Focus on green recovery

Latest highlightsSpeed the transitionTrack progressLeverage financeResources
Latest highlightsSpeed the transitionTrack progressLeverage financeResources
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HomeData insightsPolicy responses Country Policy TrackerFocus on an inclusive recoveryFocus on social challengesFocus on the global economyFocus on resilient healthcare

Cleaner air quality, healthier water, effective waste management, and enhanced biodiversity protection not only reduce the vulnerability of communities to pandemics and improve resilience, but have the potential to boost economic activity, generate income, create jobs, and reduce inequalities.

Discover below how green recovery is a win-win strategy and how governments can have a once-in-a-lifetime opportunity to ensure a sustainable recovery if they:

  • Step up actions for a green and inclusive recovery.

  • Speed the transition to a low-emissions economy.

  • Track progress through pertinent, comparable and timely data.

  • Leverage finance to invest in the green recovery.

> Read the policy response

When world leaders gathered in Paris in 2015, they succeeded in agreeing a comprehensive, ambitious and universal global agreement on climate change. But temperatures are hitting record levels and many developing countries have been hit by devastating cyclones this year. We are sleepwalking into a catastrophe if we let climate change rise unchecked.

READ THE STATEMENT

Step up green recovery actions

Many governments have included “green” recovery measures in their crisis recovery packages – for example through grants, loans and tax reliefs directed towards green transport, circular economy and clean energy research, development and deployment.

But so far the balance between green and non-green spending is not favourable in terms of the support towards positive environmental outcomes.

Furthermore, recent OECD country analysis of green recovery measures indicates that a number of governments are using the post-COVID measures to roll back existing environmental regulations and taxes, and increase fossil-fuel intensive infrastructure and electricity.

However, green recovery measures can also include new funding and programmes to create jobs and stimulate economic activity through ecosystem restoration, control of invasive alien species and forest conservation.

What can governments do to support a green recovery?

BUILD BACK BETTER

Unchecked, global environmental emergencies such as climate change and biodiversity loss could cause social and economic damages far larger than those caused by the COVID-19 pandemic. To avoid this, economic recovery packages should be designed to “build back better”.

> Discover

ACCELERATE A LOW-CARBON TRANSITION

Though addressing the health crisis and providing relief to affected businesses and workers are the current priorities, post-crisis recovery programmes present an opportunity to more closely align public policies with climate objectives and limit the risk of locking-in carbon-intensive infrastructure.

> Discover

STRENGTHEN BIODIVERSITY PROTECTION

Biodiversity loss is a key driver of emerging infectious diseases and poses a variety of other growing risks. Investing in the conservation, sustainable use and restoration of biodiversity can help to address these risks, while providing jobs, business opportunities and other benefits to society.

> Discover

ENHANCE ENVIRONMENTAL HEALTH

Enhancing environmental health through better air quality, water and sanitation, waste management, along with efforts to safeguard biodiversity, will reduce the vulnerability of communities to pandemics and thus improve societal well-being and resilience.

> Discover

Speed the transition to a low-emissions economy

Through a green recovery, governments have the opportunity to unleash innovation, undertake wider reaching and fundamental restructuring of critical sectors, accelerate existing environmental plans, and make use of environmentally sustainable project pipelines. The current outlook for a period of relatively low oil prices also offers an ideal opportunity to scale up carbon pricing and reform fossil fuel subsidies. Delivering a green recovery is vital for tackling the urgent and interconnected challenges of climate change and biodiversity loss.

Initial analysis suggests that governments have so far concentrated their green measures in the energy and surface-transport sectors. But other sectors - such as industry, agriculture, forestry and waste management - are equally important for a green and resilient recovery.

An opportunity to transform the oil and gas sector

In the midst of the COVID-19 crisis, an increasing number of oil and gas companies have set out ambitious goals to transition to “net-zero” carbon emissions by 2050. What is driving these pledges, even at a time of severe financial stress for the sector? And what implications could they have for governments’ economic recovery measures and, ultimately, for the Paris Agreement ?

> Is the COVID-19 crisis spurring a transition to net-zero emissions in the oil and gas sector?

Green sectors offer prospects for job creation

Renewable energy is estimated to employ more people per unit of investment and energy than fossil fuel generation, and could potentially employ more than 40 million people by 2050. If the international community utilises its full renewable energy potential, energy sector employment could reach 100 million by 2050, up from around 58 million today.

