OECD Contributions to the 2030 Agenda and Beyond

Shaping a Sustainable Future for All

Report

17 July 2024

3. Policies and investments for sustainable transformation and accelerated progress across the SDGs

Abstract

The UN Secretary General’s proposed Rescue Plan for the SDGs emphasises the need for targeted policies and investments to accelerate progress towards sustainable development. This requires advancing concrete, integrated, and targeted policy actions to eradicate poverty, reduce inequalities, and end the “war on nature” while promoting the rights of women and girls and empowering the most vulnerable. The Pact for the Future further highlights these elements, namely the investment in the socio-economic development of people aimed at strengthening social cohesion and building just, peaceful, and inclusive societies. To support the UN and its Member States in achieving this feat, this chapter provides policy insights and suggestions on how to close divides to leave no one behind and leverage environment-human wellbeing synergies for a truly sustainable and inclusive transformation. It also shines light on areas where policies can be harmonised across sustainability goals to maximise benefits, particularly in the context of escalating crises and the transition to net-zero.

Achieving sustainable development in its three dimensions – economic, social, and environmental – necessitates prioritizing policies and investments with multiplier effects across the three areas. This requires pursuing synergies and harmonising trade-offs among SDGs and their targets, between different sectoral policies, and between diverse actions at the local, regional, national, and international levels. This section illustrates policy areas with the highest potential to deliver on the SDGs, focusing on policy instruments and approaches for aligning actions with sustainable development. In line with the strategic vision set forth by the UN through the Secretary General’s Rescue Plan for the SDGs, this section focuses on priority areas spanning the different dimensions of sustainable development:

Closing divides to “Leave No One Behind”; and
Leveraging human-environment-well-being synergies.

3.1. Closing divides to Leave No One Behind

At the heart of the 2030 Agenda, the concept of “leaving no one behind” (LNOB) embodies a universal commitment from all United Nations Member States to ensure that everyone everywhere benefits from development and the full realisation of human rights without discrimination on the basis of sex, age, race, colour, language, religion, political or other opinions, national or social origin, property, birth, disability, or other status (United Nations System Chief Executives Board for Coordination, 2017[1]).

According to the World Inequality Report 2022, the richest 10% of the global population earns 52% of global income, whereas the poorest half of the population earns 8.5% of it. Global wealth inequalities are even more pronounced than income inequalities. The poorest half of the global population barely possess 2% of the total. In contrast, the richest 10% of the global population own 76% of all wealth. Such inequalities threaten long-term social and economic development and harm, not just those who are excluded, but also have the potential to undermine the social contract and put social cohesion at risk in many societies. However, observations across countries and over time suggest that high and rising inequality can be changed. In Europe, public investments in job creation, education and health financed through redistribution mechanisms in the tax system have lowered income inequality (Chancel, L., Piketty, T., Saez, E., Zucman, G. et al. World Inequality Report 2022, World Inequality Lab).

While strides have been made towards LNOB, countries still struggle to implement this commitment, with persistent forms of violence, discrimination, and exclusion continuing to leave individuals and communities marginalised and excluded. Income and wealth inequalities are compounded by overlapping and interconnected inequalities in health, nutrition, education, and many other dimensions. As highlighted by the UN Secretary General in his latest annual report on SDG progress, if current trends persist, in 2030 around 575 million people will be living in extreme poverty, nearly 2 billion people will have no access to clean cooking, and about 660 million people will be living without electricity (United Nations, 2023[2]). This underscores the urgency and scale of the task at hand.

Building on existing OECD work on policy areas critical to LNOB, this section presents an overview of practices for closing existing socioeconomic divides and addressing persistent inequalities in our societies. It also provides concrete strategies for aligning sectoral policies with sustainable development objectives, using examples. The 2024 OECD Development Co-operation Report puts forward further examples and policy solutions on how development co-operation can support low- and middle-income countries’ efforts to reduce poverty and inequalities. The section focuses on the following selected policy priority areas (OECD, 2018[3]):

Providing universal access to social protection and generating quality jobs for a just and equitable transition;
Addressing the double burden of informal and low-paying work;
Considering labour market impacts of the net-zero transition and how the costs and benefits of net-zero policies will be distributed across society;
Closing gender gaps;
Adopting a life-course approach to essential services, including education, to ensure access to vital services at all stages of life; and
Securing universal health coverage.

3.1.1. Providing universal access to social protection and generating good quality jobs for a just transition

Promoting social cohesion and greater well-being for all through social protection systems, which provide economic and other support to vulnerable individuals, is essential as countries navigate the megatrends of our time, including the green and digital transition and demographic change, and build resilience to economic shocks. Evidence shows that investing in social protection lowers poverty rates (ILO, 2021[4]) and promotes inclusive growth, for example when social assistance targets children and youth to improve their education outcomes (OECD, 2019[5]). Social protection also plays a critical role as part of the LNOB agenda to combat inequalities and poverty, achieve gender equality, and improve the social and economic inclusion of marginalised groups. Investing in social protection ensures a minimum level of social and economic well-being and inclusion. Social safety nets mitigate the risk of poverty and may disrupt the cycle of inter-generational poverty, supporting inclusive growth (OECD, 2019[5]).

In the context of the green transition, whole-of-government approaches to social protection, labour and climate policies are particularly important for achieving just transitions. Well-designed and functioning social protection systems can increase resilience and assist populations at greater risk of climate shocks, enhance adaptive capacities, improve employment, income and livelihood opportunities, and compensate for the losses caused by climate change and green measures. Active labour market policies can also help those displaced by climate shocks to transition towards new employment, including green jobs.

Importantly, people whose jobs depend on natural resources, or are highly linked to the environment, will be the most impacted by climate change-related disasters and extreme weather events. In Southeast Asia, this concerns no less than 100 million people, most of whom are low-paid workers, in the informal sector, and deprived of social protection and labour rights (OECD, 2024[6]). Social protection systems in developing countries need to be strengthened by a combination of social insurance and non-contributory schemes to mitigate the negative effects on people and workers affected by climate change-induced disasters and labour shifts from green transitions in specific sectors.

Social grievances can be a consequence of environmentally unsustainable economic models, but also a reason for unsustainable practices to persist. High levels of inequality are shown to not only decrease biodiversity conservation efforts (UNRISD, 2016[7]), but also increase individuals’ waste generation and water consumption, as shown in several OECD countries (Islam, 2015[8]). In the same vein, studies suggest that climate change impacts worsen inequality, as they fall more heavily on the poor than the rich, which results in a harmful cycle that is very difficult for the poor to escape (Nazrul Islam, 2017[9]).

Sociodemographic, economic, technological, and environmental changes will affect both the need for, and the financing of, social protection systems over the coming decades. Current economic challenges – including labour shortages in some countries and the cost-of-living crisis – are hastening the impacts of megatrends that had been expected for the medium-term. For instance, the cost-of-living crisis seen in many countries demonstrates how keenly energy price rises are felt by households and firms. It also underscores the need to account for the impact of higher energy prices as countries pursue climate change mitigation policies in the coming years.

Social protection systems help individuals and families manage labour-market risks and play a key stabilising role for the overall economy. Effective income support is particularly relevant in the current context of heightened economic uncertainty as well as the labour market restructuring that is likely to accompany the green and the digital transition.

