiversity is the term commonly used by livestock with natural pasture are richer in scientists and policymakers to capture nature's biodiversity than monocultural farms. Bui Take the southern maize leaf blight in the richness and diversity, but also its biological most systems, by seeking to maximise the early 1970s that led to a 15% fall in US maize interdependence. In fact, all species on earth yield of a limited number of plant and animal yields and an estimated loss to producers and may to a greater or lesser extent be dependent species, inevitably weaken and reduce consumers of more than US$2 billion. The on one another; each species lhat disappears competition from unwanted species. crop recovered thanks to help from a Mexican may weaken the survival chances of another. maize variety, but it shows that biological On a broad scale, tropical forests, for instance, Farming can affect the worms and soil interdependence is not just about preserving digest carbon dioxide from the atmosphere micro-organisms that play a critical part in wild birds or flowers, but about hard, and produce oxygen. So, without them, our maintaining soil fertility, or the bees that sustainable, economics. In Australia feral future could be seriously imperilled. And provide an important eco-service as populations of mammals, such as rabbits,
191 Observer No. 233 August 2002 FOOD & FARMING
Agri-biodiversity
dogs and foxes, have inflicted economic losses expanding or contracting or affecting nearby on farmers through damage to crops, the Biological interdependence is ecosystems, like forests. The extent of crop spread of disease to livestock and the not just about preserving wild and livestock production species - the genetic destruction of native wild species. birds or flowers, but about resources of farming - are also covered in this layer, as is the effect of support species, like hard, sustainable, economics. Farming develops crop species and livestock earth worms, on soil quality. breeds, as the genetic raw material providing One US government study the basis for food production and agricultural estimated economic losses from The second layer focuses more on structural raw materials, like cotton. Breeding non-indigenous fauna and flora elements that may affect the ability of a farm commercial crop species with wild relatives in the US over the 20th century to support a varied biodiversity, such as the has also played a vital role in combating pests at US$97 billion. variability m cropping patterns, field size, and and diseases. For example, a gene from an the distribution and extent of uncultivated Ethiopian wild barley variety has provided areas such as ditches, ponds and trees usually protection for the farmed barley crop in associated with a greater biodiversity. This North America. endangered species and habitats, but a layer also checks for the impact of different number of countries are beginning to move farming practices on biodiversity: organic, But while farming depends on biodiversity, it toward a more holistic policy approach by extensive, intensive and so on. is also considered a major contributor to its developing national biodiversity plans that loss. The intensification of farm production include agriculture. These plans often reflect The final layer assesses the quality of the across OECD countries has been associated the commitments countries have made under farming system by linding out how many with the decline in certain wild species, both the international Convention on Biological wild species use it for breeding, feeding and fauna, such as the peregrine falcon in Europe, Diversity, agreed in 1992, which aims at the other needs. The richer the biodiversity, the and flora such as orchids. In some regions the conservation of biodiversity, including genetic higher the farming quality will be. That spread of agriculture has led to the loss of resources, wild species and habitats. means actually counting species, a job for valued wildlife habitats, such as mangrove which some governments already earmark swamps in the United States and tropical Pari of the task is to quantify the linkages budgets. rainforests in Australia. At the same time, between human activities and biodiversity. As farming can enrich society through Harvard University specialist, E.O. Wilson, Perhaps not a spectacular framework, maintaining and enhancing a variety of wild comments, "New indicators of progress are but it should help us answer several key plant and animal species and habitats, all of needed to monitor the economy, wherein the questions. What arc the impacts of which have not just economic or scientific- natural world and human well-being, not alternative farming systems, such as organic value, but also recreational, even aesthetic just economic production, are awarded full farming, on sustainable food production advantages, too, such as alpine pastures and measure." In a similar vein the Nobel prize capacity? What are the impacts on water meadows. winning economist, Kenneth Arrow, biodiversity of current farm policies, and in observes, "It would be especially useful the future, of reducing subsidies to One complication is that biodiversity can to develop better data quantifying the agriculture? And are international interests suffer from invasion of introduced species. losses of natural capital we currently in biodiversity and trade liberalisation These can be beneficial, as in the Mexican are experiencing." complementary, or in conflict? maize example, but can be damaging too, whether it be wild mink attacking poultry in This is not an easy task. Few countries have Further work will also be necessary to Denmark or wire grass spreading in Greece. systematic monitoring systems in place lhat explain and monitor these complex, two- A US government study estimated economic track trends in biodiversity In addition, there way, dynamic relationships. Still, it is the losses from non-indigenous fauna and flora are formidable scientific difficulties in linking only way to identify alternative ways to in ihe US over the 20th century al changes in biodiversity associated with achieve sometimes competing public US$97 billion. The question of invasion agriculture to specific policy measures. To objectives while not upsetting Earth's fragile has a new urgency these days, with the overcome some of these deficiencies the biological system. development of genetically modified crops OECD is developing a set of agri-biodiversity and our need lo understand their potential indicators. Note: Wilfrid Legg, Ken Ash and Laetitia Reille also contributed to this article. effects on local species.
The first step has been to establish a common References The underlying challenge is how to expand agri-biodiversity framework or tool that helps OECD (2001), Environmental Indicators for and improve agricultural production - simplify the complexity of agri-biodiversity Agriculture Volume 3: Methods and Results, especially given the projected need lo increase linkages and identifies suitable indicators OECD, Paris. OECD (2001 ), Agri-biodiversity Indicators, global food production by over 20% by 2020 to track trends. The framework depicts Proceedings from an experts' meeting, 5-8 - while securing our planet's biodiversity. Up agriculture in tenus of a three-tier, November, 2001, Zurich, Switzerland, available hierarchical structure. The first and basic to now, the main focus of policy in the area of at: hup:// vvvvvvl.oecd.org/agr/biodiversity/ biodiversity has been to protect and conserve layer refers to farmland itself, to see if it is index.htm
20 Observer No. 233 August 2002 FOOD & FARMING
Development policy
Integrating the Rio conventions in development co-operation
Policy statement by the Development Assistance Committee High-level Meeting, 16 May 2002*
Addressing global exacerbating natural disasters environmental issues is The DAC Guidelines such as Hoods and droughts. This vulnerability risks key to sustainable poverty Integrating the intensifying competition and reduction. Rio Conventions conflict over already strained land and water resources and into Development Co-operation undermining efforts to reduce Nearly a billion households, poverty. For many countries, particularly the rural poor, rely these represent near-term threats directly on natural resources for requiring urgent responses. their livelihoods. But global environmental threats are undermining this resource base. - and must be dealt Biodiversity loss is proceeding at a rapid rate with as part of the in many countries, as is the build-up of development agenda. toxic chemicals. Desertification and drought are problems of global dimensions, affecting Integrating environmental all regions. Greenhouse gas emissions pose concerns in poverty reduction risks to the world's climate and developing strategies and other national countries are likely to be the most àt g planning processes is a priority. vulnerable to the impacts. Three UN -. Global environmental threats, conventions, on climate change, biological *>aaa anc[ jssues 0f global importance diversity and desertification - closely such as desertification and associated with the Earth Summit, held in drought, present us with Rio de Janeiro in 1 992 - address these particular challenges in this threats, which could undermine collective Global environmental threats respect. Their causes and consequences . efforts to eradicate poverty and foster hurt the poor most - respect no national boundaries, but they call sustainable development worldwide. for responses at the international, regional, Although all countries are affected, the poorest national and local levels. Addressing the We recognise that OECD countries bear a are the most threatened because they have causes and impacts of biodiversity loss, special responsibility for leadership on fewer resources to address the root causes of climate change and desertification require sustainable development worldwide, environmental threats and adapt to their measures in sectors such as agriculture, historically and because of the weight they impacts, and because their populations are forestry and energy. Development continue to have in the global economy and highly dependent on natural resources for co-operation agencies, which provide environment. We also recognise the need to their livelihoods. Sustainable poverty assistance in many of these areas, can play an help developing countries address reduction, a central priority on the important role in assisting with capacity sustainable development issues as well as development agenda, is therefore closely building in developing countries to improve the need for further work on global and linked to sound environmental management at the integration of these critical issues in "mixed" public goods. These issues include the local, national, regional and global levels. national planning and policy-making those related to a clean atmosphere and the mechanisms. control of infectious diseases such as malaria We are concerned about the high and HIV/AIDS. Tackling these complex vulnerability of many of the poorest countries We are already working towards this objective challenges will require better coherence in a to desertification and biodiversity loss and to in a number of forums, including through the wide range of policy areas, such as energy, the impacts of climate change. These Global Environment Facility (GEF), but this is trade, health, agriculture, investment and environmental threats impact on rural not enough. The Rio conventions reflect the development co-operation. livelihoods, food security and health, while commitment of all countries to preserve the
21 Observer No. 233 August 2002 FOOD & FARMING
Development policy
global environment, on the basis of common Global Mechanism of the Desertification but differentiated responsibilities and In our capitals, we will Convention and, in the context of climate respective capabilities. They also clearly develop our agencies' capacity change, the new funds established in recognise that meeting national Marrakesh, are all valuable instruments in to recognise critical poverty development needs and responding to this connection. Additional support will be reduction and global global environmental threats must go hand provided through our bilateral programmes in hand. Thus, they are about sustainable environmental linkages and and through multilateral development banks. development, not just about the environment. formulate appropriate responses. We will also support pilot-scale projects in A sound understanding of order to experiment with new emerging Too often, global environmental issues have poverty-environment linkages, approaches, and to demonstrate their been considered as a "stand-alone agenda" feasibility, thereby helping create a critical and the threats arising from of limited concern to national or local mass of concrete experience. global environmental development priorities. In many countries, for example, environment ministries have degradation, is necessary for the Poverty Reduction Strategies been assigned the prime responsibility for formulation of sound policies. implementing the conventions, without We will also help our partners to integrate co-ordination at a government-wide level to global environmental issues in Poverty implement the necessary response measures these issues in our policies and country Reduction Strategies. Country-led planning m key sectors such as agriculture, energy, support strategies. We will also work to frameworks such as Poverty Reduction transport, and beyond. ensure that understanding of these issues is Strategies or National Agendas 21 provide shared throughout our agencies, and not unique opportunities to integrate issues of It is urgent lo recognise this shortcoming confined to the environmental specialists. environmental sustainability in poverty and take necessary corrective action, reduction efforts. This will imply integrating focusing on national development strategies We will also intensify our relationships with the nalional action plans formulated under which respond simultaneously to social, other ministries and agencies involved in the global environmental conventions in economic and environmental concerns. global environmental issues. This will help relevant national, or sub-national, or even to formulate coherent approaches. Our regional-level planning processes. There are many opportunities for "win-win" active participation in international approaches. Tackling environmental negotiations on global environmental issues We will highlight the importance of global degradation should go hand in hand with and m the formulation of national positions environmental issues and their links with improving economic and social welfare. gives us direct opportunities to ensure that development objectives, by systematically Improving food security and livelihoods the agreements made, and the mechanisms putting these issues on the agenda ol our for rural population requires combating established to support them, complement regular dialogues with senior policymakers desertification, conserving biodiversity and our efforts to sustainably reduce poverty from partner countries, in the context of reducing vulnerability to climate change. and reflect our experience in the field. aid programming. Safeguarding the livelihoods of poor landless peasants, pastoralists or forest dwellers We will help our developing country We are already supporting efforts in a requires protecting the ecosystems on which partners meet their commitments and take number of areas which link closely with they rely for food and shelter. Improving advantage of the new opportunities arising one or several issues addressed by the access to efficient fuels and cookstoves from global environmental agreements. Rio Conventions. We will ensure that these improves the health and safety of women and This includes helping our partners avail ongoing initiatives recognise and take children, reduces the burden of fuelwood themselves of incentives provided by maximum advantage of opportunities for collection chores, and also helps reduce emerging market-based mechanisms to win-win approaches. pressures on forests. achieve global environmental goals. * This article is adapted from the DAC statement. The full statement can be seen in the new OECD Priorities In this context, there will be a heavy locus on publication, DAC Guidelines - Integrating the support for capacity development, in the Rio Conventions into Development Co-operation, In our capitals, we will develop our public and private sectors and civil society, available at www.oecd.org/dac. The Development agencies' capacity to recognise critical making full use of available capacity. The Assistance Committee (DAQ is the principal body poverty reduction and global Rio conventions identify a wide variety of through which the OECD deals with issues related to co-operation with developing countries. Its 23 members environmental linkages and formulate fields where capacity development is are Australia, Austria, Belgium, Canada, Denmark, appropriate responses. A sound needed - for example, for compliance Finland, France, Germany, Greece, Ireland, Italy, understanding of poverty-environment with reporting obligations; for scientific Japan, Luxembourg, the Netherlands, New Zealand, linkages, and the threats arising from monitoring and technology assessment; Norway, Portugal, Spain, Sweden, Switzerland, United global environmental degradation, is for policy formulation; and for effective Kingdom, United States, Commission of the European Communities. These countries accountfor some 95% necessary for the formulation ol sound participation in international negotiations on of the world's Official Development Assistance environmental conventions. The GEF, the policies. We are committed to integrate (see News briefs, page 5).
22 Observer No. 233 August 2002 DEVEFOPMENT & FRADE
Food security
Sustainable food for all
Fom Arnold, Chief Executive, Concern Worldwide, Ireland*
The agenda at Johannesburg will be wide and the issues ,- V^V^"*1** "- interconnected, but one -^. -: - &yg - - r thing is clear: food security in developing countries must be a cornerstone of any notion of sustainable development. Mr Arnold offers a course of action. :£ ft *-.
When it was decided some years ago to hold the Summit on *?,:%«: Sustainable Development in . 5*. * , , - f,ft Johannesburg in August 2002, few would «" »- have predicted then that the southern African region would, by now, be in the . grip of a food crisis. The scale of the crisis is frightening. The World Food Programme/FAO estimate that some 13 ^*:*:> : million people in the region are at risk due to food shortages and lack of income to purchase food. Imports of some 4 million Km tonnes are needed over the coming months. Enough food is available in the world, but *-« r . even if massive imports were organised now, Better technology would help distributing them to those in need would be a race against the clock. If these imports do Any longer term notion of sustainability has, wide and the range of issues so inter¬ not take place in time, southern Africa faces of course, to start with the present. Thus the connected, that it is very difficult to reach a humanitarian crisis as bad as, or worse short-run challenge is to get food into the an overall agreement which is practical and than, anything seen on the continent over region, through commercial imports and implementable. the past three decades. food aid, and get it to the poorest people who cannot afford to buy food. The longer But one thing is clear: longer term food So while the Johannesburg summit would run challenge is to ensure that the region, security in developing countries must be a have wished to focus on the degree to and indeed other parts of Africa, do not face cornerstone of any notion of sustainable which the world community has met the recurrent crises of poverty and hunger. development. Using the experience gained commitments it made in Rio de Janeiro in Many of the issues on the summit agenda by Concern Worldwide in the world's 1992, including such long-term issues as are entirely relevant to meeting this longer poorest developing countries over more global climate change, environmental run challenge. than 30 years, I would suggest there standards, and natural resource are five priority issues to be tackled: conservation, there could be, quite literally, One of the risks which the summit will face, democracy and governance; food security; a spectre at the feast - the spectre of in common with many other international technology; international trade; and health, millions of people starving in the region. gatherings, is that the agenda becomes so particularly HIV/AIDS.
23 Observer No. 233 August 2002 DEVEFOPMENF & FRADE
Food security
The achievement of a fairer international Priorities for action especially for something as unglamorotts as agricultural research. Boosting that capacity trading system for agricultural and food First of all, famines today do not occur in is essential. We should look at what farmers products is a fourth priority of Concern, and it democratic countries. That is the key insight are actually doing and help them to do it is one of the challenges facing the WTO's provided by Nobel prize-winning better! Doha trade round. Professor Jagdish Bhagwati economist, Amartya Sen, from his study of may well be right that developing countries many of the famines that occurred during Research should focus on improved cropping have high trade protection themselves (see the 20th century. In a democracy, politicians patterns and mixes which take account of the OECD Observer No. 231/232). But from a food and civil society should sound alarm bells labour constraints on small larms. Customs security perspective, developing countries have and demand action long before a food crisis and habits do exist and must be taken full)' right on their side when they demand greater deteriorates into a famine. So a key element into account: that is what "ownership" of access to the markets of developed countries of any policy aimed at eliminating the development programmes means. The AIDS and reduced levels of export subsidies and obscenity of famine from the 21st century crisis, through deaths and the need to care for supports to rich country farmers. should be promoting accountable government, developing an active civil Fhere is little evidence that International negotiations on agricultural society and supporting an independent trade have proved difficult in ihe past. There the Doha round will lead to news media. is little evidence that the current Doha
such a radical shift in trading round will lead lo such a radical shift in
On the second priority, famine is, of course, relationships that the climate for trading relationships that the climate for the most extreme form of food insecurity. improved food security within improved food security within developing But hunger, m ils chronic form, affects some developing countries will be countries will be substantially improved. So 800 million people. Such malnourishmcnt developing countries, while continuing to improved. Developing countries, stunts physical and mental growth of negotiate the best deal possible, should while negotiating the best deal children and acts as a major blockage to probably take a coldly realistic view of the economic and social development. possible, should probably take likely outcome and plan on the basis lhat a coldly realistic view of the say, over the next five years, it will be their II the number of people suffering from this likely outcome. own decisions, rather than a lairer "silent hunger" is to be reduced, changes in international trading system which will policies and resource allocation are affect their lood security. necessary in many developing countries. Achieving food security depends on real existing sufferers, is reducing labour supply on But one underlying issue lhal will make a big action, not lip service. In many countries farms and, consequently, food production. The difference to lood security is the HIV/AIDS where agriculture is the major economic consequences of this need lo be taken into crisis. This is our key fifth priority: In many sector, and will continue to be so for the account in any applied research programmes. African countries the disease is now al a point foreseeable future, appropriate support where it is having a direct and major impact should be given to improve its productivity. However, most peasant farmers in the on food production and food security The This is a message both for developing developing world are operating at levels of importance of better nutrition in postponing countries and for donor agencies. productivity and output well below what related illnesses and prolonging life needs to could be achieved even with current be explicitly recognised. If this message is accepted, a number of very technologies. They don't have the seeds, the practical consequences follow, some ol fertiliser, the credit, the simple labour-saving II there is one cry from the heart which which may sound old-fashioned but which technologies or, in many cases, the skills to Concern would make to the decision are, I believe, entirely relevant today. There increase productivity. Getting such inputs into makers of the world, it is this: the AIDS needs lo be more investment in developing the hands of the peasant farmers, and making crisis has the capacity to devastate the better agricultural technologies, through an act of faith that they will then produce African continent, and indeed other well-focused research. This is Concern's more ol their own food, and some surplus, is continents, so you must ACT NOW third priority. The little research that exists vital. The debate on what role biotechnology Tom Arnold is chief executive of Concern Worldwide, may be too often removed from the needs of might play in achieving longer term food an international NGO with its headquarters in Ireland. ordinary farmers. Research is about security has tended, up to now, lo generate He is a former Assistant Secretary in the Irish improvement and so should aim al more heat than light - and, given current Department of Agriculture and also worked with the producing results that are relevant to realities, must appear somewhat irrelevant for European Commission. He is also a former Chairman of the OECD Committee of Agriculture. ordinary peasant farmers, not outside most developing countries. It is, however, suppliers or to suit theories of how markets important to acknowledge that, m the longer References could look. term, biotechnology can make a contribution Visit Concern's website: www.concern.ie and that more attention needs to be paid to Concern Worldwide Annual Report, 2001. The truth is, m many African countries, the the legal and political framework within International Food Policy Research Institute national capacity for research is still limited, which it can do so. Annual Report, 2001/02.