> COVID-19 and low-carbon transition
> Investing in climate, investing in growth

Green sectors offer prospects for job creation

Sustainable infrastructure helps reduce emissions

Investments in infrastructure, notably major transport-related infrastructure, have major implications for the environment. Stimulus packages and investment programmes can ensure that infrastructure resources are aligned with longer-term goals on climate, biodiversity, water and waste management, and resource efficiency.

> Financing Climate Futures: Rethinking Infrastructure
> The challenges of greening urban mobility

Sustainable infrastructure helps reduce emissions

Track progress through pertinent, comparable and timely data

Monitoring the impact of recovery and stimulus measures on environmental outcomes through measurable, comparable and timely indicators is key to ensuring that the green recovery is well targeted and effective in its execution.

To contribute to this effort, the OECD has identified a list of 13 headline environmental indicators derived from various OECD databases and publications. These include: Carbon intensity; Renewable energy in the energy mix; Effective carbon rates; Fossil fuel support; Land cover change; Protected areas; Economic instruments relevant for biodiversity; Exposure to air pollution; Material productivity; Water stress; Research and Development; Environmentally related tax revenue; Environment Official Development Assistance.

See all data insights

Leverage finance to invest in the green recovery

Leveraging investment for infrastructure is a critical pillar of the low-carbon transition. Around USD 6.3 trillion of annual investment is needed until 2030 in energy, transport, water and telecommunications infrastructure, to sustain growth and increase well-being.

In recent years, trillions of dollars in capital have flowed into investments that are assessed using environmental, social and governance (ESG) criteria.

ESG criteria have helped raise awareness and strengthen corporate and investor commitments, but more work is urgently needed to ensure that ESG ratings are fit for purpose. Today’s ESG markets contain a huge variety – and at times divergence – in methodologies, performance metrics and product structures. There is still much to be done to make ESG investing fairer, more transparent and more efficient.

The COVID-19 pandemic highlights the urgent need to consider resilience in finance – not just in the financial system itself, but the role of capital and investors in making economic and social systems more dynamic and able to withstand external shocks. These include risks associated with climate change, which, beyond the pandemic, are perhaps the most pressing challenges to financial stability and resilience.

As we move towards the next phase of the COVID-19 crisis in many countries, governments have a unique chance for a green and inclusive recovery that they must seize.

SEE THE 25 ACTIONS

Browse all related resources

From air and water pollution to climate, agriculture and the circular economy, this collection focuses on all of the dimensions of the environment, environmental health and sustainability. It pulls together OECD analysis and data spanning a multitude of sectors and issues, many of which are being challenged in the context of the COVID-19 crisis.