Social protection systems are well prepared in some ways but will need to adapt in other respects (OECD, forthcoming[10]). In the case of OECD countries – who generally spend more on social protection and as such have relatively low poverty rates by global comparison1 (OECD, 2024[11]) – structural challenges still contribute to gaps in social protection. This is evidenced by the exclusion of groups such as informal and non-standard workers from access to social protection (OECD, 2023[12]), and the sometimes-poor delivery of social benefits and services among those who are eligible.

To provide adequate and sustainable access to social protection, the shape, size, and funding of social programmes will need to anticipate these challenges and adapt to them. To that end, many countries are exploring how to improve access to social protection. For instance, Belgium is extending its out-of-work benefits for self-employed workers (OECD, 2023[13]) and Italy has introduced, on an experimental basis, a new unemployment benefit for the previously uncovered group of professionals who are legally self-employed but economically dependent on one or very few clients (OECD, 2023[12]). Many governments have also made efforts to expand the coverage of social protection. During the last 15 years, countries in Latin America and the Caribbean have expanded the coverage of both contributory and non-contributory social protection schemes, but many informal workers remain‑ uncovered (OECD et al., 2022[14]). Countries in the region have also used targeted cash transfers, especially conditional cash transfers, to promote children’s enrolment in education (OECD et al., 2021[15]) (OECD, 2019[16]).

To improve access to benefits and make them more responsive to changes in circumstances for those attempting to claim benefits, the use of data is key. Many governments are collecting new and better data, analysing data in more sophisticated ways, and linking data sources. For example, Chile operates a social registry based in part on administrative data. The system automatically delivers some benefits and helps claimants identify and apply for benefits they are eligible for (OECD, forthcoming[17]). Automatic enrolment in social programmes – using personally-identified, linked administrative data that allows for the creation of large data sets – is a promising new tool for enabling people to use available benefits.

Governments must adapt social protection systems to better address the interconnections between social, economic, and environmental dynamics. This requires considering not only the consequences of the green transition on the labour market and people’s livelihoods, but also the role that social dynamics play in shaping the success of initiatives aimed at increasing economic productivity and environmental sustainability (OECD et al., 2022[18]; OECD, 2023[19]). For example, payments for environmental services can deliver both social protection and environmental benefits by encouraging a long-term change in behaviour to prevent future ecosystem degradation (Porras and Asquith, 2018[20]). Peru provides a good example of this. Between 2014 and 2018, the Peruvian Ministry of Environment and the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) developed conditional cash transfers – given on the basis that those who receive the funding adhere to certain program-stipulated conditions – to stimulate community protection of tropical forests in the Amazon region. To date, 188 indigenous communities have received aid (OECD et al., 2022[18]). As of 2020, in the past 15 years, countries in Latin America and the Caribbean have expanded the use of targeted cash transfers, especially conditional cash transfers, to promote sustainable development and tackle poverty and inequalities (OECD et al., 2020[21]).

Going forward, it will be necessary to strengthen social protection systems, not only by increasing coverage but also by ensuring the sustainable financing of social protection, making them more resilient to different types of shocks and to ensure that they have positive long-term effects while guaranteeing that they are properly funded. Many countries will need additional resources to achieve universal social protection coverage and avoid significant financing gaps in the future (ILO, OECD and ISSA, 2023[22]). Indeed, tight fiscal space in the current macro-economic context, especially in low- and middle-income countries, tends to preclude large-scale public spending on social protection programmes. There is a clear role for international co-operation to support expanding funding for social protection systems in low- and middle-income countries, both through direct support to governments or by promoting progressive and fair tax systems that enhance domestic resource mobilisation. Most countries expanded social protection during the Covid-19 pandemic, in line with the pattern observed over time that support for social protection increases following crises. For instance, providers nearly tripled the volume of their official development assistance (ODA) to social protection, signalling a recognition of the importance of investments in this policy area (forthcoming 2024 Development Co-operation Report). However, these investments must be sustained over time.

There is no one-size-fits-all approach for extending fiscal space for social protection. Some countries have achieved universal or near-universal coverage in different branches of social protection through a combination of non-contributory and contributory schemes and programmes. For example, some countries are scaling up efforts towards extending and securing social security financing by increasing contributory revenues. Taxation is another key channel used for mobilising resources to ensure universal social protection coverage, for example, revenues from environmental taxes, or dedicated efforts to fight illicit financial flows (ILO, OECD and ISSA, 2023[22]). Fossil fuel subsidy reform can also free up resources that can be directed towards vulnerable households, by strengthening social protection systems through cash transfers (forthcoming 2024 Development Co-operation Report).

Simultaneously, governments will need to consider the impact of fossil fuel phase-out on employment and livelihoods, particularly in contexts where informality – that is, institutions, workers, and activities operating outside of legal and regulatory systems – is high, and data may not be readily available. Traditional approaches to labour market analysis struggle to accommodate the large-scale informality prevalent across fossil fuel industries in many countries, particularly in coal mining. For instance, data on the average age of fossil fuel employees – a key factor in assessing the potential for early retirement schemes in just transition planning – can be hard to come by in many cases. Section 3.2.1 discusses the need to anticipate and address the distributional impacts of the transition to net-zero in more detail.

3.1.2. Breaking the vicious circle of informal employment and low-paying work

Most workers in the world are informally employed and mainly contribute to economic and social development through market and non-market activities that are largely unrecognised, unregulated, unprotected, and undervalued (OECD/ILO, 2019[23]). Despite commitments by many countries to create economies where workers are formally employed in secure and sustainable jobs, nearly 2 billion workers – representing close to 60% of the world’s employed population – currently hold informal jobs and the majority are poor (OECD, 2023[24]). Moreover, gains made toward the formalisation of jobs are often reverted by national, regional, and global crises, such as the COVID-19 pandemic (OECD, 2023[24]).

The 2024 OECD report “Breaking the Vicious Circles of Informal Employment and Low-Paying Work” investigates why informal employment is so persistent and highlights the elements that make it difficult for informal workers and their children to break free from informal employment. The report contends that alleviating the double burden of informal employment and low-paying work is critical and calls for policy solutions that go beyond the agenda to formalise work to embrace the goal of social justice, as the combination of low paying work and informality often make the mere formalisation of jobs unlikely to eliminate the vulnerability challenge facing the large majority of workers.

Most workers in developing and emerging economies carry this double burden of informal employment and low-paying work. Globally, informal workers make up nearly 60% of the workforce globally, and 90% in low-income countries. OECD data shows that informality often displays a two-tier structure (Figure 3.1). The lower tier is made up of workers with earnings below 50% of the median earnings of their country: they are the majority of the global informal workforce, at 54% on average, and up to 80% in some countries. The workers in the upper tier enjoy relatively higher earnings; they are also more skilled and productive.

Figure 3.1. Distribution of informal workers by size of labour earnings

Percentage of informal workers by earnings category

While all informal workers struggle with more socio-economic risks than workers in formal employment, those in the lower tier of informal employment, along with their household members, are particularly vulnerable. They have a heightened risk of household poverty (Figure 3.2), health problems, poverty in old age, and poorer educational outcomes for their children. This is exacerbated for women who tend to be concentrated in the most vulnerable forms of informal employment. In the context of low pay, the absence of adequate social protection, and fewer opportunities to better their existing knowledge and learn new skillsets, mean informal workers often lack the means to lessen these risks independently.