24 Observer No. 233 August 2002 DEVEFOPMENF & FRADE
Fargets to meet
Millennium Development Goals Looking beyond the averages
Jan Vandemoortele, Principal Adviser and Group Leader, UNDP Socio-economic Development Group
TY Development is not working yhe Millennium Development Goals mortality by three-quarters; reversing the (MDGs) embody the key dimensions spread of HIV/AIDS; and halving the as well as it might because of human development - poverty, proportion of people without access to safe we are looking too much at hunger, education, health - expressed as a water. These targets are to be achieved by average performance. set of time-bound targets. They include 2015, the comparison point being 1990. halving income-poverty and hunger; achieving universal primary education and It is often said that global targets are easily gender equality; reducing under-five set but seldom met. The real question for mortality by two-thirds and maternal the goals is whether they are feasible and
Observer No. 233 August 2002 25 DEVFFOPMENF & FRADE
Fargets to meet
how we measure whether we are achieving them. Progress to date in areas such as Progress in education has bypassed the poor education, health, nutrition and income in % of children not completing 5 years of education more than 130 developing countries is difficult to summarise. Peru (1996) The 1990s saw many success stories, including a sharp increase in primary Peru education enrollment in Guinea and (1991/92) I Malawi; a halt to the rise in incidences of HIV/AIDS in Senegal, Thailand and Bangladesh Uganda; a sharp fall in child mortality in (1996/97) Bangladesh and the Gambia; improved nutrition in Indonesia, Mexico and Tunisia; Bangladesh and a reduction in income-poverty in (1993/94) II China.
0% 10°, 20% 30% 40% 50% 60% But for each success story, there is another tale of setbacks. The under-five mortality Income Lowest 40% I Middle 40% Top 20% rate increased in Cambodia, Kenya, Malawi groups: and Zambia - an unprecedented trend after Soorce: UNDP decades of steady decline. The primary school enrolment ratio dropped in Cameroon, Lesotho, Mozambique and millions of poor women who have little or bottom-up approach, and ol course many Tanzania. The gender gap in primary no control over how it is spent. Nor do combinations are possible in between. But education widened in Eritrea, Ethiopia and average national indicators take into the evidence suggests that most countries Namibia. Instead of decreasing, account which sections of the population come closer to following the top-down malnutrition increased in Burkina Faso and are actually doing better than before. rather than the bottom-up approach. And Yemen. Access to water became more frequently when average national measures difficult for millions of people; Bangladesh Unfortunately, the poor have benefited show progress il is ihe disadvantaged faced a major problem with arsenic water proportionately little from 'average' groups thai are most often by-passed by poisoning. And countless countries saw progress to date, as evidenced by widening the average progress. their HIV prevalence rate double, triple, disparities in terms ol income, education quadruple, even increase ten-fold - and mortality in many developing Take life expectancy or education. Data severely undermining the feasibility of countries. from more than 40 demographic and most development goals, not just in health. health surveys show that a child from a There are different ways of reaching a poor family is invariably more likely to die Overall, none of the agreed targets for the global or national development target. At before age five than his or her counterpart year 2000 was met at the global level. If one extreme, it can be achieved by from a rich family. Similarly, children from the 1980s were called the "lost decade for improving the situation of the already poor families are less likely to complete development", the 1990s should go down better-off segments ol society - a lop-down primary education than children from rich in history as the "decade of broken approach. At the other extreme, a target ones. Data lor 12 countries in Latin promises". And if current trends prevail, can be achieved by improving the situation America show that over 90% of children in only one millennium development goal of the worse-off population, which is the the highest 10% income earners of the will be reached at the global level by 2015: population complete primary education. that of safe water. The share falls lo two-thirds for children Overall, none of the agreed in the middle-income range and drops But even if the goals appear feasible at the targets for the year 2000 was below 40% lor the poorest children. global level, it does not necessarily imply met at the global level. If the that they will be feasible everywhere, in all Demographic and health surveys for 1994 1980s were called the "lost locations. Averages are commonly used at and 1997 in Bangladesh also show that each level to measure progress, but while decade for development", the improvements in access to basic education these give a good overall picture, they can 1990s should go down in history chiefly benefited children from better-off be misleading. Average household income, as the "decade of broken families, while children from poor families for example, may exist as a useful concept promises". saw little or no improvement. And the in the mind ol an economist, bul bears poor also suffer first when things go little relation to ihe reality laced by the wrong. In Peru, where access to primary
26 Observer No. 233 August 2002 DEVEFOPMENF & FRADE
Poverty reduction
Improvements in access to basic education chiefly For diversity in benefited children from better- off families, while children from poor families saw little or no development improvement. And the poor also suffer first when things go wrong. strategies education worsened in the 1990s, only the Kenichi Ohno, Professor, National Graduate Institute for poor bore the consequences; the non-poor Policy Studies, Japan* were not affected. Improvements seem slow at best to trickle down, but setbacks often tumble down like avalanches. The developing world is far more diverse than those The trend in Zimbabwe offers a responsible for development strategies seem to believe. particularly stark example of the dangers Unless projects are cut to suit circumstances more, they of "average" measures of progress. Between 1988 and 1999, the national average may be doomed to fail. under-five mortality rate decreased by a modest four percentage points, but under- five mortality in the poorest section ol the Walk in the door of the World poverty-terrorism nexus was rediscovered, population actually increased. By 1999, Bank in Washington DC and the world hardened its resolve lo fight children in the poorest quintile had an you will see, above the poverty. The EU and the US have decided under-five mortality rate four times higher reception, a large slogan: Our dream is a lo increase their ODA. In 2002, a series of than that for their counterparts in the world free of poverty. Since 1999, the World international conferences dedicated to richest quintile. Bank has touted poverty reduction as the poverty reduction - including the ultimate aim of development. In September Monterrey conference in March and the In sum, averages are deceiving. We already 2000, the United Nations Millennium World Summit on Sustainable know that, so why do we keep applying it? Summit adopted the Millennium Development in Johannesburg in Some countries appear to be on track for Development Goals (MDGs), a set of social August/September - have kept up the reaching a particular target, based on targets to be achieved by 2015, "with momentum, as well as the hype. average progress; yet the situation for halving the ratio of people in extreme disadvantaged groups in those countries is poverty listed at the top. At the same time, But are donors doing the right thing? With stagnant or deteriorating. So not only was the World Bank is pushing its poverty only targets and procedure and without global progress towards the millennium reduction strategy paper (PRSP) new insight, is it possible to tackle a development goals inadequate in the as the key instrument to be used by the problem as tenacious as poverty, which all 1990s, much of it bypassed the poor. For developing world for reducing poverty. the efforts of the past half-century failed them, being "average" still means dying too But does all this make sense? to eliminate? Despite the renewed young or surviving to remain illiterate and enthusiasm and determination, the global excluded. Development goals should be From a donor's viewpoint, maybe. The drive to cut poverty may go off track if we more targeted than that. So should we. Millennium Development Goals and the do not maintain a sense of balance and When it comes to poverty reduction, we poverty reduction strategy paper are now continuity. really have to perform much better than linked as the end and basically the sole average. means of achieving development, and all The trouble with the global development poor countries are required to draft strategy strategy is that it shifts too drastically every References papers before receiving concessional funds several years to follow new trends. The See the Millennium Development Goals at from the World Bank and the International current universal imposition of poverty http://www.paris21.org/betterworlu7 Monetary Fund (IMF). Moreover, all official reduction strategies may lead us to wonder Vandemoortele, J., "Helping children what became of the development mantras survive", in OECD Observer, No. 223, development assistance (ODA) flows, October 2000, available at including bilateral aid, are to be of macroeconomic austerity and "structural www.oecdobserver.org/news/fullstory.php/aid/ orchestrated by this framework. In the adjustment" required of all highly indebted 373/Helping_children_survive_.html wake of 11 September 2001 , as the countries in the 1980s. This intellectual
Observer No. 233 August 2002 m DEVEFOPMENF & FRADE
Poverty reduction
cascading is partly the result of the This omission could deter progress at the group psychology wilhin national and The trouble with the global implementation stage. international bureaucracies. While the development strategy is that it advocates of development goals and Consider this classification of developing shifts too drastically every strategies proclaim the fight against poverty countries: as a new global consensus, it is not really several years to follow new Middle-income achievers - graduating so. The UNCTAD's new report on the least trends. Whatever became of the from ODA and becoming competitors in the developed countries calls for the creation of development mantras of global market and partners in international co-operation (examples: Malaysia, Chile); global growth links, not poverty targeting, macroeconomic austerity and in countries with generalised poverty. Late industrialisers - still very poor, "structural adjustment" in Suppressed discontent with the current promoting growth by building infrastructure the 1980s? pro-poor fervour is detectable in all major and new trade and investment ties while international organisations, including the attending to social problems (example: World Bank. Vietnam); an additional USS40-60 billion - or Resource-rich - installing mechanisms to One key problem is lhat poor countries doubling the global ODA - is required use revenue productively, avoid are diverse in their socio-economic annually to achieve the Millennium overvaluation and soften price shocks structure as well as causes of poverty. Development Goals. Their calculation is (example: Kazakhstan); A globally common framework, whether based on two alternative assumptions, the Small and isolated countries - steady for reducing poverty or otherwise, cannot one on generating growth through implementation of modest but realistic possibly serve all developing countries productive investment and the other on measures to support agriculture, handicraft, with different needs and aspirations. counting up the cost of "pro-poor" tourism, mining, transportation, etc. The current drive has diverted our measures on health, education and so on. (example: Laos); attention from this fundamental point. Bui we still have not figured out what Poverty alleviators - building policy and The World Bank economists estimate that combination will work in each country. administrative capability to execute
Social vision
Nguyen Thi Than, a blind teacher, leads blind children
lo class at the
Bung Sang, or "flashlight", school for the blind in
Vietnam's Ho Chi Mirth City in 2000. The school
launched a European-funded computer project last month aimed at increasing learning opportunities for some of Vietnam's 60,000-70,000 blind schoolchildren.
The students use special audio and speech programmes as well as braille keyboards to control the computers. Further demonstration of Vietnam's innovative approach to development.
28 Observer No. 233 August 2002 DEVEFOPMENF & TRADE
Poverty reduction
Alternative development strategies
World Bank and UN approach Vietnam's approach Cut poverty Promote equitable growth
Millennium Declared national Poverty Equitable Goal: goals and Goal: vision and growth reduction growth 1 strategy papers ( targets
Means: Means:
Pro-poor policies Growth policies Growth policies Social policies
pro-poor measures and achieve social catching up with ihe forerunners. regional environment which encouraged integration (examples: Bolivia, Uganda); Poverty fell sharply, but this was the result this. But even without such an advantage, The fragile and unstable - with of a successful transformation through individual countries can also meaningfully international involvement, creating political international integration, not the cause. integrate with the world as traders and not stability and supplying basic needs in permanent aid receivers - witness the preparation for future development Vietnam became the first East Asian country success of Chile. There is no reason why (example: Afghanistan). to complete a full poverty reduction strategy such a strategy should be denied to paper in May 2002. But the strain of an Sub-Saharan Africa either. The list is not meant to be exhaustive, externally imposed poverty reduction Professor Ohno advises the Japanese government but 11 does at least point to the need for framework on this growth-hungry economy on aid policy. diversity in development policies. In became apparent. The country already had a References formulating the development strategy, five-year plan and a ten-year strategy which Devarajan, S., Miller, M.J., and Swanson, each country must be carefully diagnosed defined national goals of doubling GDP by E.V (2002), "Goals for Development: 2010 and achieving industrialisation and with the strong participation ol its History, Prospects and Costs," World Bank government. If the wrong medicine is modernisation by 2020. All fiscal resources Discussion Paper No. 2819 (April). prescribed to the patient, it is ineffective at were mobilised accordingly. When some Downloadable at http://www.worldbank.org/ best and does serious harm at worst. eager donors insisted that their poverty Easterly, William (2001), The Elusive Quest International organisation strategies are reduction strategies were the supreme tool for Growth, MIT Press. Ohno, K. (2002), "Development with essentially aimed at poverty alleviators, and for resource allocation, the Vietnamese Alternative Strategic Options: A Japanese government sternly rejected the idea. The cannot be presented as a cure for all the View on the Poverty Reduction Drive and others. True, Sub-Saharan Africa suffers from differences were papered over, and the Beyond," GRIPS Development Forum Policy widespread poverty But even so, surely it is resulting document - renamed the Note No. 1 (May). Downloadable at up to each developing country, not the aid Comprehensive Poverty Reduction and Growth http://wwwl.oecd.org/forum.2002/speeches/ index. him donors, to decide whether cutting poverty Strategy - is lauded as a model by the Ohno, K. and Ohno, I., cds. (1998), Japanese should be the only national goal. World Bank! But shouldn't we rather have Views on Economic Development: Diverse Paths supported Vietnam's own growth strategy, to the Market, Routledge. In East Asia, economic growth was realised instead of trying to replace it with an United Nations Conference on Trade and by staggered participation in a regional entirely new one? Development (2002), The Least Developed production network linked by trade and Countries Report 2002: Escaping the Poverty investment. One after another, countries With pride and ownership, each Trap (June). Downloadable al http://www.Linctad.org/ with different stages of development joined developing country should be able to National Economic University and Japan this network and improved domestic select a mix of strategies from a broad International Cooperation Agency, Joint capability under iniense market pressure. menu lhat includes, among other options, Research Project on Vietnam's Trade and For them, development was not a question growth driven by trade and investment. Industrialization Policy under International of poverty reduction but a social process of East Asia was particularly lucky to have a Integration. See: http://www.neujica.org.vn/
29 Observer No. 233 August 2002 DEVEFOPMENF & FRADE
Frade & environment
Trade and environmentt
Striking a balance
Ronald Steenblik and Dale Andrew, OECD Frade Directorate
Are tree trade and flk the environment » * compatible? Yes, and /\ if certain conditions t \ are met, they can / strengthen each i other. ^ , - * -*ïff^ r2 ii4 "2pÊ V# S ~v eveloping countries want to - "^^ 1 boost their income through ^WV:m"-. ' . , *^ v-^^ ^Sk> *. 1 S exports. Importers, '^^^^^* ^^^ particularly industrialised countries, [* ^w want to ensure that imported goods 'jr JHfe|^^ meet their own domestic B^f" A requirements for health, safety and © ® the environment. Their consumers w may also want to minimise the % q environmental impact of producing so l i cm n 1 nfirp rr/in^r In tKo.inj «Ilia UJlllg LI1UJL QJCJCXD. L L 1 Li-lL-V/lV, these goals are compatible. In Benefiting from greener trade practice, however, it can be more complicated, as there can be different ways to website, "Abiding by environmental with cages (known as "turtle excluder reconcile these objectives, some of which requirements can be burdensome lor an devices", or TEDs) that let shrimp through affect developing countries more than others. exporter, lor example when an exporter into the net but allow turtles to escape. wants to sells its products in a country that Research carried out by the United Nations requires recyclable packaging." The WTO The problem appeared to have been solved. Conference on Trade and Development goes on to point out that the Committee's at least in US waters. But environmental (UNCTAD) has shown that some developing work is "not to get rid ol the environmental groups and the US shrimp-fishing industry countries have suffered considerable export requirements, but to strike an appropriate were unsatisfied. US fishermen felt that the losses due to an inability to respond to balance between trade and environmental measure gave foreign fishing fleets an unfair developed country environmental standards objectives." advantage in their market, while and regulations. The point was underscored environmental groups wanted to see the in the Doha Development Agenda adopted Trade and environmental objectives should scheme enforced on an international level. by World Trade Organization (WTO) be able to reinforce each olher, though This soon led to the US authorities ministers in November 2001. The ministers getting there can be a painstaking process. extending the measure; embargoes were then instructed the WTO Committee on Take a seemingly straightforward imposed on shrimp imports from any Trade and Environment (CTE) to pay environmental problem such as the country without a turtle protection scheme particular attention to the effect of drowning of endangered sea turtles in similar to lhat of the United States. environmental measures on market access, shrimp trawl nets. Having identified the especially in relation to developing problem, the United States proposed a To protect their exports, several countries and, in particular, the least- simple solution: all such nets operating in neighbouring countries then passed laws developed. As explained on the WTO US waters would be required to be fitted requiring their shrimpers to use TEDs.
1 30 Observer No ? ,3 Auvusl 700? DEVEFOPMENF & FRADE
Frade & environment
Costa Rica was one of them. However, the more easily understand and apply organic devices, imported from the United Stales By not taking into account the methods. Farmers who convert to organic and designed for fishing conditions faced by special circumstances of production expect to receive higher prices for US fishermen, were soon found to be their produce than they did previously, and particular countries or unsuitable for use in the shallow, debris- that requires being certified to sell under an industries, one-size-fits-all clogged waters in which Costa Rican organic label. Yet the local certification fishermen trawled. Heavy, blocked-up cages policies are less likely to bodies in many countries are not accredited meant that more fuel had to be consumed succeed, and may create by the importing countries' authorities. It is and fewer shrimp were caught. It was found resentment even if they do. this accreditation that is at issue, not that, in Costa Rican waters, trawling with a necessarily the environmental standard itself. TED designed for US conditions yielded on And it leaves farmers lhat want lo export average 70% debris and 30% shrimp. with no choice but to pay the high cost of do not come as a surprise. This trend certification by a certifying body recognised In such cases, where changes in processes certainly marks an improvement over earlier by, and usually based in, the importing or production methods are required, practice, when sometimes the first time that country. knowledge about how to meet new a developing-country exporter learned of a standards under local conditions may be new regulation - e.g. a limit on pesticide Just as developed countries and NGOs have lacking, for instance because of insufficient residues in tea leaves - was when shipments genuine environmental concerns about prior research. By not taking into account of his goods were rejected at the importer's imports, developing countries can face the special circumstances of particular border. genuine difficulties in responding to those countries or industries, one-size-fits-all concerns. There are certainly situations policies are less likely to succeed, and may WTO rules also encourage countries to base where imports of products that threaten create resentment even if they do. In the their regulations on internationally agreed health, safety or the environment should be event, the Costa Rican authorities came up standards, and many follow that advice. But with a modified TED that better suited their what if no agreed international standards WTO rules encourage countries own local conditions, and were eventually exist? The number of such situations is to base their regulations on able to convince the US authorities that more common, perhaps, than is usually their device offered an equivalent level of perceived. Many countries simply adopt a internationally agreed standards. turtle protection. regulation similar to that already applied But what if no agreed elsewhere. Thus many OECD countries, international standards exist? Cases such as the one on TEDs show that starting with Japan in 1973, have there may be scope for designing established limits on formaldehyde in regulations that can more easily be adapted garments and similar textile products. to local conditions while still satisfying the However, when the Netherlands recently discouraged. But in general, regulators and environmental objective. A general problem decided to establish a limit of its own, it other standard-setting bodies should give for developing countries, however, is lack of undertook new tests lo evaluate the more thought to the possible effects of their capacity to meet such requirements. This potential risks of human exposure to the measures on exporters. And when an can take many forms: difficulty in tracking chemical through clothing. It found lhat exporting country makes a good-faith effort and understanding proposed new most of the formaldehyde (which is used, to embrace emerging environmental norms, environmental measures; inadequate for example, in textile finishing as an anti- OECD countries should do their utmost to technical facilities and expertise to monitor creasing agent) present m new clothes is help them comply, for instance by providing compliance with importers' requirements; removed during the first wash. The Dtilch technical advice in operating cleaner or insufficient capital to invest in new, less maximum residue limit reflects this technologies. Then we would have a environmentally harmful processes and distinction and is an easier regulation for much better chance ol demonstrating production methods. developing-country exporters to meet. that free trade, development and the environment can work together as a Where environmental conditions allow, But regulations pertaining to food and coherent whole. That would make us all providing developing countries sufficient beverages are where issues related lo better off, not just the sea turtles. time to react to a regulation before exports compliance arise most often. It is more and begin to be affected can help address the more common among developing-country References first problem. Under WTO rules, new farmers, when faced with a stringent Identifying good practices to minimise adverse technical regulations have to be notified to pesticide residue limit, to respond by trade impacts from environmental measures, and to help developing-country exporters other members before they come into force. converting to organic production methods. meet new environmental requirements, is one Some OECD countries are going beyond Although in some cases integrated pest of the aims of an ongoing project led by the this requirement and consulting with management (1PM) would suffice, the cost of OECD. See www.oecd.org/ech/tradenv foreign exporters or taking other steps to applying IPM and the necessary knowledge WTO, see www.wto.org ensure that their proposed new regulations may be out of reach of the farmer, who can UNCTAD, see www.unctad.org
31 Observer No. 233 August 2002 DEVEFOPMENF & FRADE
Fishing
Fish crisis
A problem of scale
Carl-Christian Schmidt, OECD Fisheries Division
No competition
The earth is mainly Fishers have good cause to be unhappy The world's fish harvest has reached a these days. Their resource is dwindling plateau of 100-120 million tonnes of fish ocean, yet our seas for a start, and yet their prices are with about three-quarters of that going lo are being overfished. being forced lower by competition from human consumption and the remainder to The tools to help the alternative cheap food sources. feed compounds to feed pigs, hogs and for Environmental pressures to go easy on the farming fish. The amount of fish harvested fishing sectors adjust seas are intensifying, in particular to allow has not changed much over the past five are there. Now it is recovery of fish stocks and certain species of years and so it would seem thai the sea's time to implement fish that are in danger of depletion. Add to harvest capacity has been reached and will the list the growing problem of marine yield no more fish. them. pollution and even global warming, and there really seems to be no end to the plight With fewer fish and less income of fishing communities. policymakers have responded all too quickly to calls from fishers for subsidies. Rather than Still, there are ways forward, though they restructure and institute appropriate demand tough measures both to stop the management regimes, the result has been massive overuse of national fishing increased fishing capacity. In the meantime resources and lo tackle the global problem the fish have not come back and the of illegal fishing by displaced fleets. underlying economic situation has worsened.