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11/01/2021
Report
Making Better Policies for Food Systems
Food systems around the world face a triple challenge: providing food security and nutrition for a growing global population; supporting livelihoods for those working along the food supply chain; and contributing to environmental sustainability. Better policies hold tremendous promise for making progress in these domains. This report focuses on three questions. What has been the performance of food systems to date, and what role did policies play? How can policy makers design coherent policies across the triple challenge? And how can policy makers deal with frictions related to facts, interests, and values, which often complicate the task of achieving better policies? Better policies will require breaking down silos between agriculture, health, and environmental policies, and overcoming knowledge gaps, resistance from interest groups, and differing values. Robust, inclusive, evidence-based processes are thus essential to making better policies for food systems.
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09/01/2021
Report
Accelerating Climate Action
This report builds on the OECD Well-being Framework and applies a new perspective that analyses synergies and trade-offs between climate change mitigation and broader goals such as health, education, jobs, as well as wider environmental quality and the resources needed to sustain our livelihoods through time. This report takes an explicitly political economy approach to the low-emissions transitions needed across five economic sectors (electricity, heavy industry, residential, surface transport, and agriculture) that are responsible for more than 60% of global greenhouse gas emissions. Synergies between emissions reduction and broader well-being objectives, such as reduced air pollution and improved health, increase the incentives for early mitigation action. At the same time, the impact of climate policies on issues such as the affordability of energy and jobs need to be taken into account to counter growing economic and social inequalities within and between countries. The report argues that reframing climate policies using a well-being lens is necessary for making visible such synergies and trade-offs; allowing decision-makers to increase the former and anticipate, manage and minimise the latter. This requires us to rethink societal goals in terms of well-being, reframe our measures of progress and refocus policy-making accordingly.
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18/12/2020
Paper
Addressing the COVID-19 and climate crises
This paper provides decision-makers with a framework for prioritising different economic, social and environmental goals and analysing the options available to achieve them. To this end, it develops three stylised COVID-19 recovery pathways (“Rebound”, “Decoupling” and “Wider well-being”) that differ in the extent to which they encompass greenhouse gas (GHG) emission reductions and the integration of mitigation and wider well-being outcomes or, broadly equivalently, SDGs. A number of real-world examples of COVID-19 recovery measures in the surface transport and residential sectors were identified, and the paper maps these measures onto these three stylised pathways. The paper finds a wide divergence in the environmental and social impacts of COVID-19 recovery measures developed to date, with several countries putting in place measures that correspond to all three pathways. The nature and pace of economic recovery in different countries and in aggregate will have important implications for existing, updated and new Nationally Determined Contributions (NDCs) under the Paris Agreement, and the paper also highlights the possible impact of the COVID-19 recovery measures being put in place on NDCs– including on the ambition of both current and future NDCs. The paper concludes that it will be important for governments to improve their understanding of the impact of their recovery measures across multiple policy dimensions (economic, social, environmental) as well as across different time periods (short and long-term) and spatial scales.
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16/12/2020
Report
Blended Finance in the Least Developed Countries 2020
The least developed countries (LDCs) are the furthest from achieving the Sustainable Development Goals (SDGs). They are also likely to be hit the hardest by the COVID-19 crisis and badly need the additional private finance that blended finance can unlock. Yet evidence shows that too little private finance is mobilised for investment in LDCs. How can this be fixed?The Blended Finance in the Least Developed Countries 2020 report is the third edition and second joint UNCDF-OECD report. It builds on UNCDF research and transactional experience, OECD data and analysis on private finance mobilized by official development finance, and a series consultations with and contributions by blended finance experts, LDC governments, UN missions, donors, civil society and research institutions. The report provides an update on the deployment of blended finance in LDCs. It also analyses its potential role in helping those countries recover from the COVID-19 crisis, and provides an Action Agenda for unlocking capital for the achievement of the SDGs in LDCs, as called for in the 2030 Agenda for Sustainable Development and the Addis Ababa Action Agenda.
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11/12/2020
Report
Improving Transport Planning for Accessible Cities
Cities are places of opportunity. They provide not just jobs but a whole range of public, cultural, social and consumption amenities. Transport is what connects people to these opportunities and cities provide access with varying degrees of success – especially when it comes to modes of transport that favour a green transition. This report argues that building sustainable transport networks for accessible cities requires a holistic planning approach, a sound institutional framework, reliable sources of funding, strong governmental capacity, and should build on community engagement. Urban accessibility requires coherent allocation of responsibilities across levels of government to support strategic planning. The report proposes concrete actions that cities can take to adapt their institutional framework, to improve transport planning and ensure they have access to sustainable sources of funding to implement their plans.
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11/12/2020
Statement
The Paris Agreement 5 years on: Taking stock and looking forward
When world leaders gathered in Paris in 2015, they succeeded in agreeing a comprehensive, ambitious and universal global agreement on climate change. But temperatures are hitting record levels and many developing countries have been hit by devastating cyclones this year. We are sleepwalking into a catastrophe if we let climate change rise unchecked.