Figure 3.2. Household poverty risk increases with household’s degree of informality

Distribution of people by the poverty and informality status of their households

Currently, opportunities to transition between informal and formal employment remain limited, and the benefits of formalisation at times remain insufficient for some workers in the lower tiers. When informal workers change their employment status, they are most likely to move between informal jobs and unemployment. Workers with the highest chances of accessing formal employment are those living in urban areas and the highly educated.

When they do occur, transitions from informal to formal jobs do not guarantee equal income improvements for all workers. Switching to formal employment has the greatest potential to improve the incomes of those workers who are already high earners – in the upper tier of informal employment – but not of the poorest workers in the lower tier. This may be exacerbated in some countries not only due to generally low pay in some occupations, but also due to the absence of a minimum wage. In contrast, transitions to informal employment generally worsen earnings, and in some settings, increase the likelihood of slipping into poverty.

The difficulty of acquiring and updating skills constitutes another significant challenge for workers in the informal economy. Informal workers have few opportunities to upgrade their skills and transition to formal jobs. Close to 45% of informal workers have at best a primary level of education, compared to 7% of those in formal employment, and will struggle to access higher levels of education even when encouraged. Moreover, globally, 94% of workers with no education and 85% of workers with only a primary education are informally employed.

Informal workers are also less likely to benefit from training and skills programmes provided through public labour market programmes. For example, in Indonesia, 100% of such labour market beneficiaries are formal workers and in Chile, Ghana, Peru, and Tanzania, the share is around 90% (OECD, 2021[25]). In Niger, state-provided labour market programmes are provided equally to formal and informal workers. However, as there is a larger share of informal workers than formal workers in the economy, more training needs to be provided to informal workers in order to attain equity, rather than equality.

In general, economies with high levels of informal employment display sizeable mismatches in skillsets between informal and formal workers. Because employers offering formal work generally look for skills that informal workers either do not have or cannot prove having, and because these workers struggle to find opportunities to gain new skills, informal and low-paid employment persists.

Moreover, children in households where all family members are informally employed have a lower chance of securing a formal job as they grow up. This is because their school attendance, from primary level onwards, is lower than that of children with formally working parents. This is often due to the fact that less financial resources and parental time are devoted to their education and their school-to-work transitions are longer and more uncertain.

The vicious circle of informality, especially for workers in the lower tier and for their children, can be broken by extending social protection coverage to all workers and their household members.

Extending universal social protection to informal economy workers may be possible, via a combination of contributory and non-contributory schemes based on a granular analysis of the circumstances of different groups of workers, the risks they face, and their contributory capacities. Funding this extension of social protection may require the mobilisation of additional revenues, particularly where governments’ fiscal positions are not strong (see section 4.3.1 for more information).

The two-tier nature of informal employment requires differentiated policy actions to ease transitions between these tiers and towards formal jobs. Skills development policies are one solution. For informal workers, it is critical to create more concrete opportunities of employer-sponsored training and public skills development programmes tailored to their needs. It is also necessary to find ways to formally recognise the skills they acquire through informal work. To improve the skills of children and thus the future work force, governments should continue investing in accessible, equitable, quality education; prevent school dropouts; and ease school-to-work transitions.

In addition, policy makers should recognise that certain workers will never be able to move out of low-paid, informal jobs. Where such jobs help sustain livelihoods and may therefore be considered essential and socially desirable, the priority should be to alleviate the double burden of informal employment and low-paid work through remuneration policies beyond standard wages that address inequalities; effective minimum wages; and measures to improve the bargaining power of low-paid informal workers.

For informal workers in the upper tier, additional measures could be considered, such as ensuring adequate coverage by labour laws, social security and tax regulations, as well as enforcing compliance with these regulations by workers and by employers.

In recent years, the social economy has garnered considerable attention as a promising tool to offer innovative solutions for addressing informality. The OECD Recommendation of the Council on the Social and Solidarity Economy and Social Innovation (OECD, 2022[26]) defines the social economy as a set of organisations including associations, co-operatives, mutual organisations and foundations that are owned by their members and driven by values of solidarity, the primacy of people over capital, and democratic and participatory governance.

OECD work has shown that the social economy, in particular co-operatives, could help tackle labour informality as long as they do not deviate from their primary purpose. Similarly, the International Labour Organization’s (ILO) “Transition from the Informal to the Formal Economy Recommendation” (ILO, 2015[27]), adopted in 2015, formally acknowledged co-operatives as a form of entrepreneurship which can contribute to the transition from the informal to the formal economy.

Depending on the local context, co-operatives are often easier to set up due to lower entry barriers and regulatory burdens. Moreover, they also deliver opportunities for training (which are typically embodied in their mission) and access to social security safety nets. In turn, these activities provide avenues for growth, financing, new markets, business support services, better working conditions, and better profits and pay.

In some countries, co-operatives have also proven to be successful tools for informal workers to organise and formalise their activity or sector. For example, this has been observed in the recycling sector in countries such as Argentina, Brazil, India, and South Africa.

However, due to the risk of corruption, governments must work with the co-operative sector to ensure it fulfils its primary purpose and is not diverted to evade worker’s rights. Co-operatives must also be supervised to protect them and their membership from abuses such as the fraudulent misuse of co-operative funds; the misuse of the name and identity of co-operatives for non-cooperative activities or simply to attract governmental funding; or as a cover for business activity that is on the boundaries of legitimacy. An important measure could be to collect data and information to assess if/how co-operatives contribute to the formalisation of work, in conjunction with compliance efforts.

Tackling the issue of informal and low-paying work is also directly linked to the environmental pillar of the sustainable development agenda. Informal work is especially high in sectors with a high intensity of greenhouse gas (GHG) emissions. In Latin America and the Caribbean (LAC), for instance, almost four out of ten workers in mining, manufacturing, and transport services are informal and in agriculture, seven out of ten (OECD et al., 2023[28]).

This shows that, in the context of the green transition, in segmented labour markets with pervasive informality, induced structural change, green or otherwise, should be accompanied by active labour market policies, including clear communication campaigns and skills training. Given the high levels of informality, self-employment and entrepreneurship programmes could prove useful if they include technical services, such as counselling, training and assistance with business planning, and direct financial support for the newly created business (OECD et al., 2022[14]).

Therefore, strategies to reduce informality must also consider the interconnections between economic, social, and sustainable development objectives. In line with this, the circular economy – that is, a model of production and consumption that aims to reduce waste through the strategic reuse of materials – could help reduce informality in the waste management sector in LAC. OECD work suggests that if LAC’s waste and recycling sector were to develop into a key sector with a municipal waste recycling rate equivalent to that of Germany, it could contribute to a green economic revival: almost 450 000 stable jobs would be created, and the region’s GDP would increase by 0.35% (OECD et al., 2022[14]).

3.1.3. Closing gender gaps

Despite progress, gender equality remains a distant reality in every country. Under-representation of women and girls in promising educational fields, disproportionate time spent on unpaid and domestic care, lower employment rates, fewer paid working hours per week, substantial labour market segregation, and persistent glass ceilings continue to hinder women’s economic opportunities and perpetuate gender wage gaps. Women also face barriers to entrepreneurship and self-employment. All these factors result in substantial gender gaps in lifetime earnings and pension income, as well as missed opportunities for job creation, growth, and innovation. Moreover, women’s underrepresentation in politics and government leadership might diminish policy support for gender equality. At the same time, the stereotypes associated with masculinity can also have negative consequences for boys, with higher school drop-out rates, for example (OECD, 2023[29]).