32 Observer No. 233 August 2002 DEVEFOPMENF & FRADE
Fishing
Yet, something has lo be done to secure the On the plus side, many new legal A world-wide population nearly sustainability of fisheries and the people- instruments, guidelines and so lorth have the size of that of the United that depend on this living resource. At least been developed. International organisations two problems need addressing: the first is have provided economic analysis, States depends on fish. But there reforming domestic fishing industries and assessments of the consequences of action is such an enormous mismatch fisheries management, and the second is to or non-action and sels ol guidelines for between excess fishing capacity stop the spread of uncontrolled fishing on sustainable and responsible management and the ability of the sea to the high seas (see box, page 34). regimes. One such is the FAO Code of produce fish that the only option Conduct for Responsible Fishing from 1995, which seeks lo guide national is radical reform. Perhaps the National capacity authorities contemplating fisheries reform. moment is right to make some The FAO reported in 2000 that, globally, an It suggests clever arrangements, like voluntary codes more binding? estimated 25% of the fish slocks are under government buy-back ol vessels that are or moderately exploited, 50% of stocks are then decommissioned, or tradeable fishing fully exploited. 1 5% are over exploited and quotas, which several OECD countries are Consequently fishers' incomes have about 10% have been depleted or are now applying lo help reduce capacity. continued to fall. There are exceptions: over recovering from depletion. OECD countries the past decade Iceland reformed its fishing are responsible for 25-30 million tonnes of The OECD has also analysed measures to sector by squeezing capacity and imposing fisheries or aboul a fifth of the world total. assist fishers in transition (see references). strict catch quotas and today profitability is As most of the fish stocks are under An important lesson has been that rising and fish stocks recovering. Same in national jurisdiction (in excess of 90%), it is policymakers should cover all aspects of New Zealand where the introduction ol an al the national level where policy reforms, fisheries, from harvesting, to marketing to efficient fisheries management regime has in partnership with fishery stakeholders, consumers. Such a holistic approach adjusted the sector and made it a profitable have to take place. involves a realignment of the various sets of business. But it takes political courage and policies that affect both harvesting and post- bold decisions. The trouble is, there is such an enormous harvesting seclors, like distribution. Market mismatch between excess fishing capacity intervention, for instance, that lowers prices Granted, natural phenomena have also (vessels, gear and fishers) and the ability of on undersized fish or roe-bearing taken their toll on the marine fisheries the sea to produce lish that the only oplion crustaceans, would remove the incentive for environment: El Nino - a disruption of the is to radically reform the sector. Everyone fishers to catch them and for distributors lo ocean and atmosphere in the tropical Pacific would benefit; with efficient management market them. Labelling may be another - has ravaged both Chilean and Peruvian systems, more lish could be taken out ol instrument, as witness the advenl of fisheries; likewise some fishers in the the sea for less, while at the same time dolphin-sale tuna, which won consumer North West Atlantic blame warmer waters replenishing and securing the future of support to such an extent that tuna without and pollution for the scarcity and erratic the resource. Bui while the immediate that label cannot be sold nowadays. migration patterns of coldwater lish adjustment might hurt fishing like cod. But it is inadequate fisheries communities, the price to pay ol doing OECD countries spent US$5.5 billion on management and policies lhal are mostly nothing would be even higher in the government financial transfers to the to blame. long run. fisheries sector in 1999, most of which
Quite bluntly, too many fishers are chasing Flatter fish production too few fish. Over 30 million fishers around Trend and projection in world fish production by region, 1980-2020
the world make a living directly from the Million tonnes
sea, with an additional 200 million or so 100 being dependent on fisheries through family p^^m or work in related activities and industries. This means lhal a world-wide population 60 nearly the size of that of the United States Acta- Projected depends on fish. Some of these people need 40 fish not ]ust for income but are totally dependent on the seas for their subsistence. 20 Quite apart from some African coastal
countries thai would simply starve without 0
lish, even wealthier countries, like Iceland, 1980 1985 1990 1995 2000 2005 2010 2015 2020
as well as parts of Canada or Japan, would m OECD HI Non-OECD probably suffer considerable hardship were Source: OECD they suddenly to stop fishing.
33 Observer No. 233 August 2002 DEVEFOPMENF & FRADE
Fishing
(74%) was for general services, including need. It will not be easy. Some fishing fisheries treaties and other international monitoring, research, and enforcement, countries in the developing world not only negotiated texts that have been carved out which are prerequisites for sustainable lack proper fisheries management regimes over recent decades. Again, the FAO Code of fisheries. However, most of the money and institutions to manage fish stocks, but Conduct is a prime example. Although only a could be used more effectively to get fishers many simply cannot afford to monitor and voluntary code, countries should seriously and fleets out of the sector, with retraining survey fisheries even in their own Exclusive consider implementing it and explicitly programmes into olher related occupations Economic Zones. Also, there may be no incorporating its philosophy and like coasl guarding, tourism or recreation. alternative to fishing in the local economy. recommendations into national legislation. And quite clearly for some fishers early In other words, adjustment at sea must One luxury we do not have is time. Perhaps retirement is yet another option. The happen as part of a wider development the moment is right to make such voluntary solutions are there. What's missing so far is drive. Nevertheless there are developing codes more binding? Such a move would the political will to carry them through. countries, like Senegal, Indonesia and send an important signal to the world about Argentina, thai do well out of fishing and the seriousness with which we treat our For developing countries, the situation may export their products to the OECD area. oceans and fisheries. And in the long run, it be more complicated, particularly These countries could perhaps benefit bom will cheer up the world's fishers too. financially. And yet neither can they afford some finance to help them adjust, though not to adjust. For some of them, the their main requirement would be in References incentive to change is very great indeed, management and know-how. OECD (20001, Transition to Responsible given their slake in managing the future of Fisheries: Economic and Policy Implications, OECD, Paris. fish as their main source of food and A positive step would be lo use occasions FAO (1995), Code of Conduct for Responsible protein. OECD countries have to show the like the Johannesburg summit on sustainable Fisheries, FAO, Rome. way though, and help poorer countries development for participating countries to FAO (2000), The Stale of World Fisheries and acquire the knowledge and capacity they strengthen their commitments to the various Aquaculture, FAO, Rome.
Inconvenient flags resources under their jurisdiction. FOC fishing activities undermine One key problem is how to stop the work of the likes of the displaced national fishing vessels International Commission for the from searching for fishing Conservation of Atlantic Tuna, the opportunities on the high seas and Commission for the Conservation of even re-flagging to jurisdictions lhat Southern Bluefin Tuna and the do not provide proper surveillance of Convention for the Conservation of fleet activities. Indeed, the number of Antarctic Marine Living Resources, vessels fishing under Hags ol that were set up to protect particular convenience (FOC), many of which hot spots. are of OECD origin, has risen in the past decade. Sterner international action and commitment is needed to rein in Although FOCs make up only 6% FOC activities and Johannesburg of the world's fishing fleet, the provides both nations that are fact that they can avoid fisheries retiring fishing vessels and the management measures means they countries that provide the flags of have lower costs and so have an unfair convenience a chance to sort matters price advantage over fishers that out. The FAO International Plan of follow the rules and observe good Action for Illegal, Unregulated and conservation practices. They may not Unreported Fishing provides the catch a lot of fish but the fish they framework lor doing so. But where catch are of high economic value, like there's a market, there's a trade. So, luna, swordfish and Patagonian in addition to firm diplomatic toothfish. The direct problem is one of pressure, countries may need to not adhering to international rules, impose measures to stop the illegal insofar as they exist, but indirectly circulation of fish. Import these fish could have been caughi restrictions for use specifically within national waters through which against vessels and countries that they often migrate. disregard international rules and standards, plus certification Most illegal fishing takes place on the high management organisation has been set up to schemes and labelling are all areas that seas where the governance structure is deal with the issues. However, FOCs make it should be explored and used. Such controls weak and where fishing is a free-for-all extremely difficult for regional fisheries would benefit not only fishing resources, enterprise, unless a regional fisheries management organisations to control the but markets too.
34 Observer No. 233 August 2002 ENERGY
Choices
Global warming What comes after Kyoto?
Burton Richter, Paul Pigott Professor in the Physical Sciences and Director Emeritus, Stanford Linear Accelerator Center, Stanford University, California, and 1976 Nobel Laureate in Physics
The debate about energy mix will intensify at Johannesburg and beyond. Technological progress may generate some useful surprises in the years ahead, but for now, Professor Richter presents cold look ahead at our energy choices.
Every study of global climate change has concluded that world average temperatures are rising and that the cause is greenhouse gases, mainly carbon dioxide. These are poured into the atmosphere by our ever-increasing use of carbon-based fuels (coal, oil and gas) that power almost all the worlds energy systems. The world economy is growing and a continuation of the present mix of fuels will make the greenhouse gases in the atmosphere accumulate ever faster. Bringing this runaway problem under control, while continuing economic progress, requires massive shift away from carbon-based fuels.
The first concerted international attempt at Kyoto will have an insignificant effect on reductions. In the year 2012, the clock controlling climate change is the Kyoto emission of greenhouse gases. Kyoto aimed to measuring the increasing level of greenhouse Protocol. The ratification process was long and reduce emissions by the industrialised world gases in the atmosphere will not be set back contentious, and the nations who have signed by 2012 to 5% below what they were in to 1990, but only lo about 2008. It is actions the Protocol have a great sense of satisfaction 1990. That sounds like progress, but the bad beyond Kyoto that will count. that they have finally done something about news is that economic growth projected for global warming. However, they have not the developing world during that period will A look into the future shows the true actually done much; meeting the goals of increase emissions by much more than those dimensions of the problem. By the year
Observer No. 233 August 2002 351 ENERGY
Choices
governments anything beyond the next year less primary energy in 2050 than general election is an eternity, particularly if presently projected. World energy spending action has significant immediate costs. would also be nearly a trillion dollars per year less than present projections. This is Compounding the problem is a tendency not easy to achieve, but, as mentioned, the for society to rely on science and best opportunity lies in the developing technology for a quick fix to any serious world where most of the increase in problem. After all, science and technology population and energy use is projected to have transformed our society and they occur, and where energy intensity is should be able to come to our rescue, say currently about three times higher than in many. That will not work this time because the industrialised world. carbon dioxide remains in the atmosphere for about a hundred years. Even if we could The easiest and fastest way to improve somehow today replace all of our energy energy intensity is by putting modern, sources with ones that emit no greenhouse efficient energy systems into places where gases at all, it would still be more than a new ones are needed, rather than by century before levels in the atmosphere retrofitting or scrapping old systems that returned to near those of the still have some useful life left. For example, Professor Richter pre-industrial era. a modem, natural gas fired power plant is about 50% more efficient than an old coal Because of the coupling of energy to the fired power plant. China has already begun Studies show that as far as economy, the existing investment in energy to do this; in the second half of the 1990s human health is concerned, only systems, and the huge new investment in their economic output increased while their energy systems required in the next 50 wind energy is more benign than carbon emissions actually declined. years, bringing the climate change problem nuclear. We live in a bath of under control becomes more difficult the Efficient systems may be more expensive to natural radiation, and nuclear longer significant change is delayed. The install than old style systems, although they energy increases exposure by a carbon dioxide concentration will increase create savings m the long run. The negligible amount. and become harder to stabilise at a industrialised world can help enormously in sustainable long-term level. Climate change reducing carbon dioxide emissions by is like a huge truck that is accelerating as subsidising the difference in cost between more and more greenhouse gases go into the two for the developing world, as well as 2050, world population will increase to near the atmosphere. The sooner the brakes are by increasing the efficiency of their own
ten billion from today's six billion, world applied, the easier it will be to bring it systems. economic output will triple in real terms, and to a stop. primary energy use will double. Much hope is placed in carbon-free energy I use here and below population figures from Conservation and efficiency should come sources, but, among these, only nuclear the United Nations middle scenario, and first on the world agenda for mitigating energy can be expanded on a large scale economic projections from the International greenhouse gas emissions and their effects. today. It faces fierce opposition from some Institute of Applied Systems Analysis (IIASA) The cheapest and best carbon-free energy on four issues: radiation, accident potential, scenario B - middle growth (see graph page source is energy not used. Built into the waste disposal, and the availability of 37). Olher organisations make projections IIASA and other projections of future energy material for nuclear weapons. The first two that agree closely with these. use is a decline in what is called energy are greatly exaggerated by opponents. intensity (primary energy used per dollar of Studies show that as far as human health is Most of the increase in both population and economic output) of 1 % per year. This is concerned, only wind energy is more energy use will occur in the developing included in the projections to 2050 that benign than nuclear. We live in a bath of world and this is good for the alleviation of give a world primary energy requirement of natural radiation, and nuclear energy poverty. It is also here that there is a real 27 terawatt-years per year, compared to increases exposure by a negligible amount. opportunity for change, but before today's 14. (One terawatt-year equals the discussing that, it is necessary to consider energy content of about 750 million tonnes Analysis of waste disposal methods has been one more key issue: Time. of oil; all of Western Europe, for example, underway for years and so far no real currently uses only two terawatt-years per problems have been encountered. Storage in Time is an essential factor. It is hard to year of primary energy). appropriate underground rock formations make governments see the need for action will work, though it would have to be done as clearly as the science community does, If the rate of decline in energy intensity on an international basis because not all because serious impacts of climate change could be raised to 2% per year, the world countries have appropriate sites. Other will not occur for decades. To most economy would use 10 terawatt-years per methods are under study including one,
36 Observer No. 233 August 2002 ENERGY
Choices
transmutation, lhat might decrease the Energy use required isolation time by a large amount. Projected world primary energy consumption, middle growth
Increased risk of weapons proliferation from an expansion of nuclear power is a concern. Gigawatt-years We live with it now, and will have lo design ou.ouo future systems to minimise the risk. 1 note I Developing that terrorist groups would find it very 45,000 difficult to extract weapons grade material | Reforming from spent nuclear fuel. 40,000 | Industrialised Other alternatives often discussed are three carbon-free energy sources: solar, wind and biomass. Solar and wind are low energy- 30,000 density systems requiring much land. For example, a 1 ,000-megawatt average power 25,000 solar electric system placed at the equator would require 20,000 hectares or 70 square 20,000 miles of land, more than one hundred
times that required for a nuclear or natural 15.000 gas plant. Solar and wind also suffer from the problem of intermittence: the sun 10,000 doesn't always shine, nor does the wind always blow. Both will have important roles 5,000 to play and their further development should be fostered, but I doubt they can be 0 deployed on the terawatt scale m the 19 90 2000 2010 2020 2030 2050 2070 2100 foreseeable luturc.
Source: Inte mational Institute of Applied Systems Analysis (IIASA) Biomass aims to grow plants to use as luel in power generation. The carbon in the plants comes from the atmosphere and goes back the carbon dioxide produced when il is ignoring what the economists call when burned as fuel, in theory giving no net burned and to pump it deep underground externalities, such as environmental increase in carbon dioxide. However, this is or deep into the ocean, thus obtaining the degradation and the cost of clean-up. So, an even lower energy density system than energy while burying the greenhouse gas. in long-term environmental issues, it often solar or wind. I know of no complete analysis This has not gone far enough to know if it turns out that bad is good and good is of biomass that includes land use, water is workable. bad. For example, the quickest route to requirements, fertiliser needs, transportation, increasing GDP would be to expand energy etc. If this is to be anything more than a local Global warming will have very serious by building more conventional power source, such an analysis is needed. consequences and the sooner we start a plants. The cosl of future clean-up is hidden much larger effort than lhal in the Kyoto in the externalities that are not included in One other potentially large-scale system is Protocol, the better off we will be. There are analyses because the methodology does not being examined, called carbon dioxide many options for ihe long term, but the one exist. If such things were included, I expect sequestration. The world has enormous to emphasise now is conservation and we might gel very different answers. reserves of coal and the idea is lo capture efficiency My next choice would be nuclear energy, but others will have different The World Summit on Sustainable preferences. Still, if we can reduce energy Development this summer in Johannesburg Most of the increase in both intensity more rapidly than the historic- may bring an increased awareness ol the trend, we will have a bit more lime to sort problems. Il will be difficult to galvanise population and energy use out those choices. governments until we have mainstream will occur in the developing "sustainability economics" to go with world and this is good for the Doing anything sensible about energy will sustainable development. A policy of alleviation of poverty. It is be difficult and a major part of the difficulty business as usual will surely result in severe also here that there is a real is the perverse answers lhat todays problems 50 years from now. This will be economic analysis gives. Al present, our grandchildren's problem, but they arc opportunity for change. economic progress is measured in terms of too young now to do anything about it. the current rate of increase in GDP while We had better begin.
371 Observer No. 233 August 2002 ENERGY
Fradeable permits
^P\ Trading in pollution
One way to deal with pollution is to encourage polluters to buy and sell limited rights or permits to pollute. It is a market that works, though improvements are needed.
