evelopments at COP16 in Cancun are an important breakthrough for action tolimit global Greenhouse Gas (GHG)emissions and help to build cleanereconomies. But the momentum must be maintained to COP17 in Durban.Policymakers are currently confronted by staggeringcrises, including the aftermath of two earthquakes inAsia-Pacific, geopolitical upheaval in North Africa, anda still fragile economic recovery. The social impacts ofthese crises are all too evident, as is the need forurgent policy action. Against this backdrop of thevisible and urgent, there is a risk that climate changeand the significant outcomes achieved at theconference in Cancun barely four months ago may fadeinto the rear view mirror of policymakers.Yet, fighting climate change is very much a pressingpriority even in these challenging times. Our societiesneed to do more to enhance their resilience to a widerange of natural hazards, including those exacerbatedby climate change. Meanwhile, mitigating climatechange is not a luxury, but part of the solution totransitioning from a still fragile recovery to a moresustainable growth path. At the OECD, we are lookingat the approaches that can help countries movetowards low-carbon and more resource-efficient growth- greener growth. Ambitious global action to mitigate GHG emissions isnot only necessary, but economically rational. Thepotential that exists to generate sizeable fiscalrevenues from the use of market instruments inclimate policy is especially attractive in current timesof financial hardship. OECD analysis estimates that, ifindustrialised countries were to achieve their emissionreduction targets using only auctioned tradeableTO DURBAN AND BEYOND:MOVING THE CLIMATEAGENDA FORWARD 126LOOKING TO DURBANDANGEL GURRÍA, SECRETARY-GENERAL, ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT (OECD)02040CHART 1.THE IMPACT OF DIFFERENT OFFSET LIMITS ON THECOSTS OF REACHING THE CLIMATE TARGETS OF ANNEX ICOUNTRIES IN 2020 Source: OECD (2010), "Costs, revenues, and effectiveness of the CopenhagenAccord emission pledges for 2020", Environment Working Paper 22,www.oecd.org/env/cc/econ.0.500.450.400.350.300.250.200.150.100.050.000.400.45GDP costs in %0.290.310.190.19Limit on offsets in %Low & FragmentedHigh & LinkedLow end of pledges, fragmented marketsHigh end of pledges, Linked A1 marketpermits or carbon taxes, they could raise revenues of asmuch as one per cent of GDP (or US$400 billion) by2020. This money could be used to support climatechange action, for example to finance adaptation andmitigation in developing countries. Following theeconomic crisis, revenues could also be used for fiscalconsolidation, while in emerging economies, theycould finance other pressing priorities, such aseducation, health care and poverty alleviation. A successful outcome of the negotiations at the COP17in Durban should include progress on a number ofelements. Policy makers need to move forward on a
LOOKING TO DURBAN127Above right:Angel Gurría,Secretary-General,Organisation forEconomic Co-Operationand Development (OECD)CHART 2. WHAT IS DRIVING TECHNOLOGY TRANSFER? THECASE FOR WIND POWERSource: The histogram shows the relative importance of different determinantsof transfer of wind power technologies, from Annex I to non-Annex I countries.Source: Hascic, Ivan and Nick Johnstone "The Clean Development Mechanismand International Technology Transfer: Empirical Evidence on Wind Power UsingPatent Data." in Climate Policy (forthcoming 2011).0.500.400.300.200.100.00-0.1-0.2Contempora-neous effectof CDM'Stock' effectof CDMSupply of Inventionsfrom SourceCountriesAbsorptiveCapacity ofRecipientCountriesTotal Transfer (control)0.0438-0.10850.43130.20780.0535balanced portfolio of issues: mitigation action,adaptation, climate finance, competitiveness impacts,and innovation in cleaner technologies. A robust systemfor reporting and verifying mitigation action and financeflows will also be essential to build trust. On GHG mitigation and costs, it is promising that manycountries are willing to commit to specific targets oractions. However, OECD analysis suggests that eventhe most ambitious targets declared by industrialisedcountries would reduce their emissions collectively byat most 17 per cent by 2020 compared with 1990levels, and this falls short of the 25-40 per centreduction suggested by IPCC for a pathway to limitglobal average temperature increase to 2°C. The costsof action are small when compared to expectedeconomic growth and substantially less than mostestimates of the costs of inaction; the OECD estimatesthe costs of achieving the current declared targets tobe around 0.3 per cent of global GDP in 2020.The use of market-based approaches, such asemissions trading schemes and carbon taxes, will becritical to keep the costs of action affordable and tobuild-up a global carbon market. OECD analysis showsthat carbon offsets also have an important role to play,allowing the cheapest mitigation options to beexploited first no matter where they are (Chart 1). Atthe same time however, the more offsets that are used,the less potential there is for a country to raisedomestic fiscal revenues. We also need to move quickly to enhance action onadaptation through international cooperation anddomestic action at national, sectoral and local levels.The negative impacts of climate change will hit poorpeople and countries disproportionately. Broadagreement on adaptation priorities and a means toaddress these, will help facilitate and co-ordinatesupport and also accelerate the flow of finance tosupport action. To be effective, adaptation needs to beintegrated into development policy-making andplanning, including in the context of national plans,such as Poverty Reduction Strategies. Likewise, manydevelopment activities can also contribute to buildingresilience to climate change. OECD work ishighlighting what can already be accomplishedthrough existing channels, through work on IntegratingAdaptation to Climate Change into Development Co-operation (OECD, 2009) and on harnessing theinnovative potential of the private sector in forging newsolutions to manage climate risks.Action on both mitigation and adaptation is closely tiedto climate change finance - one will not happenwithout the other. The Cancun Agreements included acommitment by developed countries to deliver fast-start finance of US$30bn for 2010-2012 and alonger-term goal to mobilise US$100bn per year by2020 from public and private sources. Governmentsalso committed to create a Green Climate Fund.Delivering on these financial and institutionalcommitments will be critical to building trust and co-operation between countries at different levels ofdevelopment. A challenge will be to enhance themeasurement, reporting and verification (MRV) ofclimate finance, building on the existing informationsystems such as the OECD Creditor Reporting Systemthat already tracks official development assistancetargeting climate change mitigation and adaptation.More generally, MRV of targets, actions and finance, isessential nationally to track policies and assess their effectiveness and internationally, to ensuretransparency and accountability amongst countries on climate change, including fulfillment ofinternational commitments. OECD is working on?