Gender equality is a moral, social and economic imperative. Across OECD countries, for example, closing gender gaps in labour force participation and working hours could add 0.23 percentage points per year to the GDP per capita growth, resulting in a 9.2% boost to GDP per capita by 2060. Neglecting gender equality threatens world’s collective future prosperity (OECD, 2023[30]).

In particular, women and girls have made great advances in education over the past decades with narrowing or even reversing gender gaps in different educational levels (primary, secondary, and tertiary) across the countries (OECD, 2024[31]; 2023[32]; 2021[33]; Van Bavel, Schwartz and Esteve, 2018[34]). In OECD countries, young women now have a substantially higher educational attainment than young men (OECD, 2022[35]). Boys are lagging behind girls in foundational skills like reading and science, which undermines school engagement and can contribute to their higher likelihood of leaving school early (OECD, n.d.[36]). Moreover, over the past years and decades, countries have made important strides to make teachers more gender aware, teaching materials more gender neutral, and more girls motivated to study Science, Technology, Engineering and Mathematics (STEM) subjects. As examples of initiatives supporting girls and women in STEM, a pillar of the Chilean “National policy for gender equality in STEM” focuses on eradicating gender stereotypes in education from an early age, while in 2022 Ireland published “Recommendations on Gender Balance in STEM Education”, and Luxembourg launched the “Gender4STEM Teaching Assistant” self-assessment tool for teachers to evaluate their gendered education practices (OECD, 2023[30]). However, gender stereotypes still contribute to major gender segregation in fields of study and career expectations, with young women still more likely than young men to pursue studies in fields relating to education, health, and welfare, and less likely to choose engineering, mathematics, or computing. Bridging the gender gap in education requires tackling both boys' disengagement and persistent segregation in educational choices.

Similarly, labour market outcomes of men and women have converged over the past decades. Nevertheless, working-age women continue to fare worse than men in many labour market indicators. For instance, women in OECD countries are on average 10 percentage points less likely to be employed than men and still spend about five hours less per week in paid work. Gender differences in employment also culminate in a substantial gender pay gap, with women earning about 11.6% less than men in 2022 on average across the OECD, measured at median earnings for full-time workers. Women are still overrepresented in human- and care-centred occupations – typically characterised by lower pay compared to STEM occupations. For example, the teaching profession has witnessed a growing feminisation. Occupations predominantly filled by women may receive lower remuneration because they are undervalued, not because they are inherently less valuable (Bettio and Verashchagina, 2009[37]; OECD, 2023[38]).

Policy solutions have tried to support a more equal distribution of paid and unpaid work (OECD, 2024[39]). Many countries have recently introduced or expanded fathers’ individual entitlements to paternity and parental leave, increasing the incentive for fathers’ leave taking and contributing to erode the stubborn gender norms around childcare and unpaid work. Key changes have been spurred by efforts of European Union (EU) countries to align with the EU directive on work-life balance (Directive 2019/1158/EU): some countries newly introduced paid paternity leave (e.g., Austria or Czechia); others increased the length of paid paternity leave entitlements (e.g., Italy and Spain); and others introduced non-transferable rights of leave for fathers (e.g., Estonia or Greece). Other OECD countries have also adapted their parental leave systems to encourage take-up among men.

Countries have also invested in offering better childcare options, including efforts to make early childhood education and care (ECEC) more affordable for low-income household. For instance, Estonia limits childcare fees to 20% of the monthly minimum wage, while Germany exempts low-income and other vulnerable households from paying ECEC fees. In Norway, childcare fees are capped at a maximum of 6% of gross household income, and the government introduced a right to 20 hours of free childcare for lower-earning parents. Between 2021 and 2026, Canada is rolling out a large-scale ECEC reform towards a country-wide Early Learning and Childcare System which, among others, includes a guarantee for a childcare fee of maximum CAD 10 a day. Other measures adopted by countries also encompass a better offer to flexible work opportunities, among others (OECD, 2023[30]).

Countries have proposed multiple solutions to close the gender pay gap, with promising developments relating to pay transparency tools to support equal pay (OECD, 2023[40]; 2021[41]). As of 2022, more than half of all OECD countries mandated private sector firms comply with gender-disaggregated pay reporting requirements or gender pay audits for private sector companies. Within this group, ten OECD countries have implemented comprehensive equal pay auditing processes that apply to a pre-defined set of employers (Canada – under the Pay Equity Act, Finland, France, Iceland, Ireland, Norway, Portugal, Spain, Sweden and Switzerland). Some countries apply more limited tools, such as requiring analysis of gender pay gaps in the process of labour inspections (Costa Rica, Czechia, Greece and Türkiye), or requiring companies to report gender statistics on outcomes other than pay. At the same time, pay transparency tools must be part of a comprehensive effort to combat gender gaps in pay – simply revealing the presence of a pay gap will do little to mitigate pay inequity that has built up over years of educational and workplace choices (OECD, 2023[40]; 2021[41]).

Next, the gender gap in entrepreneurship is persistent and costs economies invaluable ideas, innovation, and jobs. The recent OECD-EU Missing Entrepreneurs 2023 report shows that there would be an additional 24.8 million women entrepreneurs in the OECD if women participated in early-stage entrepreneurship at the same rate as 30–49-year-old men. In addition, several G7 countries have recently performed their own estimations of this cost. Calculations from Canada in 2017 suggest that closing the gender gap in entrepreneurship by 2026 could add up to CAD 150 billion (USD 113 billion) to the Canadian economy, which is 6% more growth than what was forecasted for the 2017-26 period (Government of Canada, 2022[42]). Similar estimates in the United Kingdom (UK) suggest that GBP 250 billion (USD 325 billion) would have been added to the UK’s economy in 2017, equivalent to 12% of GDP, if women started and scaled businesses at the same rate as men (Alison Rose, 2019[43]).

The challenges that women identify in starting a business include discouraging social and cultural attitudes; lower levels of entrepreneurship skills; greater difficulty in accessing start-up financing; smaller and less effective entrepreneurial networks; and policy frameworks that discourage women’s entrepreneurship. Traditional instruments such as training and grants are used to address these barriers, but these approaches should be expanded to ensure full reach into the population. Entrepreneurs are strongly influenced by role models and social context. It is therefore important to promote women entrepreneurs as role models and ensure that the education system is gender-neutral and does not discourage women from going into STEM fields. Finally, more targeted actions can be taken to ensure that family policies, social policies, and tax policies do not discriminate against entrepreneurship by women. A good practice example is the Women Entrepreneurship Strategy in Canada, which was announced as an initial CAD 2 billion investment and “whole of government” strategy to help increase women entrepreneurs’ access to financing, networks, and expert support. It now represents nearly CAD 7 billion in investments and commitments across 20 federal departments, agencies, and crown corporations owned by federal or provincial governments in Canada. The strategy is built around three pillars: access to capital; strengthening the women entrepreneurship ecosystem; and enhancing knowledge and data. In fiscal year 2022-23, federal programmes and services for women entrepreneurs were accessed over 74 600 times.