A 50% fall in emissions over 10 years: affected units of SO2 in 1990, emissions fell to this might sound like fantasy but is less than five million by the end of the decade. exactly what the United States Moreover, this was achieved at much lower Environmental Protection Agency's Sulphur costs than had been anticipated: original Dioxide (SO2) Program (the "Acid Rain" estimates of permit prices in the first phase of programme) achieved in the 1990s when it set the programme had ranged between US$181 up an "air market" of tradeable permits. The and US$981, but actual prices have hovered first programmes often placed significant programme, which came into force in 1995 around US$150 and have rarely been in excess regulatory constraints on trading. Some have following the Clean Air Act Amendments five of the lower band of estimates. adopted fairly cumbersome systems, such as years earlier, introduced flexibility into pre¬ basing the creation of permits on emission existing regulations mandating the use of flue- The Acid Rain programme is not an isolated reductions below an agreed baseline: The gap gas desulphurisation for electricity-generating case. Other successful efforts to introduce between the polluter's improved performance plants. Instead, it gave firms the right to tradeable permits reduced lead in gasoline, cut and the baseline would become a permit, determine their own compliance strategy, ozone-depleting substances, and other which they can then sell to others. Good in including the right to purchase tradeable pollutants, like oxides of nitrogen. Now, other theory, but it demands paperwork, not least in emission permits from other firms. countries are following the US example, with trying to define the baseline. notable programmes for a variety of pollutants In short, a cap on total sulphur dioxide starting or in existence in Canada, Denmark, The lessons are that tradeable permits markets emissions was set, and the total permits issued the Netherlands, the United Kingdom, and should be broad to ensure competitiveness among firms generating sulphur dioxide was elsewhere. and enable efficiency gains. The rules should equal to this cap. Firms could then trade these be easily understood to encourage participants permits among themselves: those firms Perhaps more importantly, the Kyoto Protocol to exploit the market as fully as possible. And generating more emissions than their initial has endorsed the use of tradeable permits on while single undifferentiated markets appear allocation would buy permits from firms that an international scale, as a means to address to work for carbon dioxide emissions whose generated fewer. The total number of permits climate change. Indeed, it is paradoxical that effects are widespread, markets for pollutants would remain stable, but the distribution of the United States has refused to ratify a with different effects must take account of permits among firms would change with the protocol which endorses an instrument that local "hot spots". market. they have pioneered. Instead, the baton has been taken up by countries such as Denmark Tradeable permits can work, but they are This made the programme environmentally and the United Kingdom, who have developed under-used by OECD country governments. effective, as well as reassuring regulators and tradeable penmt programmes for carbon This is part of the problem, since they need to the public (including environmental NGOs), dioxide in anticipation of an EU-wide scheme. be tried and tesled more if they are to be that tolal emissions would not exceed a certain improved. This is likely 10 happen in ihe years limit. The system was also economically However, not all tradeable permit systems have ahead. The EU carbon dioxide programme, efficient, because high-cost abaters bought had similar success and many have resulted in which is expecled 10 get under way in 2005, permits from those who could abate at lower few trades and precious few efficiency gains. will be watched with interest. R.J.C. cost. And it encouraged managerial and This has been particularly true of the first References technological innovation as emitting firms and American water pollution tradeable permit OECD (2002), Implementing Domestic Tradeable others sought out the best ways to meet the regimes. One reason for this is the fact lhat in Permits: Recent Developments and Future regulatory requirements. Meanwhile, the some cases there were very few participants, Challenges, OECD, Paris. installation of continuous monitoring devices since the scope of the market was determined See www.epa.gov/airmarkets/trading for data on by the firms themselves reduced the govern¬ by the affected river or lake. Moreover, those the permits market. ment's administration and enforcement costs. finns that were involved often had similar Ellerman, Denny et al (2000), Markets for Clean Air: The U.S. Acid Rain Program, Cambridge technological opportunities to reduce their University Press, New York. The test was in the results, of course. From effluent, so narrowing the scope to increase See also www.oecd.org/env, "Environmental emission levels of 10 million tonnes for efficiency by trading permits. In addition, the Policies".
38 Obseiver No. 233 August 2002 ENERGY
NEA interview
Nuclear energy Can it help?
Nuclear energy is back in the public eye in light of the concerns about climate change and the need for a sustainable energy supply. Some powerful public voices are unconvinced about the technology's competitiveness and safety. For Luis Echâvarri, Director-General, OECD Nuclear Energy Agency, these doubts should be put to rest.
What role can nuclear energy play global warming issues by stabilising CO2 New nuclear units, on the other hand, do in helping countries tackle concentrations in the atmosphere, then even require higher initial investments than most global warming and in more stringent emission reduction targets than alternatives and are seldom the cheapest particular meet their commitments under those agreed at Kyoto will probably be option in present market conditions, the Kyoto Protocol? required. Again, nuclear could play a role. especially those that require quick returns on Long-term scenarios for energy demand and capital. In some countries, however, such as Luis Echâvarri: Quite a significant role. supply show that expanded use of nuclear Finland, France, Japan and the Republic of The target of the Kyoto Protocol for Annex I energy could reduce CO2 emissions Korea, new nuclear power plants are countries - meaning developed and significantly by the end of the 21st century But expected to be competitive. For example, Finnish economic studies indicate that the transition economies - to reduce greenhouse a nuclear energy phase-out could result in CO2 gas emissions by 5.2% on average from their emission rates thai are much higher than today. capital cost of a new unit would range from 1990 levels up to the period 2008-2012 is billion, depending on size. It would challenging and will be difficult lo meet. Critics of nuclear energy emphasise the generate electricity 20% cheaper than gas, Indeed, during the 1990s, global emissions high capital costs incurred for building the next cheapest option. Perhaps, in of CO2 - the gas thought most responsible and maintaining nuclear power plants. addition to climate change and security of for climate change - increased by almost 9%, How do these costs affect the economic supply, it is sums like this that helped in spite of a decrease by some 32% in the competitiveness of nuclear energy? persuade the Finnish parliament to give the economies in transition. If anything, today's nuclear industry the green light to go ahead nuclear power plants help keep CO2 First of all, existing nuclear power plants are and build a new reactor, which, if it happens, emissions down; if the 438 nuclear reactors competitive and perform well in deregulated will be the first new reactor commissioned in in operation worldwide (most of them in electricity markets, thanks to their low OECD Europe for several years. OECD countries) were to be closed down marginal production cosls. Once they have and replaced by the current mix of state-of- amortised their initial capital costs, such Clearly, there has been progress. State-of-the- the-art fossil-fuelled plants, world CO2 plants become quite an asset for utilities, as art nuclear energy systems of the new emissions would rise by some 6%. well as for governments in ihe struggle generation, reaching commercial deployment against global warming. stage now or tinder development for fulure Although nuclear energy has been effectively decades, are designed to reduce those excluded from two of the Kyoto Prolocol up-front construction costs and additional flexible mechanisms - the clean Everyone wants the use refurbishment and decommissioning costs. In development mechanism and projects of nuclear energy to be addition, these new systems are expected to implemented jointly - it remains at the very environmentally friendly, maintain or enhance technical and safety core of the Prolocol. We believe it will play economical and above all safe. performance compared with existing nuclear power plants. In fact, expected capital cost a significant role as a nearly carbon-free Fhe NEA does not prejudge the energy source in greenhouse gas policies of reductions range between 10% and more countries thai have chosen to look to policies of its member countries. than 40% for advanced designs. nuclear as part of iheir energy supply. Perhaps for that reason our work is highly appreciated by Another factor that will affecl the Don't forget, the Kyoto Protocol commitment all our members, whatever their competitiveness of nuclear energy versus olher sources is the prospecl of fossil fuel period ends in 2012. The time frame beyond policy on nuclear energy. that is critical from a sustainable development price escalation. And then there is "internalisation" of external costs associated perspective. If everyone agrees to address
39 Observer No. 233 August 2002 ENERGY
NEA interview
with atmospheric pollution, climate change management and disposal are based upon and security of supply Nuclear energy already realistic, and f would argue conservative, internalises its external costs associated with assumptions and generally include a rather waste and plant decommissioning. In other wide contingency margin of 10-15%. words, when we say it is competitive, we include those costs. Consumers are in effect Do environmental advantages of nuclear already covering waste management and energy, such as low emissions, outweigh decommissioning costs as part of their bill. the costs of, say, disposal of radioactive waste? So the cost of decommissioning plants that come to the end of their lives is already Again, here it is difficult to give a fair factored in? What do these costs involve, assessment, since the environmenlal who pays and how do they compare with, advantages of nuclear energy, like low say, decommissioning a gas-fired plant? atmospheric emissions, are not yet accounted for in market prices. Yet it is Laws and regulations in place in generally recognised that costs of global OECD countries ensure thai costs of warming could be very high. On the other decommissioning nuclear facilities, as well as hand, the costs of radioactive waste disposal costs of radioactive waste management and are accounted for and already paid for by disposal, are taken into account in the lotal consumers. Clear blue skies over a nuclear plant in cost of nuclear-generated electricity. These Finland. The Finnish parliament voted on costs are reflected in prices charged to 24 May 2002 to allow a new nuclear The cost of radioactive waste management electricity consumers and thus paid by the reactor lo be built to meet rising energy and disposal represents only a small percent users according to the "polluter pays demands despite bitter opposition by of the total cost of generating nuclear principle". In other words, we are already environmcntalists . electricity - in fact, less than 2% in most paying today for luture decommissioning, cases. To get a feel for the cost of rather than passing the cost on to anyone else. contaminated materials before their re-use. atmospheric emissions of CO2, consider the The costs may seem higher, but so are the impact of a carbon value charged on fossil- We already know that decommissioning costs expectalions that no burden is overlooked. fuelled electricity generation costs, just as a - and this includes not just expenses incurred rough approximation: to increase by some from dismantling a plant and disposing of the Critics argue that by boosting nuclear 1 % the total generation cost of a gas-fired waste, but also restoring the site for other energy, we will be handing costs and power plant, a $5/lC value of carbon would uses - represent some 15-20% of the initial burdens on to future generations. How can be sufficient; for a coal-fired power plant a construction cost of a nuclear power plant. we factor in the long-term cost of 2.5 US$/tC value of carbon has ihe same The plant operator is responsible for managing nuclear waste? Will those costs impact. In short, add a carbon charge to provisioning funds to meet these liabilities. fall or rise over time? these sources and nuclear energy looks even They generally calculate them by spreading more competitive. out the total decommissioning cost over the The recognition of financial liabilities through estimated life of the plant or some defined the regulatory framework in place in OECD One of the concerns the public has is the shorter period. Schemes in place for countries guarantees that luture costs are risk, however small, of a nuclear accident. guaranteeing that the money will be available accounted for and that provisions are made to How can we assess not so much the fears, when the time comes vary from country to deal with those liabilities in due course. The but the possible associated costs? country but, in all OECD countries, the long-term costs of management and disposal government authorities oversee these matters. of radioactive waste are treated similarly to The costs, as well as the probability of decommissioning costs and included in total nuclear accidents, are assessed by Comparing costs with gas-fired units is easier generation costs. So the view that costs are manufacturers, operators and regulators. said than done, since according to current simply being handed on is incorrect. International organisations such as ours practices in most OECD countries, and the International Atomic Energy decommissioning costs of classic thermal As with any technology, scientific research Agency (IAEA) based in Vienna have power plants, like gas-fired ones, are simply and technological progress are expected to carried out sludies reflecting international not included in electricity generation costs. bring significant cost reductions for consensus on this subject. The cost This is because operators expect that those radioactive waste treatment, handling and estimates are reflected in the insurance fees costs will be balanced by the benefits of disposal. Furthermore, advanced reactor and paid by operators thai, like provisions for recycling and re-use of materials. But for fuel-cycle systems should reduce fuel luture financial liabilities, are included in nuclear facilities, decommissioning costs consumption and radioactive waste. However, prices paid by electricity consumers. include extensive cleaning and in the light of uncertainties inherent to National laws and international decontamination treatments of irradiated or advanced technologies, provisions for waste conventions on third-party nuclear liability
40 Observer No. 233 August 2002 ENERGY
Renewables
establish the compensation to be covered by operators and governments in case of an accident. Renewables
Cost estimates can always be improved, of course. For instance, they should include Upwardly mobile health effects on the exposed populations; psychological effects; impacts on economic activity and employment; loss of capital; and long-term social and environmental impacts. Most of these costs are site-specific and vary greatly, but they remain a small percentage of total generation cost.
Much has been made in the media and elsewhere about the possible implications of 1 1 September for nuclear energy and in particular its costs. The common view among experts is that nuclear facilities in general and power plants in particular are not very attractive targets. They are well guarded and inherently robust. I don't think that damaging them to a significant extent is feasible.
Several of your member countries do not have nuclear power. In this context, what exactly in your view is the role of the NEA?
The NEA, like everyone, wants the use of nuclear energy to be environmentally friendly, economical and above all safe. We do this by seeking to strengthen its scientific, technological and legal bases. We try to enhance international co-operation for the peaceful and safe application of nuclear energy. The policy and technical work of the agency is carried out by the best specialists from all 28 NEA member countries. We
insist that their work be as factual and dispassionate as possible, in keeping with OECD tradition. Furthermore, the agency operates by consensus and does not prejudge the policies of its member countries. Perhaps for that reason our work California is famous for blue skies is highly appreciated by all our members, and leading-edge technology A 2001 report to the G8 says whatever their policy on nuclear energy. parks. Combine the two and, no that about US$100 billion of surprise, you will find that the state may investment over ten years in References be taking a lead in solar energy too. OECD countries would be NEA/OECD (2002), Nuclear Energy and the Then consider the fact that housing enough to make renewable Kyoto Protocol, OECD, Paris. developers are simply replacing traditional NEA/OECD (2000), Methodologies for Assessing roof materials with solar panels as part of technology competitive within the Economic Consequences of Nuclear Reactor new buildings and below the cost of a 20 years. That figure may be Accidents, OECD, Paris. NEA/OECD (2000), Nuclear Energy in a normal mortgage, and this all begins to exaggerated. Sustainable Development Perspective, OECD, sound like a movie script from. .. Paris. California.
41 Observer No. 233 August 2002 ENERGY
Renewables
But is il just an isolated act, or could it be energy. Today, it would be unfeasible to the start of a new market that will spread expect to run the French TGV high-speed worldwide, just as the automobile and train from windmill energy generated communications technology markels did somewhere on the Normandy coast. But before it? maybe in the future the technology will exist for TGVs lo power themselves, Dismissing renewable energy as somehow without the need for overhead lines. In marginal is fashionable practice in some other words, policymakers will have to be mainstream energy lobbies, but over the convinced thai ihe benefits of renewable past few years renewable energy systems technologies are real, show a return and have been spreading rapidly. Wind and outweigh other costs before embracing solar photovoltaics (PV) have been growing them. Several countries appear lo be taking at an average of 30% per year over the past research and development seriously, though five years (the fastest of any energy system, perhaps more could be done. which is dynamic, even if from a low base) even in some developing counlries. The 2001 G8 report, whose authors include Although most renewable energy used in experts from the International Energy developing countries is traditional biomass a Agency, a sister organisation of the OECD, for cooking, more and more small hydro, 3 highlights some barriers to renewables. wind, geothermal and advanced bioenergy if First, although the cost of renewable energy systems are being introduced. And while I is falling as volumes increase, in most cases solar PV roofs are being fitted m some % it is not yet directly competitive with developing countries, it is not yet a vibrant, conventional alternatives. Another barrier profitable business, as it all loo often has to capital-intensive investment. But that is all is insufficient human and institutional overcome the locals' lack of awareness and it is. For a natural gas turbine, there is the infrastructure, wilh limited capacity to understanding, not to mention red tape and fixed capital cost and the extra charge of support projects and markets due to a lack opposition from the utility companies. But extracting (and depleting) the natural of experience. There are high up-front costs this is pretty typical of ground-breaking resource. In bolh traditional and renewable too, and so, shortfalls in financing technologies that solve problems and serve technologies, the fixed costs fall over time, programmes. And finally, the report sees customers m new ways. thanks to efficiency gains and progress weak incentives and inconsistent policies generally. But as renewable technologies by as a barrier, stressing that the benefits of A 2001 report on renewables to the G8 says definition do not face the prospect of renewables are not always properly that about US$100 billion of investment depletion, their costs are fixed. This makes addressed in energy policy frameworks. over 10 years in OECD countries would be them a relatively risk-free investment over enough to make renewable technology time. And il becomes a form of insurance With these barriers, it is unrealistic lo competitive within 20 years. That is against, say, spikes in oil prices. Indeed, expect renewables to explode onto the equivalent to ihe value of a year's national the Californian sun roofs insulate those market today or tomorrow. Oil and gas now income in a country like Ireland and living beneath them from the rather dominate the energy mix, tomorrow il may probably less than the cost of new uncharacteristic, though nonetheless real, be hydrogen created from fossil fuels, along investment in nuclear technology. Moreover, outages m the local energy grid that have with some solar and wind and olher new the figure is a customer-led outlay, meaning occurred recently. forms. Nuclear too undoubtedly has a role, that there would be returns in both use as long as it can solve waste and security (lights, heating, etc), technological progress Perhaps the main area of discomfort for questions enough to win over public and, of course, the environment. policymakers in dealing with renewables confidence. Still, renewable energy may be is that it poses a major challenge to the way of the future. As one scientist al Renewable technology is improving all monopolistic and price-fixing markets, as OECD's Forum 2002 said, renewable the time, as is our knowledge of il. This well as to large users and suppliers of technology may be expensive now and may learning curve within the sector could even be inefficient in comparison with other mean that the US$100 billion figure is modes, but it is not a risk investment in the Policymakers will have to be exaggerated. Anyone in 1975 predicting long run. That surely is whal sustainable convinced that the benefits that the price of a computer in 2000 - let development is all about. R./.C. alone lhat of portables and PALMs - would of renewable technologies be within reach of millions, would are real, show a return and Reference understand the point. outweigh other costs before IEA/OECD (200 1 ), Developing a New Generation embracing them. of Sustainable Energy Technologies, IEA, Paris. Renewable technology like wind and G8 Renewable Energy Task Force, July 200 1 , lull solar-powered generators requires a report available al www.renewabletaskforce.org/
42 Observer No. 233 August 2002 SOCIEFY
Sustainable transport
Transport troubles
Peter Wiederkehr and Nadia Caïd, OECD Environment Directorate
Transport is a cornerstone of modern civilisation, but at what cost? Heavier than you might think.
Decoupling is more than just a sustainable development buzzword. It essentially means slowing, if not reversing, the growth in environmentally damaging activities in relation to economic expansion. Indeed, without decoupling, sustainable development would probably be unachievable.
