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OECD chief praises green political 'muscle'

OECD's chief predicted that politicians who fail to take climate action by shaping policies for "our children's future" will be voted out.

GENEVA (AN) — The Organization for Economic Cooperation and Development's chief predicted on Wednesday that politicians who fail to take climate action by shaping policies for "our children's future" will be voted out.

OECD Secretary-General Ángel Gurría, a Mexican economist and diplomat, urged the governments of his 36-nation organization to heed the pressure from millions of angry youth and other citizens worried about the overheating planet.

“Governments now have a much bigger problem on their hands than me delivering a biennial admonishment on the need for urgent action: if they don’t act to curb climate change through radical measures that take well-being and inclusion into account, they will be held accountable at the ballot box," Gurría said in a major speech to the Graduate Institute of International and Development Studies.

"The ‘green wave’ that dominated the recent European elections demonstrates not only a rising tide of awareness, but also muscle," he said. "So be it by political conviction or electoral convenience, leaders need to think big and act bigger.”

Gurría was referring to the rise of the left-leaning Greens, who gained 17 seats in European Parliament elections, making it the fourth-largest political party with 69 seats. Its 2% gain now gives it 9% of the 751-seat parliament. Propelled by climate activism among European Union voters, Greens surged to second place in Germany and third place in France.

Two traditional major parties of center-left social democrats and center-right conservatives no longer have the centrist majority, dropping from 53% down to 43 combined. That means their agenda depends on alliances with Greens and other centrists. But combined with Greens, they would have a 52% majority.

The Greens’ young supporters in the European Parliament also shared a pro-E.U. sentiment, sharply contrasting with far-right populists and anti-immigrant nationalists who drew substantial support from Europe’s voters.

In the months and days leading up to the May 23-26 elections for parliament, tens of thousands of youth demonstrators across Europe joined in climate strikes uniting 1.8 million young people in 125 nations, according to tallies kept by the Fridays for Future movement.

“Our children and youth are angry. And they have every right to feel enraged," Gurría observed.

"After a three-year plateau from 2014 to 2016, energy-related carbon dioxide emissions are rising again, reaching unprecedented levels in 2018," he said. "The jump from 2017 emissions was equivalent to the amount of total emissions from international aviation last year! Coal, oil and gas continue to meet the lion’s share of global primary energy demand growth.”

Policies shaped around 'our children's future'

Gurría said the OECD, a forum for democracy and market economies among 36 mostly high-income nations, has "repeatedly called upon governments to put national agendas and 'short term-ism' aside and honor their climate commitments ... to put a meaningful price on carbon, to phase out state support for fossil fuels, and to stop burning coal.”

The 2015 Paris Agreement seeks to prevent average global temperatures from rising more than 2 degrees Celsius above pre-industrial levels, or 1.5 degrees C. if possible. U.S. President Donald Trump announced in 2017 that he would withdraw the United States from the agreement.

But one of its provisions bars any nation that signed it from giving a one-year notice of departure until at least November 4, 2019. This means none of the signatories, including the United States, can exit until November 4, 2020 — exactly one day after the next U.S. presidential election. The Trump administration denies the science of human-caused climate change and wants to increase coal-burning in the United States, the second-biggest greenhouse gas emitter behind China.

The Nobel Prize-winning United Nations’ Intergovernmental Panel on Climate Change, or IPCC, concluded in a major report last year that even the most optimistic scenarios for lowering global greenhouse gases in line with the Paris accord will have serious repercussions for the planet and future generations.

Its report found that limiting the global average temperature increase to 1.5 degrees C. would avert 150 million premature deaths over the 21st century, cause 0.1 meters less sea rise and halve the number of people who lacked fresh water. Substantially fewer heatwaves and droughts would result, it said, and the world’s coral reefs might survive.

But that would mean the global economy must become “carbon neutral” by 2050, it said, which would require forcing a sharply downward curve in carbon dioxide emissions to the atmosphere starting in 2020.

Last December, almost 200 nations at a United Nations-brokered climate summit adopted a rulebook for the agreement that sets out how nations must report their reductions in carbon emissions and pay for further climate action.

But the talks apparently deadlocked over “cap-and trade” systems mainly used regionally to make industrial carbon emissions an artificially scarce commodity. Governments set caps for carbon emissions across an industry, or entire economy, then add penalties for violations.

The caps are split into allowances and distributed by governments to companies. These can be bought and sold on the carbon marketplace. As a cap declines over time, industries are supposed to have a growing incentive to use energy more cleanly and efficiently.

Europe’s Greens have favored an overhaul of the cap-and-trade program known as the E.U. Emissions Trading System, launched in 2005. After 14 years of effort, Europe’s carbon market is worth US$38 billion a year and serves as the continent’s chief strategy for cutting carbon emissions from industry.

But after peaking at almost US$36 a ton in 2008, European carbon prices crashed during the global financial crisis because the system created too many allowances. The market was further oversupplied by non-E.U. carbon credits. Prices reached a low of about US$3.65 a ton in 2013. The prices, as with other markets, are driven by supply and demand.

“Treating carbon pricing as a ‘mainstream’ tax policy, with few constraints on revenue use, would help cleave support for carbon pricing from the social impacts of carbon pricing and carbon revenue itself, to depend on performance of the overall system," Gurría said.

“We can’t have a common future if we leave behind the vulnerable segments of our population, who often stand to be hardest hit by climate change," he said. "Locations where ‘brown’ jobs are lost may also not coincide with where ‘green’ ones are created. And post-displacement jobs often tend to be ‘worse’ along a number of dimensions."

The cap-and-trade system is essentially a political tool to curb pollution and spur business investment in low-carbon technology. Overhauling it to work as intended would require assurances that, on the supply side, power operators receive only as many allowances as they actually need.

The demand side fluctuates with the economy and what types of emissions are included. Prices declined again in early 2016 and after the June 2016 Brexit referendum, then slowly recovered in early 2017 and continued to rally to about US$28 a ton in 2018. An important factor has been anticipation of the ETS Market Stability Reserve starting in 2019 that will hold back 24% of surplus market allowances to 2023.

“Our policies have to be made with our children’s future in mind," said Gurría. "Short-term decision-making can lock countries into expensive mistakes in financing and developing infrastructure … that will be neither necessary nor profitable in a low-emissions world, they will be stranded assets.”

“This radical transformation demands a profound systemic change," he added, "and we are all part of this system.”