There is also gender imbalance in decision-making positions. In the private sector, on average across OECD countries, only 34% of managers were women in 2022. Worldwide, on average, the share of managers who are women drops to 25% (OECD Development Centre/OECD, 2023[44]). In publicly-listed companies and top levels of management, evidence of the leaky pipeline – the slowly decreasing share of women as one climbs the career ladder – and the glass ceiling – an invisible barrier to women’s advancement – is even starker (OECD, 2023[38]; 2023[30]). An increasingly widespread use of gender quotas and targets for corporate boards as well as complementary initiatives have sustained an increase of women’s presence on the boards of the largest publicly listed companies from around 21% in 2016 to 29.6% in 2022 (Denis, 2022[45]). Similarly, in public life, despite being overrepresented in public sector employment, in 2021 women only covered 37% of senior management positions in public sector employment on average across OECD countries (OECD, 2021[46]). Globally, at the rate of progress recorded between 2012 and 2022, gender parity in parliaments would not be achieved before 2062 (OECD, 2023[47]). Beyond policies and instruments such as legislated gender quota that can help achieve a meaningful representation of women at different levels of governance, bold action from political parties is required to promote female candidates and encourage women to run for elections.

At the heart of these persisting gender gaps and inequalities lie discriminatory social institutions – formal and informal laws, social norms, and practices that affect girls from an early age and have lasting adverse consequences for women’s sexual and reproductive health and rights, economic empowerment, political representation, and decision-making power, and even safety. Numerous countries have reported that violence against women is a priority policy issue, followed by the gender wage gap, women’s underrepresentation in politics and business, and finally gender stereotypes (OECD, 2022[48]; 2023[30]). Moreover, discriminatory laws hamper women’s marriage rights, their status within the household, their ability to seek and obtain a divorce, and their opportunities to inherit from their parents or spouse on equal grounds with men. In 2023, the fifth edition of OECD’s Social Institutions and Gender Index (SIGI) showed that over 40% of women and girls live in countries where the level of discrimination in social institutions is estimated to be high or very high (OECD, 2023[47]). Recent evidence paints a mixed picture of progress and setbacks in transforming discriminatory social norms into gender-equitable ones. Transforming social norms fundamentally takes time as they relate to the core beliefs of individuals. Based on 37 countries that account for 50% of the world’s adult population, data show that attitudes towards intimate partner violence and women’s leadership in both economic and political spheres have evolved positively between 2014 and 2022 (OECD, 2023[47]). However, over the same period, social norms related to women’s equal rights and ability to work have worsened. For example, in 2022, 35% of this population believed that when a woman earns more than her husband, it causes problems, a 6 percentage point increase from 2014. Similarly, in 2022, 45% of the population think men should have more rights to jobs when they are scarce, a 4 percentage point increase from 2014 (OECD, 2023[47]). A limited understanding of social norms and masculinities hinders efforts to engage men and boys, despite their importance for both women's empowerment and addressing areas where men fall behind.

Further, the impacts of climate change, environmental degradation and biodiversity loss reinforce gender inequality by causing and exacerbating food insecurity, poverty, diseases, and displacement – scenarios that amplify harmful power dynamics and disproportionately and negatively affect women and girls. Addressing the four challenges jointly can have a positive multiplier effect, but efforts undertaken in isolation can undermine each other. Figure 3.3 below provides a conceptual diagram to define this intersection.

Figure 3.3. The gender-climate-biodiversity/environment intersection

ODA for gender equality

Moreover, there is a need to increase the quantity and quality of financial resources available for gender equality and the empowerment of all women and girls globally and especially in lower-income countries. DAC members’ ODA remains an essential external financing resource in this regard, especially for low-income and fragile countries. However, in recent years, there has been a stalling, and potentially downward, trend in ODA for gender equality (OECD, 2024[50]) see Figure 3.4. In addition, support to programmes with gender equality and the empowerment of women and girls as the main objective made up only 4% of total ODA in 2021-22. The vast majority was committed for programmes that integrate gender equality as one significant policy objective amongst others (USD 58.3 billion or 39%). This recent OECD data indicates that more than half of ODA does not take gender equality into account (OECD, 2024[51]).

This is not only a missed opportunity to support achievement of the SDGs and gender equality globally, but also risks perpetuating gender stereotypes. All development programmes have an impact on gender equality, whether intended or not. A helpful tool for thinking about transformative change, and for identifying what type of impact a development intervention may have, is the gender equality continuum, as shown below (Figure 3.5).

A comprehensive approach to increasing financing for gender equality includes:

Integrating gender equality considerations into development programming and policy frameworks;
Increasing data on areas of need through evaluation; and
Establishing internal organisational systems to ensure gender-equitable delivery of financing in all development and humanitarian assistance.

Development finance that contributes to progress on gender equality also requires supportive policy frameworks and leadership. Over the past 15 years, DAC members have refined their policy approach to gender equality, moving towards a twin-track approach, which integrates both women’s and men’s concerns into development programmes and policies. Whole-of-government approaches are also important, and some DAC members have conveyed gender equality advocacy through different channels of foreign policy and diplomacy and by implementing their own feminist foreign policy.

In line with these efforts, on 14 May 2024, DAC members adopted the DAC Recommendation on Gender Equality and the Empowerment of All Women and Girls in Development Co-operation and Humanitarian Assistance (OECD, 2024[53]). This legal instrument is a significant milestone in advancing gender equality and will enhance work on transformative approaches to addressing root causes of gender inequalities. The Gender Equality and the Empowerment of Women and Girls: DAC Guidance for Development Partners complements the DAC Recommendation and serves as a practical handbook for development partners supporting global ambitions to promote gender equality and the empowerment of all women and girls (OECD, 2022[54]).

Generally, DAC members are increasingly committed to implementing “transformative” change in their policies as the route to gender equality and the empowerment of women and girls (Rao and Sandler, 2021[55]; ATVET for Women project, 2019[56]). Sustained change requires transforming unequal power relations and the harmful structures and norms – both visible and invisible – that uphold them, in addition to addressing the root causes of inequalities (Hillenbrand et al., 2015[57]). The most successful and transformative results for gender equality will involve shifting patriarchal practices, norms and values deeply held by women and men alike (OECD, 2022[52]). Recently, there has also been an increased interest in finance other than ODA that addresses gender equality. Capital markets – encompassing financial markets where investments such as long-term debt or equity-backed securities are bought and sold – are crucial sources of long-term funding to help close the SDG financing gaps and mobilise capital for sustainable development (OECD, 2022[52]). Development partners can also increase funding by targeting their “other” official flows towards gender equality, including financing that is typically provided through development finance institutions.

Other possibilities for additional funding include:

Partnering financially with private actors, such as commercial or philanthropist organisations, at all levels;
Setting up blended finance vehicles with development banks and development finance institutions (DFIs);
Providing guidance and financial incentives for financial actors to work on gender equality; and
Providing technical support on gender equality for actors in partner countries (OECD, 2022[52]).

Currently, most development co-operation strategies adopted by development co-operation providers do not address gender equality and environment challenges in an interconnected manner (OECD, 2023[49]). Lack of intersectional approaches to climate change, environmental degradation, biodiversity loss, and gender inequality are concerning, especially given the sizeable and continuous financial investments in the four areas.