Some areas of economic activity have decoupled: industrial output from energy consumption and CO2 emissions in the EU, for instance - its growth in activity has not led to a similar growth in pressure on the Slow burn environment. But transport is one area where decoupling has simply not Transport (EST) guidelines, adopted by the have also driven up mechanised transport, happened. Technologies have got cleaner, OECD's environment ministers in 2001, are most vehicles are for personal use. In the US, with modern engines polluting less, but one contribution (see box, page 46), though which accounts for nearly a third of all the any benefits from this have been even they have had implementation world's mechanised road vehicles, some 90% outweighed by the effects of the rising challenges. of them are for personal transport. In fact, stock of vehicles. In fact, mechanised there are more personal vehicles in the US than commercial vehicles in the rest of the transport has taken a brutal toll on the Part of the problem is separating out travel, world combined. Earth's environment since its emergence a mobility and communications from transport century or so ago. Air pollution, land-take, itself. What was mostly new to the 20th road and air fatalities: many of us may have century was not actual mobility, but The total world fleet of road vehicles become used to all this or fatalistically see mechanised transport by road and air. Steam currently grows at aboul twice the rate of it as the price of progress. Yet these heavy trains revolutionised land travel in the 19th population growth. And it is likely to grow fastest in future in countries like China, economic, social and environmental costs century, but their effect on mobility was as Brazil and India, whose combined total fleet are set to get worse. nothing compared with the advent of the automobile, truck and aeroplane. Over the is about a fifth thai of North America and a Travel may be great, but a bttsiness-as-usual 20th century, the motorised movement of third that of Western Europe. In fact, the approach to transport is not on. Political people and goods increased more than one worsening trend in transport problems will leaders know this and some serious efforts hundredfold, while the total human affect developing countries most of all m the have been made, whether to improve public population increased fourfold. Even locally, next few years. transport, restrict car use, or even slap on road travel rose, while walking and bicycling environmentally-related taxes. But such fell (see graph page 45). Only in poor Car-nundrum lire-lighting is clearly not enough. Better countries is travel still done mostly on foot engine technology will help, but hoping and bicycle, with an average of some 3,000 If car ownership worldwide were at the same that it will swoop in and save the day is like km per person per year. By comparison, t he- level as in OECD countries, there would be some three billion cars on the world's roads, waiting for Godot. Serious global steps are average American travels almost 30,000 km a rather than the current 540 million. The needed. The Environmentally Sustainable year, mostly by car. Although freight and trade
43 Observer No. 233 August 2002 SOCIEFY
Sustainable transport
higher figure is a distant prospect, but volatile organic compounds (VOCs) and the number of vehicles in circulation nitrogen oxides (NOx) are the most serious. will remain a determining factor for CO exacerbates cardiovascular disease and environmental policy and resource use. The causes neural damage, VOCs are average distance travelled per car in OECD carcinogenic and NOx cause respiratory, countries has stabilised in recent years, but ocular and cardiovascular problems. In this stability, even combined with better fuel OECD countries, emissions of all three are efficiency and emissions control, has been falling, thanks largely to catalytic converters more than offset by the sharp growth in fleet in motor vehicles, but worldwide their size and vehicle use. emissions are expected to increase, reflecTing rising car use and poorer Eco-friendly transport Fuel type is also important. In particular, technology in developing countries. consumption of diesel fuel is increasing at a exhaust gases appear to be especially higher rate than consumption of petrol, effective - two to lour times more than on When sunlight acts on NOx and VOCs the with a 4.6% annual rise from 1985 to 1995, the ground - in facilitating the formation of result is photochemical smog. Ground-level compared with just 1.8% for petrol. The ozone, a potent greenhouse gas. Aviation ozone is the mam constituent of this trouble is thai while diesel engines are more accounts for about 10% of motorised nasty cocktail and transport is the main fuel-efficient than petrol engines, with lower person-kilometres worldwide, and for less contributor. It harms almost all biological C02 emissions per kilometre, they produce than 1% of freight movement, but this tissue, damaging plants and penetrating more breathable particulates, like ultrafine altitude effect may be responsible for about deep into the respiratory tracts of animals. carbon, and chemicals like nitrogen oxide. a quarter ol transport's contribution to Smog also contains ultrafine particulate Furthermore, worldwide use of diesel fuel is climate change. Aviation is the fastest matter, some carcinogenic, of which diesel expected to increase, particularly as road growing mode for the movement of both engines are the mam source. Little wonder freight traffic rises. freight and people, so its global warming thai several government agencies in North effect may exceed that of trucks or cars America and Europe classify diesel exhaust Transport's environmental performance has by 2030. as a carcinogen. In North America, smog is been poor, yet, realistically, mobility will believed responsible for 10-20% of hospital continue: who would want otherwise? Transport also generates a range of air admissions lor respiratory complaints in the Whether by emphasising technology, pollutants (car exhaust contains some 500 summer months. innovation, taxation or regulation, achieving compounds) that can damage health and the decoupling of mechanised transport will the environment. Carbon monoxide (CO), People in cities are vulnerable to these be a hard, though necessary, challenge. pollutants, but perhaps none more so than drivers themselves. In fact, many studies Going places have found that pollution levels inside Altitude atmospherics Worldwide per-capita movement of vehicles are much higher than ambient people, 1850-1990 The atmospheric effects are foremost in levels, and even higher than the levels to public minds. One obvious concern is the which nearby cyclists and pedestrians are emission of greenhouse gases. Emissions of 1,800 exposed. Children may suffer more than C02 from the burning of fossil fuels many, in particular those being driven to increased by a factor of seven during the S 1.600 and from school. 20th century, resulting in an increase of about a third in atmospheric CO2 levels. Road kill Transport directly contributes about 20% of these CO2 emissions worldwide, and close II only the problems were just atmospheric. 10 30% in OECD countries. These rates Unfortunately, polluted air is not the only would be much higher in each case if source of transport-related health risks. emissions from vehicle manufacture, road Road injuries are a major public health construction and disposal were included. issue, too. According 10 one Harvard study, Then there is the methane released during road traffic injuries are the 10th leading petroleum extraction and nitrous oxide cause ol death worldwide - about a million (N20) in vehicle exhaust gases. a year, with about 85% of those m developing countries - and the ninth Air transport adds to the problem. All those leading cause of disability-adjusted life years artistically criss-crossed jet clouds high in 0 0 0 0 O lost. Though car safety has improved over 1^- en the blue sky have an "altitude effect". At CO CO CO CD O) 03 CD O) ihe years, 125,000 people die every year on Year about 10 kilometres up, where commercial the roads of OECD countries. That's one Source: Centre for Sustainable Transportation aircraft fly, the nitrogen oxides in the road crash death every four minutes.
44 Observer No. 233 August 2002 SOCIEFY
Sustainable transport
land dedicated to urban uses increased from
Driving force 210,000 to 260,000 square kilometres, Global motorised road-vehicle stock, 1998 70% faster than the growth rate of nearby
250 - populations in urban regions. A particular feature of sprawl is the predominance of the
200 - private motor car. More fuel is used for Personal vehicles transport as people drive around more. H Commercial vehicles o And thai usually means a high land-take in ofvehicles 1 terms of multi-laned highways, bypasses,
oo driveways and other roads. Millions 50 - Guzzlers
. l About 20% of worldwide energy use is for
Rest of OECD OECD OECD Brazil, Former transport, 30% in OECD countries. Almost N.America W.Europe Pacific China, India USSR World all transport is fuelled by oil, which accounts Source: FT Automotive for about 60% of total energy use. Transport is the main user of oil, accounting for some Noise from the likes of jetliners and trucks Roads affect ecosystems, interfere with 60% of the amount extracted. The rest goes is also a problem that is increasingly natural drainage and block species to heating of buildings and the production recognised as a health risk. Moderate migralion. Highways, ramps, car parks, but of items such as asphalt, plaslics, delergenls, automotive traffic at a distance of 30 metres also train tracks and aircraft runways: all fertilisers and medicines. rates about 50 decibels, heavier traffic about consume environmental capital. 70dB. The World Health Organization Not all of the oil consumed by transport is recommends less than 45dB for productive Transport infrastructure, mainly roads, used for vehicle fuel, as some provides the sleep. Continued exposure to noise levels consumes about 40% of land in urban areas energy for the production, maintenance and above 65dB presents a serious health hazard of the OECD (more in North America) and disposal of vehicles and infrastruclure. and increases the risk of cardiovascular less than 10% in rural areas. The road Oil also goes into the plastics lhat form an diseases and mortality; levels above 85dB network occupies 93% of the total area of increasing portion of vehicles, including, cause hearing loss. Again, children and land used for transport in the EU. Per ironically, to reduce weight and improve people that live near highways appear to passenger-kilometre travelled, railways vehicle efficiency. At odds with this, though, be particularly vulnerable. But there are require less than a third ol the land taken is the continuing tendency in some stress-related risks from noise too. by passenger cars, aviation even less. countries to buy larger, more powerful, cars, like Sports Utility Vehicles (SUVs), rather than smaller ones. Land mark Surprisingly, perhaps, the length of the total road network per capita has changed little A car commercial on French television since 1975; indeed, it has fallen in several That means using more materials in shows a man running around hugging and countries. However, surface area has risen construction. In fact, production of vehicles shaking hands with road workers as they and transport infrastructure accounts for lay out fresh tarmac. He thanks them, some 40% of consumption ol major Aviation is the fastest growing joyfully, for creating the road on which he materials, including cement, steel and mode for the movement of both plans to try out his new car. The message aluminium. Ores are another non-renewable is unusual, because while people are often people and freight, so its global input. Some common metals like iron and encouraged to love their cars, even warming effect may exceed that copper are recycled, but recycling becomes personalise them, not so for our roads. In of trucks or cars by 2030. increasingly difficult as more sophisticated fact, it has become politically fashionable alloys and blends are used. Better for many to oppose everything from road substitutes will no doubt be developed, widening to new road development. but their acceptance will take time. Yet, the very cities and towns we live in sharply, since the extent ol motorways, would not exist without roads. Roads lollways and other restricted roads has The same goes for the development of are responsible for some great engineering increased dramatically These wider roads alternative combustion fuels. There have achievements, from viaducts to tunnels. require displacement of some 130 times been many false dawns and interesting To some, they are possessed of aesthetic more matter (land, concrete, gravel, sand, experiments, but until a competitive qualities, evoking images of evasion tar, etc.) than other roads. alternative has emerged, hybrids offer a and dreams of the open road. But next best solution. Take diester, for they are far from innocent landscape Sprawl is a related problem. In the US instance; this is a mix of canola vegetable features. between 1982 and 1992, the amount of oil and diesel, which is being successfully
45 Observer No. 233 August 2002 SOCIEFY
Sustainable transport
used in public buses in several French towns. Bui even canola production can entail serious soil depletion. EST: blueprint for better transport
Can anything be done to tackle transport lower-powered vehicles would take over in Transport- economics problems and steer them to a more urban areas. Non-motorised transport, like manageable level? There has been no walking and cycling, would be encouraged Transport's huge loll on public health and the shortage of trying. Whether to curb for short trips. Load management for environment can be evaluated. One recent pollution, discourage cars, boost public freight would be more efficiently managed study for the International Union of Railways transport use, or simply reconquer civic to reduce frequency of trips, much of it puts the direct cost of this toll al 8% of GDP space for cyclists and pedestrians, would travel by rail and hydrogen would be initiatives abound. Yet, the car remains used as fuel. Innovative public transport for OECD Europe. This includes accidenls, triumphant. Ownership is climbing, and combining mass transil and individual noise, climate and pollution. It does not the pressure on local authorities to yield vehicles, including taxis and rented cars, include congestion costs and indirect costs more space to the needs of the car is would be developed. Long-distance air such as fuel supply, production of vehicles, unyielding. As for aviation, high-speed travel for business purposes would be etc. These could add another two percentage trains in Europe and Asia show that rail greatly reduced, with more use of points. Road transport and aviation are can compete with short-haul flights, but videoconferencing and olher information long-haul air trips continue to rise. technologies. primarily responsible; rail traffic contributes less than 1% of ihe social cost burden. A wider strategy is needed to tackle All of this may sound highly altruistic, but The economy suffers, yet the economic transport problems, one that leads to a EST makes economic sense too, certainly consequences of all this are probably significant, though feasible, shift in compared with the present situation (see underestimated; for one thing, disposal behaviour. That is precisely what the main article). According to this strategy, and decommissioning of vehicles and OECD's Environmentally Sustainable EST's initiatives would generate not only a Transport (EST) guidelines aim to provide. infrastructure are also usually overlooked. net benefit for the environment and quality These have been developed since the of life, but a decrease of some 45% in the mid-1990s and were adopted by OECD financial costs imposed on society by Can it go on? Probably nol. Most of the trends governments in 2001. That means the transport over the period to 2030. are expected to worsen, certainly worldwide. world's 30 most transport-intensive Aviation activity, for instance, will rise faster countries acknowledged that it was time The main problem is not EST itself, but for than the other modes, perhaps as much as lo make transport more sustainable. governments to adopt consistent and 600% more than in 1990. Trends like this put focused policies and a determination to see The aim of EST is to ensure a high level action through. Emission limits, fiscal the long-term environmental sustainability of of mobility for passenger and freight and incentives, tradeable permits (see article, transport systems in serious doubt. Sooner or allow transport to develop within the page 38), planning, infrastructure later, the market may react. But to reduce the limits set by nature: lhal is, protecting investments in new areas like broadband, costs, policymakers will have lo take a lead health by reducing pollution and noise, and education: the assault would be on all and make it sooner. That means pulling respecting natural resource limits, and not fronts. The market would follow at first, environmental and health criteria up-front. worsening climate change or stratospheric though eventually take the lead by ozone depletion. Under EST guidelines, innovating new producls of ils own, as it is The EST guidelines can help to do this. Doing COt emissions from transport would fall already doing with carbon-neutral electric nothing is no longer an option. by 50% globally (80% in the OECD area) scooters and smarter telecommunications. from 1990 to 2030. For this, the energy References used to fuel the transport system would EST is attainable, but applying it would be- OECD (2000), "Environmentally Sustainable have to be virtually carbon-free. There tough going. People often insist that they Transport: Futures. Strategies and Best would be similar declines in major air depend on their car to get around, lo shop, Practices", see www.oecd.org/env, under pollutants like nitrogen dioxide and to bring the kids to school. Whether public- "documentation, best practices". sulphur dioxide, reducing acidification transport works well or not, the same OECD (2002), Policy Instruments for Achieving and photochemical smog. Fewer argument is heard. Perhaps a new, cleaner, Environmentally Sustainable Transport, OECD, particulates would make air healthier to quieter technology will come along to give Paris, forthcoming. breathe and smaller, quieter engines the car some respite. However, even then, INFRAS/IWW (2000), "External Costs of would cut noise pollution. Land-take impacts of car driving, like fatalities, injury Transport (Accident, Environment and would also be driven back or green and land-take would have to be addressed. Congestion Costs) in Western Europe", report spaces restored, so helping to safeguard Technology will help, but it is not enough. to the International Union of Railways, Paris. biodiversity and preventing costly sprawl. What is clear is that transport systems OECD (2002), Strategies to Reduce Greenhouse based on mechanised, fossil-fuel transport Gas Emissions from Road Transport: Analytical EST combines a mix of measures - mobility are unsustainable. Our policymakers and Methods, OECD, Paris. management policies, incentives and leaders will sooner or later have to bite lip OECD (2002), Key Issues [or Transport beyond technology. So, while car ownership would and act - the EST guidelines will assist 2000, ECMT, Paris. decrease, mobility would rise by over 20% them in this endeavour. For more on OECD work on sustainable compared with 1990 levels. There would be transport, see www.oecd.org/envAransport integrated transport services combining See the EST guidelines al For more on noise: different modes; more cars would run on, www. oecd . org/env/transport , www.who.int/health_topics/noise/en/ and say, fuel cells rather than petrol. Smaller or "documentation, guidelines". www.infoplease.com/ce6/sci/A08358 1 0. html
46 Observer No. 233 August 2002 SOCIEFY
Buildings
Sustainable buildings
Fakahiko Hasegawa, OECD Territorial Development Service
Buildings consume Le Corbusier, the great (though controversial) renovated, rebuilt or conserved. Buildings European urban planner and architect, argued that consume. They use energy, whether for office as much energy buildings were machines, to perform a task and to equipment, televisions or electric lighting, and so as transport. It be disposed of when no longer up-to-date. He once burn fuel, from wood to mined fuel. This contributes to greenhouse gases, while refrigeration is high time we famously quipped: why should we leave our buildings to our heirs, since we do not bequeath them our bodies? adds to ozone production. integrated them firmly into any But we do inherit buildings, and what we build we The operation of buildings accounts for 25-40% of final energy consumption in the OECD area. This is sustainable pass on to our heirs. "Sustainable building" refers to the economic, social and environmental impact of comparable with transport. And this does not even development buildings and building activities. Over half of the count the energy consumed for manufacturing equation. world's population lives in urban areas. Houses, building materials, etc. Construction of buildings factories and offices in cities, towns and villages have and infrastructure could be responsible for up to half to be heated, lit, cleaned, managed, maintained, of all material used in some OECD countries. And then there is the waste lhat has to be managed and minimised. Safely is another building concern, as disasters like earthquakes in Japan, Turkey and elsewhere cruelly remind us. This means setting standards and responsibilities lhat apply throughout the buildings' lifetimes.
Air quality is another building concern and a health one too. Mosl people spend as much as 90% of their time indoors. From birth, through school, work, rest and play, indoor space and air quality is influenced by buildings and affect our health. This is another good reason why public policy should seek to influence building norms and objectives, not to mention reducing the environmental burden.
One problem is that the building sector is unique. Indeed, it is many things togelher: water supply, heavy materials, excavation. And houses have different demands than hospitals, schools or offices. Buildings are expected to satisfy a wide variety of demands, such as proteclion from weather; thermal and noise comfort; safety from fire and other hazards; supply of quality water, etc. But these demands sometimes contradict each other. For
instance, insulation work to improve heating efficiency in offices during the oil crisis in the 1970s also led to worsening air quality and a rise in related health problems from formaldehyde, a chemical found in pressed wood and insulation foam that causes irritation and dizziness.