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10/12/2020
Report
OECD Review of Fisheries 2020
The OECD Review of Fisheries 2020 aims to support policy makers and sector stakeholders in their efforts to deliver sustainable and resilient fisheries that can provide jobs, food, and livelihoods for future generations. The Review updates and analyses the OECD fisheries support estimate (FSE) database, the most comprehensive, detailed, and consistent collection of country level data on governments support to fisheries. It also presents and analyses newly-assembled data on the health of fish stocks; on the management of key stocks of commercial interest; and on the governance of fisheries across OECD countries and emerging economies with large fishing sectors. The report sheds light on how governments are managing fisheries to minimise detrimental impacts on resources and ecosystems, eliminate illegal, unregulated and unreported (IUU) fishing, while increasing the socio-economic benefits from fishing. It suggests priorities for action both at the national level and for the international community.
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07/12/2020
Report
Non-exhaust Particulate Emissions from Road Transport
Non-exhaust emissions of particulate matter constitute a little-known but rising share of emissions from road traffic and have significant negative impacts on public health. This report synthesizes the current state of knowledge about the nature, causes, and consequences of non-exhaust particulate emissions. It also projects how particulate matter emissions from non-exhaust sources may evolve in future years and reflects on policy instrument mixes that can address this largely ignored environmental issue.
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02/12/2020
Blog article
Is the COVID-19 crisis spurring a transition to net-zero emissions in the oil and gas sector?
Almost all economic sectors have suffered due to the evolving COVID-19 crisis. For the oil and gas industry, already battered on one side by low prices due to an oil price war between Russia and Saudi Arabia, and on the other by the push to decarbonise the global economy, the crisis hit at an especially challenging time.Nevertheless, an increasing number of international oil and gas companies have set out seemingly ambitious goals to transition to “net-zero” carbon emissions by 2050.
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30/11/2020
Report
OECD Regions and Cities at a Glance 2020
Regions and Cities at a Glance 2020 provides a comprehensive assessment of how regions and cities across the OECD are progressing towards stronger, more sustainable and more resilient economies and societies. The publication provides a unique comparative picture in a number of aspects connected to economic development, health, well-being and net zero-carbon transition across regions and cities in OECD and selected non-OECD countries. In the light of the health crisis caused by the COVID-19 pandemic, the report analyses outcomes and drivers of social, economic and environmental resilience.This edition provides several new features. First, an extended set of health-related indicators, including excess mortality, morbidity rates, and air quality. Second, novel indicators on the potential of regions and cities to remote working, as well as on trade openness and access to digital infrastructure enrich the economic chapter. Third, the report offers a number of new climate-and environment-related indicators, including on sustainable electricity production and related carbon emissions. The report shows population trends in over nine thousands cities and metropolitan areas across the entire world. Finally, the last chapter presents new indicators on spending and revenues capacity of regional governments in OECD countries.
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18/11/2020
Report
Managing Environmental and Energy Transitions for Regions and Cities
This report offers guidance on how to prepare regions and cities for the transition towards a climate-neutral and circular economy by 2050 and is directed to all policymakers seeking to identify and implement concrete and ambitious transition pathways. It describes how cities, regions, and rural areas can manage the transition in a range of policy domains, including energy supply, conversion, and use, the transformation of mobility systems, and land use practices. It takes stock of discussions between academic and policy experts emanating from a series of high-level expert workshops organised in 2019 by the OECD and the European Commission. Bringing together frontier thinking and practical examples regarding the transition to a climate-neutral economy, the transition to a circular economy, the transition in cities, the transition in rural areas, and financing and scale-up of transition action, this report identifies cross-cutting lessons to support urban, regional, and rural decision makers in managing trade-offs and in promoting, facilitating and enabling environmental and energy transitions.
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29/10/2020
Blog article
COVID-19 and the climate crisis: Combining green budgeting and tax policy tools for a better recovery
Robust tax policy tools, in particular carbon pricing, can work ‘hand-in-hand’ with green stimulus to promote clean investment and spending decisions, and support a successful, long-term recovery, according to new OECD findings.
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26/10/2020
Paper
Greening regional trade agreements on investment
Many governments are increasingly recognising the need to ensure that trade and investment agreements reflect environmental concerns to help achieve overarching environmental goals and to increase their public acceptability. In particular, investment liberalisation and protection, as well as environmental sustainability are essential elements to consider in these agreements to foster economic integration and require coherent policy approaches.In this context, this report investigates possible approaches that can help ensure policy coherence between investment and environment related provisions in regional trade agreements (RTAs). As investment related articles appear not only in RTAs but more broadly in bilateral investment treaties (BITs) and in other international investment agreements (IIAs), the work extends to trade and investment agreements that encompass RTAs, BITs and other IIAs. The report highlights available practices to ensure that investment related provisions reaffirm the domestic environmental policy space.
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23/10/2020
Blog article
The case for sustainable ocean finance