By setting quantitative targets for their climate- or biodiversity-related development finance to gender equality, and vice versa, providers of development co-operation would be progressing towards a more coherent, systematic, and effective response to this intersection. In doing so, they should ensure their approaches and programming efforts avoid gender- and green-washing2 (OECD, 2023[49]).

3.1.4. Adopting a life-course approach to essential services and tackling the global crisis in education

Education is one of the most critical enablers of progress across the full spectrum of SDGs. However, the rising number of crises around the world has impacted progress and investment in education and lifelong learning globally. To ensure an efficient long-term investment in humanity’s future, an urgent and profound change of course in global educational development is needed. Quality education holds the key to fostering knowledge, skills, and attitudes that contribute to peaceful, inclusive and sustainable futures of humanity and the planet and is crucial to protecting and supporting youth and future generations (see further in Chapter 6 on empowering youth and future generations for a better tomorrow).

The right to education must begin with laying a strong foundation of comprehensive early childhood care and instruction, followed by foundational learning, as part of inclusive lifelong learning. In today’s increasingly digital world, this also means implementing three “keys” of digital learning – connectivity, capacities, and content – in education. Universal access to broadband connectivity is essential, then, and access to digital technologies must increase.

While all learners must be given the tools to achieve their full potential, it is vital that development initiatives prioritize the most vulnerable, including those affected by crises and emergencies. Strong education systems with sufficient resources have the best chance to serve the marginalised and underprivileged. However, low- and lower-middle-income countries are facing an annual financing gap of $97 billion to achieve their national education targets while various global emergencies are also squeezing the level of development aid.

Strengthening the link and enhancing coherence between education sector planning and budgeting can improve service delivery for millions of learners worldwide while also helping to reduce gender disparities. Countries can also free more resources for education via strategies such as tax reforms, innovative financing, debt relief, and public-private cooperation.

To ensure more equal access to quality education, policymakers must also consider that the quality of school infrastructure varies significantly across and within countries. Globally in 2020, about a quarter of primary schools did not have access to basic services such as electricity, drinking water, and sanitation. Lack of physical infrastructure and poor-quality infrastructure tend to be higher in schools located in villages as compared to schools located in cities. Rural-urban gaps in digital infrastructure for learning are also large across G20 countries. The rural-urban gaps are particularly large in LAC countries, where geographical gaps might reflect, among other factors, differences in the prioritisation of investments in connecting rural schools (OECD, 2022[58]).

A place-based approach to investment in education is therefore key to bridging the rural-urban gaps in educational outcomes. Rural areas face higher costs per student than urban areas, which might limit their capacity to invest in education infrastructure even more (OECD/EC-JRC, 2021[59]). In OECD countries, subnational governments, and in particular local governments, have a relatively large share of responsibility for financing education expenditure, accounting for 47% of total public expenditure on education on an unweighted average in 2021. (OECD, 2022[58]; OECD, 2023[60]). Education is the primary area of subnational government spending as a share of GDP accounting for 2.2% on unweighted global average, i.e. 20.2% of subnational expenditure (OECD, 2022[61]) Regional and local governments, in close coordination with national governments, can play a pivotal role in ensuring effective investment in education. Moreover, by engaging a wide cross-section of society including the youth, especially those from historically marginalized groups, in policy and decision-making, they can lead the charge to a sustainable future, crafting solutions that resonate with their communities in a way that is inclusive, impactful, and deeply rooted in local needs.

3.1.5. Achieving and sustaining Universal Health Coverage

Universal Health Coverage (UHC) – which aims to ensure all people have access to the quality health services they need without incurring financial hardship – is critical to the SDG vision of LNOB, yet the world is off track on this SDG indicator (SDG target 3.8). The latest UHC Global Monitoring Report shows that improvements in health service coverage have stagnated since 2015, and the share of the population facing catastrophic levels of out-of-pocket spending has increased. Indeed, over 1 billion people incurred catastrophic spending – that is, out-of-pocket payments greater than 40% of their household capacity to pay for health care – in 2019, up from 558 million people in 2000 (WHO and World Bank, 2023[62]). Since then, the pandemic has added pressure to already stretched health systems, and a difficult global economic context is hindering an expansion of the resources required to fund UHC.

But inaction is not an option. Without quality health services, too many people will fall sick and not recover, and without a healthy population, sustainable development is impossible. UHC is not just a domestic issue, as countries without universal systems are more susceptible to health shocks. As COVID-19 has shown, a health shock that starts as a domestic crisis can quickly become a major international crisis. Strengthening health system resilience is therefore critical to achieving and sustaining UHC (OECD, 2023[63]).

Achieving and sustaining UHC requires action at both the national and international levels. More funds are needed for priority areas, including to prepare for and respond to regional and global shocks like those caused by the Covid-19 pandemic and to strengthen national health systems. Many countries could increase domestic spending on health by expanding prepayment mechanisms – whether through direct government funding and/or compulsory health insurance schemes – and better leveraging health taxes (notably on tobacco and alcohol). However, capacity constraints and increasing debt distress often hamper countries’ efforts to increase domestic spending on health. Tackling these challenges requires coordinated action and budgeting across ministries of finance and health (OECD, 2024[64]).

At the same time, development assistance and other sources of international finance can play an important role in ensuring the poorest and most vulnerable are not left behind. In addition, these external financing flows can also provide support for the production of global public goods (GPGs) for health – such as surveillance efforts, rapid access to new vaccines and treatments, and coordinated emergency responses – which without intervention would by their nature be underprovided. Finally, dialogue at the international level can play a critical role in improving global policy coherence.

3.2. Leveraging synergies between environmental and social policy objectives

This section provides analysis and strategies for capitalising on the complementarities between environmental and human well-being to foster coherent and effective implementation of the SDGs. In particular, the section addresses:

Strengthening domestic enabling conditions and the credibility of transition finance;
Addressing the labour and distributional impacts of climate policies from a well-being perspective;
Accelerating access to clean energy and protecting biodiversity and natural resources;
Analysing interlinkages between change mitigation and adaptation;
Securing sanitation, water, and food security; and
Reducing disaster risks and improving disaster response.

3.2.1. Strengthening domestic enabling conditions and the credibility of transition finance

Transition finance is aimed at the decarbonisation of high-emitting industries activities, where zero- or near-zero emission substitutes are not yet fully feasible, but where entities can reasonably be expected to reach net zero in the future, based on a long-term, credible climate transition plan.

The concept of transition finance has been rapidly gaining traction in recent years as existing green and sustainable finance approaches were perceived as being binary, static, and too narrow to enable a global whole-of-economy net-zero transition. However, as there is no common agreement across jurisdictions as to what should qualify as a “transition investment”, transition finance has been subject to greenwashing criticisms. In response to this, the OECD Guidance on Transition Finance (OECD, 2022[65]) makes the case that for transition finance approaches and related financial instruments to be robust, they must be based on credible transition plans.

Given that transition finance focuses on supporting high-emitting sectors where low-carbon technologies might not always be fully feasible, carbon lock-in is an important risk associated with these investments. Carbon lock-in occurs when fossil fuel infrastructure or assets (existing or new) continue to be used, despite the possibility of substituting them with low-emission alternatives, thereby delaying or preventing the transition to such alternatives. The OECD report on Mechanisms to prevent carbon lock-in in transition finance (OECD, 2023[66]) presents key findings and good practices to support policymakers in developing comprehensive and credible transition finance definitions and frameworks, as well as standards for relevant financial instruments.