Moreover, buildings are fixed capital: the French call them immobile capital, as distinct from mobile types, like money and equity They are a form of
471 Observer No. 233 August 2002 SOCIEFY
Buildings
sustainable development hinder or help the which building has which level of energy Many large-scale contractors industry? After all, traditionally government efficiency Given Japan's earthquake risks, are investing in environmental policies aimed to stimulate building as a robustness and durability are assessed too. The technologies, but not so the source of jobs and growth. new scheme has already been used for more than 70,000 housing units. smaller builders that make up Yet. in some ways, the building lobby appears most of the building trade. to be leading the way, in renewable energy Energy auditing is another measure. The Dutch Therein lies a question: how to installations, for instance (see article on Energy Performance Advice scheme is a good spread the technology and renewable energy, page 4 I ft But while many example of this, aiming lo reduce energy use in know-how that is available, large-scale contractors are investing in existing buildings by some 3 Ml of carbon by environmental technologies for a growing 2008-2012. Under the scheme, technical and actually apply it. market, not so the smaller builders that in fact experts check dwellings and make concrete make up most of the building trade. These are proposals on upgrading energy efficiency. very slow to adopt new technology and simply investment, vehicles of value and products of insisting through regulation would either put Denmark is perhaps the most advanced exchange, though fixed in physical space them out of business or drive them into the country m this area, with their obligatory during their entire lifetimes. They are a key underground economy. That would mean Energy Labelling. When someone wishes to part of the urban engine of capitalism. One substandard, even dangerous, buildings, sell a house in Denmark, they must have the problem is lhat while buildings can inject particularly in lower income countries or efficiency ol the house checked and provide a value into land, they can also fall apart from towns. Therein lies a major public question: report to buyers as a condition of sale. negligence, reducing their own value and that how to spread the lecbnology and know-how of those around them. Buildings require that is available and actually apply it. Water-saving initiatives exist too. In the US, maintenance, upgrading or demolition. several cities, including New York, introduced They can, in short, be a planning headache. Several governments have tried and these new 1.6 gallon per Hush toilets in the 1990s to conferences will hopefully help. As ever, there replace the old 3-5 gallon per flush models. Clearly, environmental policy instruments that is the question of expense. Apartment blocks Public authorities led the drive and some 25 have been successful in other sectors cannot have been built with energy-efficient design, million new units were installed in homes and always be applied to buildings. Take-back complete with solar panels and smart offices by the end of the decade. The result has programmes of the type used for beverage technology to control appliances. But their been a sharp drop in water consumption. containers would probably not work, for initial cost has often put them out of reach of instance. It would be unrealistic lo oblige all bin a well-off lew. This may change as A more common iniliative is the landfill tax, designers or contractors to take any technology costs fall (see article on renewable the aim this time to encourage better recycling responsibility for, say, demolition decades energy, page 41). Already in California, prices of building materials. Again, Denmark and the ahead. Can we really know how long a of solar-powered houses are falling fast. Netherlands are leaders in this area: their building will last? The Eiffel tower was buill a recycling rate of construction and demolition century ago as a temporary structure for a Some concrete examples waste has already reached 90%, thanks in part world fair but still stands robust. The Great to the landfill tax. These low-grade recycled Pyramids have lasted an eternity, but will Architects can show us the possibilities, but materials are not used in building construction, Pei's glass pyramids in the Louvre? policymakers can do a lot to promote the though, but in road foundations and for adoption ol available technologies in as many landscaping golf courses, etc. For building Policymakers are starting to pay attention. In building types as possible. construction, technological improvements 2000, the first international conference on would be needed to increase the high-grade sustainable building (called SB2000) was held Take environmental labelling for instance. This recycling such as the use of recycled aggregates in Maastricht. A second conference (SB2002) may seem like a curious idea for buildings, yet in concrete, and to improve the flow of these will be held in Oslo, Norway, this September. the UK's Building Research Establishment has goods throughout the sector. European housing ministers from east and put such schemes in place for new buildings west held a "sustainable housing" meeting in (mainly offices). It evaluates a wide range of Perhaps that is the next step: knocking down Brussels in July. environmental characteristics of buildings. The buildings, recycling them and resurrecting scheme is now in use m a quarter of all new them. What would Le Corbusier say about The OECD is in fact one of the few office buildings in the UK. Data is still that? international organisations that attempts to preliminary, though it suggests that the look at sustainable building from a policy average energy efficiency of buildings using it Reference point of view, for instance, at how energy is higher than other buildings. OECD (2002), Design oj Sustainable Building Policies, OECD, Pans. efficiency might be improved to reduce cost See www.oecd.org/env, under "documentation, and C02 emissions, or how to reduce material In 2001 Japan introduced a new voluntary other". pressure on gravels, sands and forests, etc. labelling scheme too, this time for housing. See www.uswaternews.com/archives/ Will this new interest lead anywhere? And will Now, potential buyers can easily understand arcconserv/8newslu5.html
48 Observer No. 233 August 2002 AGRICULTURE AND FOOD DEVELOPMENTFINANCEAN EDUCATION AND SKILLSSTAT
EMERGING ECONOMIESTERRi NOMx EMPLOYMENTGOVERNANCEENERGY ENVIRONMENT AND SUSTAINABLE DEVELOPMENTINSURANC )PENSK FINANCE AND INVESTMENT/INSURANCE AND PENSIONS GENERAL ECONOMICS AND FUTURE STUDIESSTATI! TIC GOVERNANCETERRITORIALECONOMY INDUSTRY SERVICES ANDTRADETRANSPOR" NATIONAL ACCOUNTS AND HISTORICAL STATISTICSSOCIALISSUES/MIGRATION NUCLEAR ENERGYTAXATIONSCIENCE AND INFORMATION TECHNOLOGY NTSOCIAL ISSUES/MIGRATION/HEALTH STATISTICS: SOURCES AND METHODSEME RGINGECONOMIESTAXATIONECONOMICS TERRITORIAL ECONOMYINSURANCEANDPE NSIONSTRANSITIONECONOMIESGOVERNA NCESTATISTICSTRANSPORTEMPLOYMENT SourceOECD
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Growth
Bye-bye, Miss American Pie
Douglas Worth, Secretary-General, Business and Industry Advisory Committee to ihe OECD
t\ £ T""\ ye-bye, Miss American Pic" may remember this: the pie can be grown. It is all very well to talk be how critics see the woes of the Everything lhat governments do should be B;US economy right now, but was aimed at increasing the size of the pie. about regulation and the longest boom in recent history really Let's call it economic growth. It's essential. responsibility, but we just pie in the sky? Pie can be confused with Without it, ihe number of funded public should not lose sight of motherliness and apples and ils homely priorities will go down and the number of connotations may be a clue to why hungry mouths will not. If someone comes to the importance of growth. politicians are so fond ol wanting to slice it you and says, "hey, we've gol to slow down Nor its ingredients. up and share it around. Indeed, ugly battles economic activity and sacrifice some growth are fought in legislatures all over the world for this priority or that priority", say no. regarding what public priorities should receive ihe largest pieces. Not that I think you have not got the message. After all, the work of the OECD, The pie can be an unhelpful metaphor IMF and the like already emphasises the because it is essentially limited to a building of frameworks and warns against fixed-size dish. Yet, my government protectionism and industrial policy friends, my anxious prime ministers, meddling. But, no sooner do we leave
50 Observer No. 233 August 2002 BUSINESS VIEW
Growth
ambitious pie-growing meetings in Lisbon and Kananaskis than we hear calls for The OECD, the IMF and the like stepping up regulatory grip and government already emphasise frameworks Be the first to know ... intervention in the name of progress. The and warn against protectionism pnze is a growing pie, so keep your eye on it. and meddling. But no sooner do
Growing the pie is largely a malter of using we leave ambitious meetings in market forces to expand product and service- Lisbon and Kananaskis than we OECD -ect offerings in such a fashion that existing hear calls for stepping up markets are not just enlarged but new regulatory grip and government markets are created. Personal computers, intervention in the name with our free e-mail alerting cell phones, Internet auctions arc all service expansions of existing markets, but the of progress. technologies and operational innovations that underpin them have enabled entrepreneurs to offer services and create products never previously contemplated. Governments should get back to the basic ingredients in the mix. Nurture the Ah yes, sounds familiar, you may say, a expansion ol your capital markets. Let Completely free, no obligation recipe for more dol.com bubbles and domestic and international funds mingle. to buy. unworkable business plans. But I would Shake up your educational establishment to caution you not to underestimate those who provide the required skills and better Receive priority announce¬ failed the first time around. Successful prepare students lor today's jobs. Shorten ments of new OECD titles invention is the result of persistent failure. the bureaucratic time between innovation on publication. Never have we seen so many inventing at and the marketplace and don't let fresh the same time. Those bright, well-educated ideas go stale. Make it easier to create, and Choose from a list of publica¬ entrepreneurs who look a fall in the terminate, a business. tion services and free news information technology downturn will pop up again. Many of them will invent alone or Make sure that your recipe is clear. This letters. join larger firms and exploit ihe potential ol means a single government vision and their new enabling technologies. programme. If your ministers each require a Register, change your details different sized oven, demand that the or unregister at any time. Now remember, in this endeavour you will temperature or ingredients be adjusted, find yourselves working closely with private otherwise you will just have a messy kitchen Remember - you remain
sector chefs. After all, that's the real without the growth. At the end of the day, it's in control. economy of shared responsibility. Indeed, thousands of private sector players that you the discipline of the kitchen is a common are asking to be the bakers, and they are all set of principles or guidelines, including customers, suppliers, shareholders, creditors OECD Guidelines on Multinational and consumers. Enterprises, between the public and private sectors that both will apply lo the whole Don't get in the way of competition; foster it. pie. Let's call it sustainable cookery. We Make it possible for your bakers to scan the must find ways to maximise broad world for ingredients. This lowers costs and distribution of the pie with as many biles as heightens quality, with strong multiplier effects possible for as many people as possible. that will give consistency lo the whole pie. And we must achieve all of this without wearing down the kitchen. This is not Lastly, please, as master chef, do not restrict accomplished by miracles but master chefs. the ingredients to the famitiar and comfortable and overlook new possibilities Even master chefs have to work together, in or experiments. Change is yeast, and you trust, keeping a close eye on ihe ingredients will have to exercise your leadership skills FREE REGISTRATION so lhat nothing unhealthy or unsavoury is to ihe maximum to push the timid forward added by either side. The market will and the obstructive back. www.oecd.org/OECDdirect eventually punish any misdeed, of course. It always does. The environment will punish If you do all this, we can all look forward to excess loo. But we should never let il go the chime of millions of oven timers as the F5a lhat far. global pie rises.
51 Observer No. 233 August 2002 oecd.org
Tax environment NEPAD:Anew partnership for
Whether it be a tax on plastic bags or an flying is cheaper. Winning consumers over is Africa's development increased levy on petrol lor cars, consumer a challenge: Susan Scott, ol the Economic spending that damages the environment can and Social Research Institute of Dublin, Ministers from Algeria, Egypt, Nigeria, be discouraged by taxing the goods and noted that when Ireland introduced the Senegal, and South Africa were guests of services on offer to raise the price. Such taxes plastic bag tax, brochures were distributed in honour at the OECD ministerial council in have proved effective in OECD countries, but supermarkets pointing out that consumers Paris on 16 May, 2002 when they met lo there are fears that higher costs to producers could easily avoid paying the tax by using discuss financing development in general will reduce internalional competitiveness and other re-usable bags. and ways forward lor OECD - NEPAD have a possible regressive impact on domestic co-operation in particular. All agreed that income distribution because poorer Mr Trittin argued that far from harming NEPAD was a promising initiative that had households will pay a higher proportion of competiliveness, environmental fiscal refonn to be advanced. Several areas were their income than rich ones. leads to international competitive advantages considered, including: and distributes costs more fairly between large These tricky questions were on the agenda and small consumers of natural resources. Enhancing African participation in when tax and environment experts, non¬ According to the minister, Germany produces existing OECD Global Forums and other government organisations and the public a third ol the world's wand-generated outreach activities in areas such as gathered in Berlin on 27 June for a electricity and is Europe's leader in solar investment, trade, good governance, ihe conference on environmental fiscal reform power, partly due to massive incentives to reinforcement of statistical capacities and organised by the OECD and the German switch to ecological energy sources. The aim sustainable development; government. is not lo produce endless subsidies, though, Exchanging views and experience on peer but lo reach mass production and so lower review mechanisms and the requirements "In a market economy, prices and taxes are prices, Mr Trittin said. necessary for African countries to apply the quintessential steering signal," Germany's them effectively; federal environment minister, Jurgen Trittin, A discussion paper prepared lor the Consulting in a spirit ol mutual trust said in his opening address. "We will only meeting, based on the OECD's report and partnership on best development achieve a self-perpetuating dynamic process Environmentally Related Taxes in OECD practices, aid effectiveness and on moving in the right direction if the taxes and countries: Issues and Strategies, suggested development benefits of trade, subsidies system and if prices reflect solutions, such as meeting competitiveness investment, good governance and ecological realities and ecological common concerns by ensuring that environmentally- approaches to sustainable development. sense." related taxes were partly or entirely channelled back to the affected firms. The OECD is working closely with other The German government's efforts to international bodies also involved with encourage people lo switch to train travel for For more details and papers from the NEPAD to avoid duplication of effort and longer journeys, lor instance, will not work if conference: www.oecd.ore/environment improve results.
between different modes of transport and on Recent Trends in Road Accidents and Policy For safer transport between different countries. Ministers asked Issues, which recommended setting up the ECMT to find ways to combine- targets for road safety improvement, International measures to combat terrorism increased efficiency and security in the including a reduction of 50% in the number in transport since 11 September 2001 have transport system with measures to combat of deaths in road crashes for all ECMT tended to locus on planes and ships, but terrorism. They suggested examining countries over the next 10 years. governments also need to pay attention to the effective ways of tracking goods along the terrorism risks on roads and railways, whole transport chain to avoid inconsistent Ministers also noted a report which European transport ministers said. A security requirements. Ministers also agreed proposes a package of measures to promote declaration adopted by ihe European Council to share experiences and best practice in a sustainable balance between inland of Ministers of Transport (ECMT) at their transport security and counter-terrorism. transport modes, adopted a resolution on annual meeting in Bucharest in May also said developing European railways and discussed arrangements for transport security should Road salety was also on ihe agenda, and il a report on developing inland waterways. avoid inconsistent security requirements was pointed out that over 50,000 lives between different types of transport. could be saved on European roads if all Malta became the 42nd member of the countries were able to match the ECMT at the Bucharest meeting.
A report lo ministers on transport security performance ol ihe countries with the best For more on ihe meeting and the ECMT: stressed the need for better co-ordination road safety records. Ministers noted a report www.oecd.org/cem/
52 Observer No. 233 August 2002 oecd.org
included some- 20 ministers from OECD Fundamental sense countries and beyond, heads and senior Public against figures from international agencies such as OECD Forum 2002 - Taking Care or the terrorist financing UNICEF and the WTO, several Nobel Fundamentals: Security, Equity, Education laureates, some 20 business and labour Can the public help in the fight against and Growth. Paris, 13-15 May 2002 leaders and representatives of two dozen terrorist financing? This is the hope of the The divide between civil society organisations, from Amnesty FATF as it reviews its Forty Observer rich and poor Internaltonal lo the Worldwide Fund for Recommendations, the global anti-money FIM In China remains the major Nature (WWF). laundering standard, to bring them up lo potential source of date as an effective tool in combating money structural instability Opening the Forum, the OECD's secretary- laundering and terrorist financing and is and insecurity lhat general, Donald Johnston, emphasised this inviting public comment on the proposed could upset the unique opportunity for civil society lo changes. These are focused on three key Finding %^^ balance of our influence the deliberations of those charged areas: customer identification, suspicious the balance '"" -C globalised world. with the creation and application of public transaction reporting and proper supervision; This was a key policy. His words were echoed in the final information on the true beneficial owners of message that Annemie Neyts-Uyttebrocck, minislerial communiqué later that week. corporate entities; and the use by criminals Belgian secretary of stale for foreign affairs, Mr Johnston stressed that "nobody has a of non-financial businesses and professions carried from the OECD Forum 2002 lo the monopoly on the ideas needed to face such as lawyers in laundering funds. annual OECD ministerial council in Pans in today's challenges" and if governments May. In addition lo these security issues, the needed input from civil society, civil society The FATF has long been been concerned Forum offered an arena lor government, also needs support from governments to about the lack of information about the civil society, academia and business to achieve its objectives. persons that are the true owners and debate together the questions of equity, controllers of assets derived from criminal education and growth over two days of During 30 sessions over almost ihree days, activity. More recently, various types ol discussion that fed into the OECD some 1 50 speakers addressed issues ranging corporate entities (companies, trusts, ministerial meeting. from trade lo nuclear energy, education to foundations etc) were lound to have been corporate ethics, development to security used in financing terrorist activity The FATF US First Lady Laura Bush, m a keynote- issues such as money laundering and is proposing changes to address these gaps. address, argued that education is transport. The Forum also launched its first Other businesses that are liable to misuse for fundamental to all four of the Forums student essay competition, the eight money laundering and terrorist linancing, themes, and the cornerstone of winners of which where flown to Paris to like casinos, dealers in real estate, lawyers development and economic growth. More speak al one of the Forum's opening and investment advisors, are to be given than 1 ,200 people attended this year's sessions. I extra attention by the OECD-based bod):
Forum, die third such public debate The OECD Observer prepared summaries of The consultation paper is available at organised by the OECD. More than 70 each session ol the Forum, available on the www.fatf-gali.org/40RecsReview_en.htm/ and countries were represented, and speakers Forum's website: www.oecd.org/Forum2002 comments are invited by 31 August, 2002.
government. The emphasis was on Blueprint for open government involvement and a key Slovak Republic attraction of the roundtable was a "tools joins NEA government fair" where methods of achieving open Open government is line in theory, but does government were put on display and The Slovak Republic joined the OECD not always happen in practice. One reason explained. Nuclear Energy Agency (NEA) in June, is the persistent difficulty of involving civil taking the number of members to 28. society in developing open government The event was co-orgamsed by the OECD, Nuclear power provides some 53% of the systems that really work. This was just one ihe Slovenian government, the World Bank Slovak Republic's electricity and the of the messages of a two-day international Institute and the Open Society Institute. Republic, which joined ihe OECD m 2000, roundtable on building open government in Proceedings from the roundtable will be has established modern nuclear laws and southeast Europe, held in Ljubljana, published later in the year, and several regulations as well as an independent Slovenia, in May. NGOs who took part will disseminate the nuclear safety and regulator)' authority mam conclusions online in their local
More than 80 participants from 16 OECD languages. The Slovak Republic is the third Central countries and 12 central and southeastern European country to join the NEA alter For more information on the Roundtable the Czech Republic and Hungary. European countries discussed how to contact [email protected] develop the framework ol laws, institutions, For more on the OECD's work on public For more on the NEA: www.nea.fr methods and partnerships to build open governance: vvwvv.oecd.org/govcrnance
53 Observer No. 233 August 2002 oecd.org
OECD Ministerial Council 2002 Partnership for growth and development
Highlights of the communiqué issued by principle of openness of the Convention normal competitive conditions in the world OECD ministers on 17 May 2002 after their lo non-signatories. Ministers agreed to shipbuilding industry. two-day annual council in Paris. promole the OECD Guidelines for For the complete text, consult: www.oecd.org/ Multinational Enterprises. From Monterrey to Johannesburg and beyond - the OECD's role: Economic outlook and recovery: Harmful tax practices: Ministers Poverty reduction and sustainable Despite a promising outlook, risks and welcomed commitments by 31 jurisdictions development are an urgent priority uncertainties remain. Ministers will take to transparency and effective exchange Ministers will build on the Monterrey advantage of the recovery lo strengthen fiscal of information for tax purposes, and Consensus on financing for development positions and continue structural reforms, encouraged those on the list of to support a comprehensive approach to creating an environment where economic Uncooperative Tax Havens to make similar the internationally agreed goals of the efficiency, higher employment, and improved commitments. Ministers encouraged Millennium Declaration. They welcomed living standards are more likely. international institutions to work together the New Partnership for Africa's to help jurisdictions implemenl their Development (NEPAD) and looked forward Employment: Ministers asked the OECD commitments. Ministers looked forward to to further dialogue to determine how best for more monitoring of members' further improvements in exchange of lo co-operate to advance it. They implementation of the OECD Growth information between tax authorities. encouraged the vital contribution of the Stud)' and to assess the Jobs Strategy. The private sector to development, and will OECD should continue lo analyse the Doha Development Agenda: Ministers will address the need for technical assistance economic and social impact of migration. make significant progress on all elements of and capacity building to improve the Ministers suggested a meeting of labour the Doha Development Agenda to create the investment climate in developing and ministers in 2003. conditions for a successful WTO ministerial transition economies. Ministers issued a
meeting in Mexico in September 2003. separate statement on "OECD Action for a The fight against terrorism: Ministers will Ministers will work together on progressive Shared Development Agenda" outlining the implement necessary security policies liberalisation of market access, on OECD's role. This includes encouraging without undermining open, competitive strenglhening WTO rules and disciplines policy coherence for development; markets and while safeguarding human and on facilitating the negotiating process on supporting developing countries' rights and democratic values. The OECD investment, competition, trade facilitation governance capacity; improving aid will continue to monitor the economic and transparency in government effectiveness and ensuring adequate aid effects of terrorism and the economic policy procurement. Ministers want lo contribute volume; and strengthening partnerships response. Ministers asked for OECD policy to the new ILO World Commission on the and accountability. analysis and recommendations on terrorism Social Dimension of Globalisation. Ministers risks for insurance and the respective roles asked the OECD to work with the WTO to Sustainable development summit: of the insurance industry, financial markets build its country file database as soon The OECD Report to the World Summit on and governments. Ministers encouraged the as possible. Sustainable Development (WSSD) OECD to promote implementation of the illustrates OECD countries' responsibility revised OECD Guidelines for the Security Steel: Structural adjustment policies in this and capacity to contribute to sustainable of Information Systems. sector must be pursued vigorously. Work development and poverty reduction by on steel under the auspices of the OECD enhancing economic growth, promoting Governance: The assessment of the OECD has focussed on issues related lo human and social development and Principles of Corporate Governance will be eliminating inefficient excess capacity protecting the environment. Ministers will brought forward from 2005 to 2004. worldwide, and strengthening disciplines strengthen co-operation with non-OECD Ministers encouraged the OECD and the on market-distorting measures and countries to promote good governance and Financial Action Task Force (FATF) to industry practices. Ministers expected effective policies. They recognised the strengthen their co-operation. They urged further progress by the end of 2002. important role of the private seclor and of all countries to implement quickly the civil society. They asked the OECD to FATF Special Recommendations on Shipbuilding: Ministers support recent monitor progress across all three Terrorist Financing. They will urge parties efforts in the OECD towards broad-based dimensions of sustainable development: to ihe OECD Anti-Bribery Convention to international negotiations on a new economic growth, human and social enforce it rigorously. They reiterated I he- shipbuilding agreement to bring about development and the environment. I
54 Obsener No. 233 August 2002 occd.org
Calendar
Calendar of forthcoming events
Please note that many of the meetings mentioned are not open to the public or media and are listed as a guide only. All meetings are in Paris unless otherwise stated. For further information, consult the OECD website at www.oecd.org, under "key upcoming events", which is updated weekly.