The ocean underpins billions of livelihoods, is a vast reservoir of biodiversity and, through its role in regulating the climate, is even critical to the well-being of the planet itself. The ocean and coastal regions provide numerous and invaluable ecosystem services ranging from carbon storage, oxygen generation, protection from storms and of course food. But in this age of converging crises the ocean is increasingly vulnerable.
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09/10/2020
Policy response
Green budgeting and tax policy tools to support a green recovery
Recovery from the social and economic disruptions caused by the COVID-19 pandemic will require concerted policy action. As countries consider recovery packages, there are opportunities to prioritise green policy choices that help promote environmental objectives and speed up structural change towards the low-carbon transition, increasing society’s resilience to future shocks and reducing future risks. This policy brief focuses on practical ways in which countries can use green budgeting and tax policy tools to implement stimulus packages that support a green recovery, and the inter-linked role of both tax and spend measures in aligning stimulus programmes with decarbonisation objectives.
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07/10/2020
Paper
Reframing Financing and Investment for a Sustainable Ocean Economy
This paper sets out a new framing of the challenges and opportunities for scaling up financing and investment for a sustainable ocean economy. It examines the particular challenges associated with financing sustainable ocean activities across different sectors and explores promising financing instruments, including by identifying learnings from elsewhere in the green finance sphere.This paper contributes to the OECD horizontal ocean project. To support government efforts to transition to a more sustainable ocean economy, the OECD is mobilising expertise across multiple policy fronts, covering environmental, economic, financial and social dimensions. Working with both developed and developing countries, the OECD aims to ensure that all societies can harness the benefits of the ocean on a sustainable and inclusive basis.
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06/10/2020
Report
Developing Sustainable Finance Definitions and Taxonomies
A number of countries have created official definitions of sustainable finance as well as more comprehensive classification systems, referred to as sustainable finance taxonomies. This report maps sustainable finance definitions and taxonomies in five jurisdictions: the European Union, People’s Republic of China, Japan, France and the Netherlands. Taxonomies answer a need for greater certainty on the environmental sustainability of different types of investments. When appropriately designed, they can improve market clarity, bring confidence and assurance to investors, and facilitate the measurement and tracking of sustainable finance flows. The report lays out preliminary considerations for good design of taxonomies, which can support policy makers to develop and grow sustainable finance markets to help achieve environmental and sustainable development goals. It also identifies differences among the taxonomies in scope as well as commonalities. These commonalities could provide a basis for creating comparable frameworks that facilitate international investment while also reflecting differing national circumstances.
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06/10/2020
Report
Green Infrastructure in the Decade for Delivery
Building green is not only imperative to achieve global climate and development commitments in this “decade for delivery”, but will also be critical to sustain socio-economic development during the COVID-19 recovery. Private investment in particular is needed to bridge the infrastructure investment gap, given institutional investors’ large pools of long-term capital. After several years of efforts to upscale institutional investment in infrastructure, where does the level of investment stand today? This report provides a first-of-its-kind empirical assessment of investment in infrastructure by institutional investors domiciled in OECD and G20 countries, presenting a snapshot from February 2020. Based on a new detailed view of investment channels, financial instruments, sectoral allocations, regional preferences and trends, the report provides guidance on policy levers and priorities to scale-up institutional investment in green infrastructure.
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06/10/2020
Policy response
Making the green recovery work for jobs, income and growth
This Policy Brief focuses on how countries can create opportunities for a green and inclusive economic recovery from the COVID-19 pandemic. A green recovery will significantly enhance the resilience of economies and societies in the face of both the severe recession and accelerating environmental challenges. The Brief also undertakes a preliminary review of announced recovery and stimulus policies in OECD and Key Partner countries. While many countries are focusing on measures that can drive sustainability while boosting jobs, income and growth, a number of countries are proposing measures that support environmentally damaging activities. Measuring and evaluating the environmental impacts of recovery policies over time is crucial, and a set of indicators, covering a broad array of critical environmental dimensions, is proposed for this purpose.
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30/09/2020
Policy response
The impact of coronavirus (COVID-19) and the global oil price shock on the fiscal position of oil-exporting developing countries
The double blow of coronavirus (COVID-19) and the oil price shock is hitting oil-exporting developing countries particularly hard, at a time when the fossil fuel industry is facing a process of structural decline. Although some countries might weather the current crisis on the back of sovereign wealth funds or relatively low public debt levels, this will not be the case for the majority of fragile oil-exporting countries, many of which are resource dependent and were already grappling with high levels of debt and multifaceted economic and social fragility before the present crisis. Oil-exporting developing countries have experienced an increased reliance on short-term and expensive non-concessional private borrowing in recent years, a significant proportion of which is backed by oil collateral. Some countries may find themselves entering a spiral of unsustainable borrowing on the back of the current turmoil. A timely and coherent response is needed, encompassing both concessional lenders and private financiers, to create fiscal space, reduce the risks of unsustainable debt, corruption and illicit financial flows, and catalyse a transition to a cleaner and more sustainable future
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