The Coal Transition Accelerator

To achieve net zero emissions by 2050 globally, in line with the temperature target of the Paris Agreement, the world needs to transition away from fossil fuels. Transitioning away from using coal for energy, including the associated mining, processing, and distribution activities, will need to be a key objective of those efforts.3

Today’s existing coal plants and industries will “lock in” over 300 gigatonnes of cumulative emissions by 2050, if no additional action is taken. This amount corresponds to more CO₂ than the emissions to date of all coal plants that have operated historically and would push the world well beyond the temperature goal of the Paris Agreement (IEA, 2024[67]), (IEA, 2022[68]). Moreover, emissions from coal-fired power only continue to rise, while governments increase their fossil fuel subsidies (OECD et al., Forthcoming[69]). According to the IEA’s 2023 coal analysis, global coal consumption continued to grow and hit new record levels in 2023 (IEA, 2023[70]).

More concerted private sector action will be essential to ensure a just and managed energy transition away from coal. Private finance will especially need to play a key role given constraints on public budgets, especially in emerging markets and developing economies. The IEA estimates that half of investment needed in developing countries (excluding China) until 2030 to move away from coal, by retiring plants early and replacing capacity with renewable and clean energy, will have to come from the private sector.

Most young coal plants (<10 years, and likely to remain in place until after 2050 unless decommissioned early) are today located in emerging market and developing economies. In the IEA’s Announced Pledges scenario, by 2030, around 20 gigawatts of coal power plants will need to be retired before they reach 30 years of life. In many cases, the large amounts of capital invested in such plants cannot be recovered unless innovative financing mechanisms accompany early retirement – for example by refinancing and restructuring debt and shortening payback periods (IEA, 2024[67]).

In this context, at COP 28, the Coal Transition Accelerator initiative (Présidence de la République française - Service de presse, 2023[71]) was launched by France and the US, with high-level support from Canada, EU, Indonesia, Malaysia, Senegal, UK, and Vietnam. One of the three pillars of the initiative gives the OECD, with the support of the IEA, the mandate to establish a “gold standard” for financial institutions on financing the transition away from coal.

Guidance for financial institutions on financing the transition away from coal can build on a significant body of existing OECD work in the area of transition finance, climate alignment of finance, Responsible Business Conduct, and corporate governance. Key reference frameworks for transitioning away from coal include the OECD “Guidelines for Multinational Enterprises on Responsible Business Conduct” and supporting due diligence guidance for the financial sector and the OECD “Guidance on Transition Finance”. They can provide the foundation for more detailed guidance to the steps to be taken by financial institutions to support the transition away from coal. Further recommendations for financial institutions on financing the transition away from coal (as well as oil and gas) are set out in the OECD’s Equitable Framework and Finance for Extractive-based Countries in Transition (EFFECT) (OECD, 2022[72]).

3.2.2. Addressing the labour market and distributional impacts of climate policies from a well-being perspective

The transition to net-zero emissions will have considerable effects on global labour markets. While the precise estimates from macro-models differ, there is broad agreement that the net effect on aggregate employment will be modest (OECD 2024 Employment Outlook, forthcoming). However, the transition will have a significant impact on global labour markets, as some jobs will disappear, and new jobs will emerge, leading to a reallocation within and across sectors and regions. Moreover, many existing professions will be transformed and redefined as day-to-day tasks and work methods become greener. Finally, climate change itself will impact labour demand and working conditions, primarily through an increase in temperatures and in the frequency of extreme weather events.

The challenge for labour markets is therefore twofold:

To scale up policies to attract private investment and foster innovation and design policies that facilitate and manage the reallocation of labour induced by mitigation policies; and
To enhance the capacity of workers, businesses, and communities to adapt to rising temperatures and the increasing severity of extreme weather events.

The exact scale of these challenges remains uncertain and will depend on the implementation of policy commitments, including whether SDG targets will be met, as well as on the level of additional investments (public, private, or private subsidised by public budgets). It will also depend on the extent of adoption of existing clean technologies and further development of newer ones – for example, carbon capture, utilisation, and storage (CCUS) – across sectors and companies, both locally and internationally.

While a transition towards greener energy production may create jobs in new sectors in renewables, the transition from declining sectors such as fossil-fuel related activities to expanding new sectors will not be smooth for all workers. To address the labour market implications of climate change mitigation policies, governments should evaluate existing labour market and social policies to assess whether they are ready and effective to manage potential labour market disruptions of the green transition. They should take a proactive stance to prevent the risk of job displacement, focusing on the development and enhancement of workforce skills and the implementation of early intervention strategies to mitigate adverse impacts on employment. For those workers who will lose their job, robust support mechanisms must be established to safeguard their livelihoods. Income support measures and active labour market policies (ALMPs) such as job search assistance, job matching and employment incentives play a pivotal role in helping displaced workers or those at risk of displacement and job loss (OECD, forthcoming[73]).

Avoiding a disproportionate burden on low-income households while providing sufficient funding for the net-zero transition will require targeted and coherent policy responses. Carbon pricing, which introduces fees to greenhouse gas emissions to reduce the use of coal, oil, and gas, can contribute both to reducing emissions and raising funds for the net-zero transition. However, governments should avoid the financial burden of carbon pricing falling disproportionately on lower-income households, which are less able to stem additional costs.

Therefore, the net-zero policy agenda needs to reconcile equity considerations with environmental objectives and ensure support for citizens. As part of broader policy packages, rebating some or all the revenues from carbon pricing to low-income households would give governments considerable scope to mitigate the market and distributional impacts of the transition. When climate policies are aligned with well-being goals – for instance, policies improving air quality – their cost-effectiveness increases, as multiple problems can be tackled at the same time. Public acceptance of such policies can also increase if they generate short-term benefits in addition to reducing emissions in the longer term.

OECD work exploring the interplay between climate policies and well-being objectives (OECD, 2019[74]) has analysed the potential of multiple climate policies to leverage environmental and human well-being benefits. For example, investments in green spaces and urban forests can help cities adapt to heat waves, support biodiversity, improve physical and mental health via better air quality, increase opportunities for physical activity and for social interaction, and contribute to community cohesion. Upgrading energy-consuming systems in low-income housing can also reduce emissions while improving indoor comfort and air quality and reducing energy bills.

Investments in public transport are another example. Good quality public transport can reduce emissions by allowing for modal shifts from private vehicles, while also improving air quality, reducing road fatalities and noise levels (particularly if coupled with the electrification of buses) and increasing equality in terms of access to jobs and opportunities. To maximise complementarities between climate policies and well-being outcomes, countries should apply a well-being lens to transport policy, coupled with a systems approach, which addresses issues through interdisciplinary analysis focusing on people, systems, design, and risk (OECD, 2021[75]).

Guided by a 3-step process (Figure 3.6), transport policies with the potential to lead to higher well-being and low-emission transport systems can be identified to leverage environmental and human well-being benefits. These could include street redesign prioritising pedestrians, cyclists, and public transport users; spatial planning focused on creating proximity between people and places; and the integration of private on-demand services with public transport. The combination of these policies can increase the attractiveness of shared transport modes through private motorized vehicles, lead to shorter commutes, and reduce emissions through shifts towards sustainable modes of transport and reduced transport demand.