30-1/10 Global Trading, workshop organised by the CATEP AUGUST - SOME HIGHLIGHTS (Concerted Action on Tradeable Permits). Kiel Institute for World Economics, Kiel, Germany. 26-27 Public-Private Sector Dialogue for Strengthening Trade Capacity Building, regional workshop organised by the OECD Development Centre, the Development Assistance OCTOBER Committee (DAC) and the United Nations Economic 3 Innovation, Change and Partnerships, second Quality Commission for Africa. Mombasa, Kenya. Conference for Public Administrations in the European 26/8-4/9 Sustainable Development, World Summit in Union, organised by the Danish Ministry of Finance. Johannesburg, South Africa. Copenhagen, Denmark. 6-9 Biotechnology for Infectious Disease: Addressing the SEPTEMBER Global Needs, workshop organised by ST1 and the Environment Directorate, and sponsored by the 11-12 Donor Good Practices, workshop to examine best Government of Portugal. Lisbon, Portugal. practices in aid, organised by DAC and Birmingham University. 9-11 FATF, first plenary meeting of FATF-XIV 10-11 Science Policies for Economies in Transition, a Global 16 Implementing the DAC Guidelines on Poverty Reduction, joint meeting with experts from the Research Village conference organised by STL Development Co-operation Directorate (DCD) and the 14-16 Clean Russia 2002: International Exhibition and Trade Union Advisory Committee (TUAC), organised by Conference on Waste Management - problems and the Labour/Management Programme. solutions of the 21st Century. Moscow, Russia.
16-17 Policy Frameworks for the Knowledge-Based Economy: 16 World Food Day. Rome, Italy. ICTs, Innovation and Human Resources, global forum 16-18 Knowledge in a World of Risk: A Compass Towards organised by the Directorate for Science, Technology and New Prosperity, World Knowledge Forum. Seoul, Korea. Industry (ST1) Working Party on the Information Economy. 22 DAC aid peer review of the United States Brasilia, Brazil. 27-30 Small Business, Big Markets, One World - 29th 16-18 Incentives and Accountability: Instruments of Change International Small Business Congress, hosted by the in Higher Education, conference organised by the Royal Dutch Association of Small and Medium Sized Programme on Institutional Management in Higher Enterprises, MKB-Nederland. Amsterdam, Education of the Directorate for Education, Employment, the Netherlands. Labour and Social Affairs (ELS).
18 Access to Health Care in an Ageing Society, joint NOVEMBER meeting with experts from ELS and the Business and Industry Advisory Commitlee to the OECD (BIAC), 3-5 Fourth Asia Development Forum, with a focus on organised by the Labour/Management Programme. placing trade on the development agenda, organised by ihe
19-20 Tax Treaties and Transfer Pricing, global forum Asian Development Bank. Seoul, Republic of Korea. organised by the Directorate for Financial, Fiscal, and 4 Quality Assurance and Proficiency Schemes for Enterprise Affairs (DAF). Molecular Genetic Testing, experts meeting organised by
25 Parliamentary Assembly of the Council of Europe. STL Strasbourg, France. 7-8 Environmentally Harmful Subsidies, workshop
25-27 The Measurement of Social Capital, conference organised by the Environment Directorate and the organised by the Centre for Educational Research and Directorate for Food, Agriculture and Fisheries. Innovation (CERI) and the British Office for National 12 Improving the Prospects for Older People in the Labour Statistics. London, UK. Market, joint meeting with experts from ELS, TUAC, and
28-29 IMF/World Bank annual meeting. Washington, DC, US. BIAC, organised by the Labour/Management Programme.
55 Observer No. 233 August 2002 oecd.org Laura Bush
Education also invites greater equity, because it gives our children the Education: the ools the-)- need to succeed in todays global economy. And education uels growth, because it unleashes individual creativity and provides door of hope the skilled workforce essential to growth and development." (...)
"There is no beller example of governments, businesses and individuals Laura Bush, First Lady olthe United States, was working together than the effort now underway in Afghanistan, the keynote speaker at OECD Forum 2002 on a country lhat is now rebuilding - and realising unprecedented 1 4 May. The theme of Forum 2002 was taking opportunity - thanks to efforts led by the United Nations, the care of the fundamentals: security, equity, education and growth. AU four are important, nited States, the new Afghan government, and our coalition partners around the world. Mrs Bush told a packed audience that included many high-level guests, but all lour hinge on one: education. The following two short extracts are from the First Lady's Prosperity cannot follow peace without educated women and children. speech, lire full version of which can be found at www.oecd.org/forum2002 When citizens are educated, and especially when women are educated, people's lives improve in significant other ways as well. For example, Q (, I irst and foremost, we must teach all the world's children to improvements in women's education have contributed the most by far respect human life - their own life, and the life of others. to the total decline in child malnutrition; and mothers with a F Every parent, every teacher, every leader has a secondary education have children with mortality rates nearly 36% responsibility to condemn the terrible tragedy of children blowing lower than mothers with only a primary school education. themselves up to kill others. In March, the boys and girls of Afghanistan went to school, many of Education can help children see beyond a world of hate and the young girls for the first lime in their lives. The world watched as hopelessness. With education comes greater self-respect, and respect teachers took their long-vacant places and students opened their books for others. With education comes greater understanding and tolerance. for their first lessons."
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56 Observer No. 233 August 2002 BOOKS
Reviews
Dealing with Better bus systems wretched excess improve cities
Towards Bus Systems for the Future: Tow, Sustainable arcfs Achieving Sustainable Ho, SUst Household r» "sehc a'nable Transport Worldwide rC°ns«»>PBo Consumption? ,rf5«os Trends and Policies Cou«r/b By 2020 transport will account
in OECD Countries for more than half the world's oil demand, and will generate nearly The impact of a quarter of the world's energy- households on air related CO2 emissions.
and water According to projections in this book from the International pollution, waste generation and Energy Agency, a sister climate change organisation of the OECD, the has worsened rate of increase in transportation London and Sydney. There are
over the last oil use is expected to be three costs of course, like policing, but
three decades and, without times higher in developing the reward is higher mobility. Add on sendees that inform radical change, are expected countries than in the OECD, to intensify even more in the reach. They could use taxes, though the latter will still waiting passengers when buses next 20 years, according to yet many environmentally account for the lion's share of will arrive, "smart card" ticketing emissions. Cities worldwide face this OECD report. related taxes are already paid systems 10 allow easier transfers by households on the enormous transport problems as between routes and metro Consider these figures: purchase or use of motor populations grow and vehicle systems, and buses can become more attractive. energy use in OECD vehicles and fuels. ownership rises too, generating countries grew by 36% gridlock, sprawl, heavy oil from 1973-1998 and is Could governments influence- consumption and persistent air But technicalities like this are expected to grow another consumer tastes and pollution. The authors argue that only part of the problem. Cities 35% by 2020 despite preferences or lean on better systems, like Bus Rapid that spread out, like Los Angeles efficiency gains; municipal economic instruments or Transit, incorporating new or Sao Paolo, present a different waste is projected lo grow by advertising to push sysiem design and modern challenge to high density urban centres like New York or Pans. 43% in the same period, consumers to more technologies, can help save some from 540 lo 700 million sustainable practices? of the oil, as well as help urban Yet, real opportunities lie in tonnes per year; and transportation to work better. developing countries. Latin American cities, such as Curitiba technological innovations, This report urges belter which have reduced the regulatory standards and Compared to cities dominated and Bogota, that have developed energy and material intensity inlegrating policies in by small private vehicles, those BRT systems, report much lower of many consumer goods, such areas as land-use, with well-designed bus systems traffic congestion, and bus have been offset by the infrastructure investment have much less traffic operators that even make a profit. booming increase in the and macroeconomic congestion, lower pollutant and excess of goods and services policies. CO2 emissions, and offer better Making progress will be hard, that are consumed and mobility for residents. How 10 though. Many will argue that discarded. Slowing down the spiralling gel people to use buses is a owning a car is an insurance interaction ol consumption challenge. Discouraging car use against the risk of strikes. Il is
How can governments and production will depend with penalising taxes or higher also a form of personal space. On ihe other hand can societies reverse these trends, and not only on consumers, but parking fees might work, bill to help households develop less also on co-operation from coax drivers out of their cars, give no choice but to own a car polluting, less material- government and business, public transport has to be worth (see article on Transport, page intensive lifestyles? Surely to reduce the "wretched it. Dedicated bus lanes have 43)? What this report shows is without change, sustainable excess" from our consumer already been successfully that not investing in public transit is unsustainable. development will be out ol culture. introduced in cities such as
571 Observer No. 233 August 2002 BOOKS
Reviews
Indian power Smarter minds
Electricity in India: Understanding the Brain: Providing Power for the Towards a New Learning Science Millions
It shouldn't take a brain surgeon India's electricity supply to figure out why some people industry is mainly owned can! read. But teachers and and operated by the policymakers now concede public sector, and is that it might help to consult currently running a one. Three years ago, OECD's growing risk of Centre for Educational Research
bankruptcy While and Innovations (CERI) India is the third- launched a project on "Learning neurons increase. This could largest producer of Science and Brain Research" that cause some decrease in the hard coal after China brings the hardware of brain number of synapses, but while and the US, it imports around science to bear on the software this may effect the speed of 1.4 million barrels of oil per of learning. Neuroscientists, thought, it doesn't reduce day, 60% of its total needs. finding it impossible to get policymakers and educators are intelligence. According to the US Energy paid for power produced. now all looking hard at Information Administration, questions like the use of mental In one Japanese study on adults India has a shortfall of roughly Looking ahead, India's crude imagery in learning and the role 25 to 83 years old, no age- 13,000 megawatts of electricity. oil imports are projected to of age-related deterioration of related differences were found in reach 5 million barrels per day brain cells. fluency, originality of thought, Most of the problems of the in 2020, which is more than productivity and apptication of Indian power sector arise from 60% of current Saudi Arabian They have also shattered some creative ability. Besides, emerging the present retail pricing oil production. Energy and myths in doing so. For instance, data show that physical fitness system and from the fact that electricity will be required for it is generally asserted by non- and learning can contribute to loo little of it is actually paid a population that exceeded specialists that the left improvements in the for by the user. Out of total one billion in 2000 and to fuel hemisphere of the brain is used management or control of electricity generated, only 55% an economy that grew at an for logic and coding for verbal mental processes. Learning is billed and 41% is regularly average annual rate of 7% information, while the right actually modifies the brain paid for. Electricity is either from 1993-1997. hemisphere is the creative one physically by increasing the stolen, not billed, or electricity and codes for visual information. growth of new connections bills are not paid. This amounts The difference in this report In fact, while certain tasks such among neurons. This brain lo a mass of implicit subsidy. from others by the IEA is that as face recognition and speech plasticity is an exciting find for active government production belong primarily to cognitive scientists. Under-pricing is also a intervention is recommended one hemisphere, most thinking problem, as current retail to help prepare the way for an requires both hemispheres to Educational policy could learn prices of electricity represent India-wide free power market. work in parallel. from this and improve too. If a less than 75% of real average For the moment, no such reading anomaly has been costs. This has created a market exists in India. Only Common knowledge asserts that detected in the brain, it may be serious impediment to the central government can our brain loses 100,000 neurons treated in the classroom. In fact, investments in the sector at a create the conditions for it to every day. That belief has also many scientists predict lhat the time when India desperately emerge, by inducing the states been re-examined, with one study and treatment of dyslexia needs them. Just before its to reform their bankrupt study showing that the number will be one of the major success collapse, Enron was the largest utilities, encouraging trade of total neurons in each area of slories of cognitive neuroscience American private investor in among states, and promoting the cerebral cortex is not in the near future. Who knows, India. But it gave up on its an environment that will dependent on age. Instead, with maybe a visit to the neurologist 65% interest in Dabhol Power attract investment from home ageing the number of large will one day be as common as a Company in Maharashtra after and abroad. neurons shrink and smaller dental check-up.
58 Observer No. 233 August 2002 New publications June -August 2002
AH publications available in paper and electronic book format. This is a selected list. For more tilles, please consult www.oecd.org/bookshop
ISBN: 9264198210 and fiscal policy. It describes Benefits and Wages: AGRICULTURE AND FOOD 225pp, 36 tables, 21 graphics structural reforms that could OECD indicators $39 £27 Y5.200 MXN360 raise potential growth and ISBN: 9264197842 OECD Agricultural Outlook reduce unemployment, and 64pp, 26 tables 2002/2007 FDI from Developing Countries: encourages the privatisation and $19 £12 ¥2,300 ISBN: 9264187219 A Vector for Trade and restructuration of state-owned
212pp, 55 tables, 59 graphics Development enterprises. ENERGY $36 £.25 ¥4,000 MXt-mO ISBN: 9264198091 See article. 144pp, 37 tables, 14 graphics EDUCATION $35 £24 ¥4,600 MXN315 Coal in the Energy Supply Agricultural Policies in OECD of India Countries: Monitoring and Understanding the Brain: ISBN: 9264197990 Evaluation Li ECONOMICS "towards a New Learning 140pp Science -1 ISBN: 9264197648 $80 £54 ¥10,200 MXN700 OECD Economic Studies No. 34 U ISBN: 9264197346 210pp, 64 tables, 16 graphics Indian coal reserves are the third OECD Code 132002341 Pi $59 £39 ¥7,300 MXN395 95pp largest in the world, after the United $20 £14 ¥2,650 MXN180 Data on the level and composition of 160pp, 28 tables, 29 graphics States and China, and India is ihe See review. support and protection to agriculture, Sold as subscription only. eighth largest importer of coal. This and evaluation of the extent to which Chapters on income distribution report describes the Indian coal Manual for the PISA 2000 countries are reforming their and poverty in the OECD area; sector, and comments on government Database agricultural policies. Special investment in human capital through policies and the performance ol ISBN: 9264198229 section on agricultural trade and education; tax systems in EU India's largely state-owned coal 168pp the implementation of the countries', the contribution ol companies. information and communication S19.00 £12.00 ¥2,300 MXN 120 Uruguay Round Agreement on Agriculture. technologies to economic growth in Uranium 2001: Resources, nine OECD countries; and an Production and Demand EMPLOYMENT AND estimation of the cyclical behaviour Global Trends in the Dairy SOCIAL ISSUES ISBN: 9264198237 Industry: Outlook for the Baltics of mark-ups. 352pp, 293 tables, 19 graphics ISBN: 9264197664 OECD Employment Outlook: $74 £52 ¥9,850 MXN675 OECD Economic Outlook No. 71 June 2002 ISBN: 9264191615 $27 £18 ¥3,450 MXN185 ISBN: 9264197788 Energy Prices and Taxes $95 £58 ¥.10,850 MXN720 240pp, 75 tables, 30 graphics ISSN: 0256-2332 $58 £40 ¥6,550 MXN555 Sold as subscription only. DEVELOPMENT AND AID OECD ECONOMIC SURVEYS Unemployment and long-term $355 £222 Y42.550 MXN3.300 Each survey: joblessness remain unacceplably high. The DAC Guidelines: Integrating US$34 £21 ¥4,000 MXN311 the Rio Conventions into Most countries face major medium- Advanced Nuclear Reactor Safety Issues and Research Needs LI Development Co-operation LJ Hungary to long-term challenges in adapting ISBN: 9264197818 ISBN: 926419813X ISBN: 9264191526 to population ageing and skill-biased technological change. The Outlook 334pp 90pp 180pp, 35 tables, 67 graphics reviews a number of relevant issues. $65 £46 ¥8,700 MXN595 $19 £12 ¥2.000 MXN170 Special feature: Public expenditure. These include: the effectiveness ol How can developing countries Security of Supply in Electricity integrate responses to environmental New Zealand government-financed labour market Markets: Evidence and Policy threats into their national poverty ISBN: 926419150X programmes for young people; the Issues LI reduction and development plans? 184pp. 24 tables, 71 graphics "gender gap" in pay and employment ISBN: 9264198059 While focusing on the Rio Special feature: Public spending. conditions for women by comparison conventions, many of these findings with their male counterparts; wages 180pp $100 £67 Y12.750 MXN875 apply equally to other global or Sweden J and fringe benefits offered by regional environmental issues. ISBN: 9264191569 temporary jobs; the challenges 120pp, 26 tables, 38 graphics facing policy-makers in dealing Energy Statistics of OECD Countries: 1999/2000 Creditor Reporting System on Aid Special feature: Enhancing the with iong-term unemployment; and ISBN: 9264097856 Activities: Aid Activities Targeting effectiveness of public expenditure. the cross-market effects of product the Objectives of the Rio and labour market policies. 460pp Conventions 1998/2000 Poland $110 £73 ¥13,900 MXN955 OECD Health Data 2002: ISBN: 9264091882 ISBN: 9264191542 280pp, 200 tables 85pp, 25 tables, 29 graphics A Comparative Analysis of Energy Policies - 30 Countries United States $35 £19 ¥3,500 MXN262 Presents the latest prospects for economic recovery, with ISBN: 9264098585 ISBN: 9264197621 "technology and Poverty Reduction recommendations on improving CD-ROM I 20pp in Asia and the Pacific public expenditure, and monetary $295 £200 ¥32,700 MXN2.790 $75 £52 ¥9,700 MXN525
591 Observer No. 233 August 2002 BOOKS
2ft Just published
y =
countries: recent developments International Direct Investment Towards Sustainable Household ENVIRONMENT and structural issues; Experiences Statistics Yearbook: 1980/2000 J Consumption? trends and Policies with ihe resolution of weak ISBN: 9264098038 in OECD Countries Strategies to Reduce Greenhouse financial institutions in ihe OECD 480pp, 240 tables, 145 graphics ISBN: 9264197370 Gas Emissions from Road area; Risk transfer mechanisms: $76 £53 ¥10,100 MXN690 150pp, 30 tables, 44 graphics Transport: Analytical Methods converging insurance, credit and $31 £22 Y4.000 MXN215 ISBN: 9264196781 capital markets; Insurance statistics. Measuring the Non-Observed See review. 72pp, 13 tables, 10 graphics Economy: A Handbook J $18 £12 ¥2,000 MXN172 Anti-corruption Measures in ISBN: 9264197451 What are the measures and TRANSPORT South Eastern Europe: 242pp strategies already taken by OECD Civil Society's Involvement $49 £34 ¥6,300 MXN340 countries to reduce or stabilise ISBN: 92641974-6X Impact of Transport Infrastructure greenhouse gases from road 95pp Insurance Statistics Yearbook: Investment on Regional transport? With the continued $19 £12 ¥2,300 MXN120 1993/2000 Development ISBN: 9264195791 growth forecast in car ownership and ISBN: 9264097953 distance travelled, what are the 325pp, 55 tables 152pp expected trends in CO2 emissions GOVERNANCE $35 £25 ¥4,600 MXN245 $85 £58 ¥9,550 MXN815 and their consequences for the How can the efficiency of allocating potential achievement of the Turkey: Crucial Support for funds for transport infrastructure be Kyoto Protocol? Economic Recovery Q SUSTAINABLE improved? Is the widely-used ISBN: 9264198083 DEVELOPMENT approach of cost-benefit analysis Handbook of Biodiversity 153pp, 8 tables appropriate? Does transport Valuation: A Guide for Governance lor Sustainable $35 £24 ¥4,600 MXN315 infrastructure investment have wider Policy Makers An overall analysis and assessment, Development: Five OECD impacts on regional development? ISBN: 9264197311 set within a macroeconomic Case Studies 160pp, 12 tables context, of regulatory achievements ISBN: 92641.87472 Trends in the Transport Sector: $36 £25 ¥4,000 MXN340 and challenges including the 352pp, 12 tables 1970-2000 quality of the public sector, $40 £28 ¥4,550 MXN385 ISBN: 92821 13752 This publication presents five 50pp, 16 tables, 1 5 graphics FINANCIAL AND competition policy and market openness. Its special focus is on governmental experiments aimed at $19 £12 ¥2,300 MXN160 FISCAL AFFAIRS regulatory progress in the promoting sustainable development in electricity, gas, road freight Canada, Germany, Japan, the Key Issues for Transport Fighting Hard Core Cartels: transport and telecommunications Netherlands and the United Kingdom. Beyond 2000 J Harm, Effective Sanctions sectors. The five case studies illustrate specific ISBN: 92821 13604 and Leniency institutional and decision-making 656pp, 132 tables, 79 graphics ISBN: 9264197354 Poland: From Transition to efforts to adapt governance frameworks $115 £80 ¥14,900 MXN800 85pp New Regulatory Challenges in order to respond to sustainable $27 £18 ¥3,450 MXN185 ISBN: 92641981 13 developmenl challenges. Tolls on Inlerurban Road 131pp, 13 tables Infrastructure: An Economic Debt Management and $35 £24 ¥4,600 MXN315 Bus Systems for the Future: Evaluation Government Securities Achieving Sustainable Transport ISBN: 9282113744 Markets in ihe 21st Century Worldwide Territorial Review of 161pp, 32 tables, 36 graphics ISBN: 9264198075 ISBN: 9264198067 Canada $45 £31 ¥5,050 MXN430 180pp, 22 tables ISBN: 9264198326 200pp $40 £28 ¥5,150 MXN275 $100 £67 ¥12.750 MXN875 200pp, 15 tables, 30 graphics Reviews recent trends in the See review. $40 £28 ¥5,200 MXN355 Latest Policy Briefs structure of OECD government securities markets and public debt More than Power: Renewable Free online at www.oecd.org/ management operaiions, and INDUSTRY SCIENCE Energy for Developing Countries ZS Click "Documentation" highlights the generic structural AND INNOVATION ISBN: 9264198369 policy issues in emerging debt (top of screen)
markets. This report analyses the OECD Information $75 £50 ¥9,500 MXN650 Towards Sustainable impact of advanced electronic Technology Outlook: ICTs and Most of the recent deployment of systems on markets. It also addresses the Information Economy LI renewable energy technologies has Household Consumption? the introduction of new instruments ISBN: 9264197540 occurred in industrialised countries, Trends and policies in OECD (index-linked bonds and derivatives), 300pp, 65 tables, 134 graphics yet their greatest potential may lie countries as well as policies related to S66 £46 ¥8.600 MXN460 elsewhere. This publication describes investor relations. the potential benefits of renewables to Public Service as an Employer of Choice Structural Statistics lor countries that have not yet fully OECD Public Debt Markets: tnduslry and Services: industrialised and demonstrates their Trends and Recent Structural Briefs on Economic Surveys Core Data 1992-1999 cost-effectiveness in different market
Changes ISBN: 9264097201 of: Greece; Hungary; Mexico; ISBN: 9264197613 New Zealand; Poland; Slovak 526pp, 374 tables 284pp, 43 tables, 73 graphics $63 £43 ¥7,050 MXN600 Working Together Towards Republic; Sweden; $49 £34 ¥6,300 MXN340 Sustainable Development J Switzerland OECD Code 972002131E1 Hard Core Cartels - Harm Financial Market Trends STATISTICS 86pp, 25 graphics and Effective Sanctions No. 82 Free publication OECD Code 27200202 1P1 OECD in Figures The report assesses the contribution G The New Regionalism in 188pp, 12 tables, 31 graphics ISBN: 9264197982 made by OECD countries, both Sub-Saharan Africa: More Sold as subscription only. 96pp, 70 tables, 14 graphics at home and internationally and brings than meets the eye? Includes chapters on: Recent $15 £9 ¥1,700 MXN120 together the main lessons learned
privatisation trends in OECD Free with subscription to OECD through the Organisation's extensive LI Electronic Commerce countries; Risk capital in OECD Observer. work on sustainable development.
160 Observer No. 233 August 2002 DATABANK
OECD in graphs
Farm support How green is Total Support Estimate, % of GDP farm support? Turkey
Korea
Hungary'
Switzerland
Iceland
Overall support to agriculture in OECD countries fell European Union slightly in 2001. which could help reduce pressure on the Slovak Republic1 Norway environment, but generally agricultural policy reform has been Japan Czech Republic1 slow, variable and insufficient, the latest report on Agricultural OECD2
Mexico
Policies in OECD Countries: Monitoring and Evaluation 2002 Poland' found. Several countries introduced new measures to address United States environmental concerns in 2001 . including setting Australia New Zealand environmental targets, reducing pollution or encouraging more sustainable agricultural production. Australia and the European Notes: Countries are ranked according to 1999-2001 levels. Union announced goals for biodiversity conservation, while 1 . For the Czech Republic. Hungary, Poland and the Slovak Republic, 1986-88 refers to 1991-93. measures to reduce pesticide levels were introduced in 2. For 1986-88, the Czech Republic. Hungary. Poland and the Slovak Republic are excluded. Source: OECD, PSE/CSE database, 2002 Denmark, France and the Netherlands. The Czech Republic, Norway and Switzerland meanwhile increased spending to encourage organic farming. Much environmental spending is in the form 2001 were still on average 31% above world prices, shielding of payments to farmers in return for changing production methods to farmers in many countries from world prices, although l he- reduce environmental damage or lo remunerate them for providing difference is lower than a 58% gap in the mid-1980s. Total support environmental services. Such payments account for most of support to agriculture in 2001 came to US$311 billion, or 1.3% of GDP, classified as "measures of payments based on input constraint", which compared with an average 2.3% m 1986-1988. Significant rose to 3% of total support to farmers in 1999-2001 from 1% in 1 986- differences remain across countries and commodities. Producer 1988. support levels range from 1% of farm receipts in New Zealand to Still, support lo agricultural producers accounted for 31% of total some 60% or more in Japan or Switzerland. Producer support is farm receipts in the OECD area in 2001, compared with 32% in 2000 21% of farm receipts in the US and 35% in the EU. and 38% in 1986-88. Three-quarters ol support to producers m OECD Agricultural Policies in OECD Countries: Monitoring and Evaluation 2002 countries distort production and trade, and prices received by farmers in OECD Agricultural Outlook 2002 (see News brief, page 5).
Cigarette smoking has fallen sharply across OECD countries in Unsustainable habits the past 40 years, as governments waged health campaigns and raised taxes on tobacco to discourage the habit. Sweden can claim the lowest smoking rale among OECD countries, with 1 8.9% ol ihe population admitting to being regular smokers in 2000, clown from 25.8% in 1990, followed by the US with 19.0%, clown from 25.6% Smokers a decade earlier. The Japanese can meanwhile claim the dubious % of adults who report being daily smokers, 1990 and 2000 distinction ol being the heaviest smokers, with 34.3% of people- taking a puff daily in 1999, just slightly lower than 37% in 1990, figures in the latest edition of OECD Health Data show. But if US residents have been smoking less they have also been eating more, with the health data reporting that 26% of the population suffer from obesity, the highest recorded among OECD countries. The heavier-smoking Dutch, on the olher hand, have an obesity level of just 8.7%. This coïncidence should not be seen as a recommendation to "weight-challenged" people to take up smoking in a bid to shed some kilos, since both excess weight and cigaretles are associated with serious health risks and high medical costs. One notable difference between them, though, is that while cigarette ,* # # O* O* O* c? # £> o*
61 Observer No. 233 August 2002 DATABANK
Indicators
Gross Domestic Product Leading Indicator Consumer Price Index period % change from previous period % change from previous period % change from previous period year period year period year MEMBERS
Australia Ql 02 0.9 4.2 May 02 0.4 8.1 Ql 02 0.9 2.9
Austria Ql 02 0.5 -0.2 Apr. 02 1.0 2.4 May 02 0.3 1.9
Belgium Q4 01 -0.4 -0.7 May 02 2.8 6.7 May 02 0.2 1.3
Canada Ql 02 1.5 2.1 May 02 0.1 8.6 May 02 0.2 1.0
Czech Republic Ol 02 2.5 May 02 -0.1 2.5
Denmark Ql 02 0.2 1.1 May 02 1.6 8.1 May 02 0.1 2.1
Finland Ql 02 -0.6 -1.9 Jan. 02 -0.5 0.7 May 02 0.2 1.3
France Ql 02 0.4 0.3 May 02 0.1 -0.2 May 02 0.1 1.4
Germany Ql 02 0.2 -0.2 May 02 0.5 0.3 May 02 0.0 1.1
Greece 2000 4.3 Apr. 02 0.5 4.0 May 02 -0.1 3.4
Hungary 2000 5.2 May 02 0.5 5.6
Iceland 2001 3.0 May 02 -0.2 5.7
Ireland 2001 5.8 Apr. 02 0.1 1.6 May 02 0.5 4.7
Italy Ql 02 0.2 0.1 May 02 0.3 3.0 fun. 02 0.1 2.2
Japan Ql 02 1.4 -1.6 May 02 0.2 2.5 May 02 0.3 -0.9
Korea Ql 02 1.8 5.0 Jan. 02 -0.1 2.6
Luxembourg 2001 3.5 May 02 2.5 6.3 May 02 0.3 1.9
Mexico Ql 02 0.6 -0.4 May 02 -0.7 6.9 May 02 0.2 4.7
Netherlands Ql 02 0.0 0. 1 May 02 0.4 2.8 May 02 0.0 3.3
New Zealand Ql 02 1.4 4.7 Ql 02 0.6 2.6
Norway Q4 01 0.2 1.8 Apr. 02 0.2 0.3 May 02 0.3 0.4
Poland 2000 4.0 May 02 -0.2 1.8
Portugal Q4 01 0.4 1.0 Apr. 02 1.5 2.9 May 02 0.6 3.3
Slovak Republic Ql 02 3.9 May 02 0.2 3.2
Spain Ql 02 0.5 2.0 May 02 1.0 1.5 May 02 0.4 3.5
Sweden Ql 02 0.3 0.8 Apr. 02 0.0 3.5 May 02 0.3 1.8
Switzerland Ql 02 0.2 0.2 May 02 0.2 -0.4 Jun. 02 -0.1 0.3
Turkey Ql 02 2.3 Jan. 02 0.6 42.6
United Kingdom Ql 02 0. 1 1.1 May 02 0.9 3.6 May 02 0.3 1.1
United States Ql 02 1.5 1.7 May 02 0.2 1.9 May 02 0.0 1.2
Euro area Ql 02 0.2 0. 1 May 02 0.5 1.7 May 02 0.2 2.0
NON-MEMBERS Retail sales
Brazil May 02 0.2 7.8
Bulgaria Q3 01 1.2 4.6 Apr 02 -1 8 3.5 May 02 -2.1 6.9
China
Estonia Q4 01 1.3 5.8 Apt: 02 2 6 17.1 May 02 0.2 4.1
Indonesia Q3 01 -0.9 3.6 May 02 0.8 12.9
Latvia Q4 01 3.6 6.3 Apr. 02 -2 6 15.7 May 02 0.1 2.0
Lithuania Ql 02 0.2 4.0 Mar. 02 2 9 10.8 May 02 -0.3 0.5
Romania 2000 1.6 Apr: 02 2.0 27.1
Russian Federation 2000 8.4 Jul. 01 5 3 17.2 Apr. 02 1.2 16.3
Slovenia qi 02 1.6 3.7 May 02 0.3 7.5
South Africa Ql 02 0.8 2.1 Mar. 02 -0 2 6.2 May 02 0.8 8.4
Ukraine Feb. 02 -3 5 16.8 Mar. 02 -0.7 2.2
Definitions & notes Leading Indicators: A composite indicator based on olher Consumer Price Index: Measures changes in average retail indicators of economic activity (qualitative opinions on prices of a fixed basket of goods and services. 1 1ICP for Gross Domestic Product: Volume series; seasonally adjusted production or employment, housing permits, financial or Euro area. except for Czech Republic, Slovak Republic, Poland and monetary series,elc), which signals cyclical movements in Turkey. Data for ihe Euro area supplied by Eurostat. industrial production from six to nine months in advance.
62 Observer No. 233 August 2002 DAEABANK
Indicators
Current Balance Uncmployment Rate Interest Rate- period current same period period current same period period current same period period last year period last year period last year MEMBERS
Ql 02 -2.86 -2.44 May 02 6.3 6.8 May 02 4.84 4.89 Australia
# Q4 01 -0.56 -0.95 May 02 4.1 3.5 Austria
Q4 01 2.31 2.32 May 02 6.8 6.6 Belgium
Ql 02 3.74 8.54 May 02 7.7 7.0 fun. 02 2.76 4.41 Canada
Ql 02 -0.35 -0.84 Ql 02 7.6 8.3 J un. 02 3.78 5.09 Czech Republic-
Ql 02 0.92 1.84 May 02 4.2 4.3 May 02 3.66 5.02 Denmark
Apr. 02 0.19 0.43 May 02 9.3 9.0 * Finland
* Apr. 02 1.09 -0.27 May 02 9.2 8.6 France
Ql 02 0.97 -0.20 May 02 8.1 7.7 Germany
Dec. 01 -0.87 -0.92 Greece
Apr. 02 -0.35 -0.18 Q4 01 5.8 6.2 May 02 8.49 11.10 Hungary
Q102 0.00 -0.20 May 02 2.2 1.4 May 02 8.70 11.12 Iceland
Q4 01 -0.31 -0.46 May 02 4.4 3.7 Ireland
* Jan. 02 -0.93 -0.03 Apr. 02 9.0 9.5 Italy
Apr. 02 8.86 7.63 May 02 5.4 4.9 J tin. 02 0.03 0.03 Japan
Apr. 02 0.63 1.04 May 02 3.1 3.7 May 02 4.80 5.90 Korea
* Q4 01 0.78 0.18 May 02 2.3 1.9 Luxembourg
Ql 02 -4.17 -4.77 May 02 2.7 2.4 May 02 6.69 12.61 Mexico
Ql 02 5.09 2.80 Apr. 02 2.6 2.2 Netherlands
Ql 02 -0.20 -0.47 Ql 02 5.3 5.4 /tin. 02 5.96 5.82 New Zealand
Ql 02 6.32 6.77 Ql 02 3.9 3.5 May 02 6.90 7.45 Norway
May 02 -0.60 -0.73 May 02 17.3 16.0 May 02 9.44 15.98 Poland
Ql 02 -2.35 -2.44 May 02 4.3 4.0 * Portugal
Ql 02 -0.36 -0.35 Ql 02 19.4 19.7 Mar. 02 9.00 9.80 Slovak Republic
Mai: 02 -0.51 -0.86 May 02 11.4 10.6 * Spain
Apr. 02 0.76 0.10 May 02 5.1 5.0 jun. 02 4.28 4.17 Sweden Ql 02 6.42 5.68 May 02 2.6 1.7 May 02 1.14 3.15 Switzerland
Ql 02 -0.05 -0.20 Ql 02 11.8 8.6 Jun. 02 48.00 63.00 Turkey
Q4 0! -10.93 -7.94 Mar. 02 5.1 4.9 May 02 4.08 5.17 United Kingdom
Ql 02 -112.49 -107.72 May 02 5.8 4.4 Jun. 02 1.81 3.74 United States
Apr. 02 -3.81 -3.57 May 02 8.3 8.0 May 02 3.47 4.64 Euro area
NON-MEMBERS
May 02 -1.83 -2.18 Brazil
Mar. 02 -0.06 -0.05 Apr. 02 3.92 4.36 Bulgaria
2000 20.52 15.67 China
Apr. 02 -0.08 -0.06 May 02 5.8 6.3 Mav02 7.17 6.10 Estonia
Q4 01 0.56 2.50 May 02 16.57 14.92 Indonesia
Apt: 02 -0.05 -0.04 May 02 7.9 7.8 May 02 9.20 11.50 Latvia
Ql 02 -0.10 -0.14 May 02 11.3 12.5 May 02 10.78 8.88 Lithuania
Mar. 02 -0.11 -0.07 Apr. 02 10.6 9.4 Mar. 02 33.40 49.90 Romania
Q3 01 7.58 10.54 Dec. 01 1.6 1.4 Apr. 02 13.50 10.30 Russian Federation
Apr. 02 0.00 -0.03 Dec. 01 11.6 11.8 May 02 8.87 11.36 Slovenia
Ql 02 1.18 1.04 May 02 11.38 10.36 South Africa
Q3 01 0.39 0.90 Nov. 01 4.7 5.2 Apr. 02 27.10 33.00 Ukraine
Current balance: Billion US dollars; seasonally adjusted Unemployment Rale: Per cent ol civilian labour force Interest Rale: Three months, except for Turkey (.overnight except lor Greece, Ireland, and listed non-member standardised unemployment rale; national definitions for interbank rate). Euro area rate is applicable lor the 12 Euro . Data for Poland are on a c i basis Iceland, Korea, Mexico, Poland, Switzerland and Turkey; area countries. * Refer to Euro area. seasonally adjusted apart from the Slovak Republic and Sciure: Main Economic Indicators, July 2002; Quarterly Turkey. Naiional Accounts database.
63 Observer No. 233 August 2002 DAEABANK
OECD in graphs
Higher employment, lower pay Lower-paid women The gender wage gap and women's employment Persons aged 20 to 64 years
Gender wage gap'1 (°o) Gender wage gaps (so) The number of women going out to work has risen in most
OECD countries in recent years and their wages have risen too. GBR
But no matter how the gender wage gap is measured, women's A NT CHE NLD* 4 USA hourly earnings are still below those received by men in all IRL* DEU* f*NC^1-^^^^' countries, averaging 84% of male wages, or a wage gap ol 16 _- ESP percentage points, the latest OECD Employment Outlook, found. GRC
AUS Women in Portugal come closest to equal pay with their male FRA «, counterparts, with a wage gap of just 5 percentage points, while ITA BEL
+ PRT i , those in the United Kingdom have ihe widest gap, with women's i wages at 75% of their male counterparts' salaries. The gap remale employment rate" (%) exacerbates the fact that even if they were on the same hour!)' rate, many women would lake home less pay than men anyway, as they a. Percenlage difference between male and female average hourly wages. are more likely to do part-time work or work shorter full-time b. Percentage share of women in wage and salary employment Source: OECD Employment Outlook. 2002 hours. Still, the proportion of women in work has risen in ihe past two decades in all OECD countries and in some, such as Denmark and in employment is only about 30%, as many of those would Sweden, nearly as many women as men are in employment. But as be skilled workers, their pay gaps with men are narrower, ail the chart shows, countries with higher female employment rates olher things equal. By contrast, a higher proportion of female also have wider wage gaps. This is because women with a employment is low-skilled in the Nordic countries, the university education tend to work in all countries, but less United Kingdom and the United States, causing the gender educated women work m large numbers only in countries where gap to be wider. the overall employment rale lor women is high. Hence, in countries like Greece, Italy and Spain, where the share of women OECD Employment Outlook, 2002.
Semiconductor slide
Semiconductors are the building blocks Semiconductor trends lor the electronic revolution that we art- World semiconductor market by application (end markets), 1990 and 2000 living. But their production and use is 1990 2000 largely driven by a limited range ol electronic products such as PCs and mobile Consumer 15% Consumer 24:.-. phones. If we can keep making faster, Computer 4r Automotive 6% smaller and cheaper chips, we can produce better IT goods and services. Therein lies a | I Automotive 5% problem: lately, falling demand led to Telecommunications oversupply in the semiconductor industry Telecommunications where rapid innovation is the key; stock Military 4% Industrial 12% goes out of date quickly, becoming virtually Military 1% Industrial unusable. Hence the concern over the recent Source: OECD, based on WSTS, 2001 31.2% fall in the value in 2001 of world semiconductor market, mirroring the semiconductors, but their share has slipped m 2001, al around 30%, while the share m decline in IT demand. In some ways, it is a to 41% of the total from 46%. The share of Europe and the Americas was below 10%. reality check aller a decade ol compound semiconductors going into the télécoms But new growth in the game console market annual growth of almost 10%. Much of the sector rose lo 24% of the total in 2000, the and the arrival of DVD and digital set-lop increase in semiconductor use between latest OECD Information Technology Outlook boxes is expected to contribute to a 1990 and 2000 was related to the explosion says. Japan is the only region in which recovery consumer electronics accounted for a of the Internet and mobile phones. Sec News briefs. Computers are still the mam end market lor sizeable share of the semiconductor market OECD Information Technology Outlook, 2002.
64 Observer No. 233 August 2002 .ftRGANiS/vflON FOR ECONOMIC' CO-OPERATION AND DEVELOPMENT
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www.oecd.org Invest in Africa's farmers for long term economic growth
If farming is the basis for rural livelihoods, should it not be the starting point for building a prosperous rural economy and the only sound base for building food security for the poor?
Start from where people are and build on what they have.
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