Figure 3.6. A three-step process to identify transformative policies

3.2.3. Accelerating access to clean energy and protecting biodiversity and natural resources

Governments struggle to evaluate their allocation of budgetary resources to fossil fuels and their alignment with environmental and well-being goals. To support this effort, the methodology for reporting the indicator SDG 12.c.1 “Measuring Fossil Fuel Subsidies in the Context of the Sustainable Development Goals” was developed by UN Environment in collaboration with the OECD and the International Institute for Sustainable Development (IISD) (UNEP, 2019[76]). Three types of subsidies are to be reported through this indicator:

1. Direct transfers of government funds.

2. Tax expenditures and other foregone revenue (i.e., fiscal losses due to under-priced government goods and services.

3. Induced transfers/price support (a change in prices received by producers and paid by domestic consumers because of government interventions, such as through direct price regulation, pricing formulas, border controls or taxes, and domestic purchase or supply mandates); and under-pricing of goods and services.

The OECD Inventory of Support Measures for Fossil Fuels documents and estimates government measures that encourage fossil-fuel production or consumption relative to renewable alternatives in 51 OECD, G20, and EU Eastern Partnership economies. The OECD and the International Energy Agency (IEA) also together produce a combined estimate of fossil fuel support over a greater number of countries. The aim of these tools is to reduce countries’ reporting burden and ensure international harmonisation of data on fossil fuel subsidies.

The cost of support measures for the production and consumption of fossil fuels increased sharply in 2022, as countries sought to cushion the impact of surging energy prices on households and firms. According to the latest update of OECD and IEA data, the fiscal cost of global support for fossil fuels almost doubled to USD 1 481.3 billion in 2022, up from USD 769.5 billion in 2021 (OECD, 2023[77]). The OECD Inventory of Support Measures for Fossil Fuels estimates that direct transfers and tax expenditures associated with support measures for fossil fuels amounted to USD 427.9 billion in 2022. In addition, the IEA calculates that fossil fuels sold below market prices amounted to USD 1 126.6 billion. Increases were significant across petroleum, electricity, and natural gas (Figure 3.7).

Governments need to reform existing support measures to better target those in greatest need. Lack of targeting raises fiscal costs and often disproportionately benefit better-off households, which tend to consume more energy. Finally, more generally, non-targeted support measures distort market prices of fossil fuels (determined by supply and demand, thereby contributing to the continued consumption of fossil fuels.

The OECD and IEA have consistently called for the phasing out of inefficient fossil fuel support, which encourages wasteful consumption and impedes investment in clean energy, and redirection of public funding toward the development of low-carbon alternatives, alongside improvements in energy security and energy efficiency.

Figure 3.7. Fiscal cost of support for fossil fuels almost doubled in 2022, with significant increases across petroleum, electricity and natural gas

By better understanding the mutually reinforcing effect that energy transition policies can have on related sustainable development objectives, governments can address climate change more coherently and effectively, as outlined below.

3.2.4. Analysing links between climate change mitigation and adaptation

While climate change adaptation and mitigation actions have largely been undertaken separately in the past, there is growing recognition that there are synergies that could be exploited to achieve climate resilience more effectively (OECD, 2021[80]). Many opportunities exist to implement climate actions that bring both adaptation and mitigation benefits across different sectors, notably in forestry, agriculture and land management, water management, and urban planning. For example, forest or mangrove restorations can increase carbon storage capacity while simultaneously reducing exposure and vulnerability to weather-related risks, such as coastal storm surges or landslides (OECD, 2024[81]).

Identifying the areas where climate change adaptation and mitigation actions are mutually reinforcing can lead not only to better understanding of what harmonised action means, but also help policy makers avoid trade-offs and develop more coherent policy measures and financing mechanisms (Figure 3.8).

At the same time, there are trade-offs involved not just between the mitigation and adaptation objectives, but also with other environmental goals. Trade-offs emerge from the complexity and diversity of these linkages across geographical scales. They need to be well understood and managed so as not to risk undermining the ultimate policy objectives. For example, while hydropower dams contribute to mitigating climate change by providing a clean energy source, it can exacerbate the consequences of climate variability for communities downstream of the dams. Desalination plants are an important adaptation measure to cope with water shortages, but they might increase energy demand from potentially greenhouse gas intensive sources of energy production.

Figure 3.8. Aligning climate change mitigation and adaptation policies: synergies and trade-offs

As countries strive to introduce climate adaptation and mitigation measures, it is important to ensure impacts on biodiversity are also considered. Climate change has already resulted in shifts in species distribution, disrupted species interactions, and led to mismatches in the timing of migration, breeding and food supply. These and other effects have contributed to population declines. Climate trends and extremes are pushing marine and terrestrial ecosystems closer to thresholds and tipping points. Protecting biodiversity (i.e., species, ecosystems, and genetic diversity) and other natural resources will therefore be critical for enabling sustainable development.

Vegetation and soils are important contributors to climate change mitigation through carbon sequestration and nutrient cycling – where energy and matter are recycled back into the environment – including carbon. Biodiversity provides invaluable ecosystem services upon which all life depends, yet biodiversity is decreasing at unprecedented rates, imposing severe costs on human health, wellbeing, and our economies. Climate change is now the third-largest driver of biodiversity loss (OECD, 2021[83]).

Addressing biodiversity loss itself will require scaled up action across all fronts, including more ambitious policies to conserve, sustainably use, and restore biodiversity (covering regulatory and economic instruments); mainstreaming biodiversity across sectors and policy areas (including climate); and scaling up and aligning finance with biodiversity objectives. Examples include careful siting (and micro-siting) of infrastructure away from ecologically sensitive areas, designing power lines to minimise electrocution risk and increasing the cut-in speed of wind turbines to reduce the risk of bat collisions. Such solutions are being tested and refined, as experience and evidence increase. Digital technologies such as machine learning and artificial intelligence (AI) are providing new opportunities for the industry to monitor and cost-effectively mitigate impacts on biodiversity (e.g., wind turbine shutdown on-demand mechanisms based on automated monitoring of collision-sensitive species). Through strategic planning and targeted policies, governments can help scale up such solutions to ensure that renewable power expansion does not compromise biodiversity goals (OECD, 2024[84]).

To advance the protection of biodiversity across the board, policy and financing should look to increase benefits for biodiversity while minimising trade-offs with climate-change policy. Failure to do so may lead to projects targeting climate change mitigation that may be negative for biodiversity (e.g., pursuing carbon sequestration strategies that promote the expansion of fast-growing monoculture plantations in natural grasslands or tropical areas with primary forest systems), while coherently designed policies can mutually reinforce the implementation of biodiversity and climate objectives.

For instance, transitioning away from fossil fuels can reduce climate-related pressure on biodiversity but brings its own biodiversity risks. Unless carefully managed, the expansion of renewable power could compromise biodiversity (OECD, 2024[85]). Countries should therefore use evidence on biodiversity impacts from renewable power infrastructure to identify opportunities for embedding respect for biodiversity in all power sector planning and policy. This would contribute to ensuring better outcomes for nature and the climate, and in turn for us all. OECD research and analysis on the subject can support countries in this regard, offering governments recommendations to align renewable power expansion with biodiversity goals (OECD, 2024[85]).

Equally, nature-based solutions (NbS) play a pivotal role in addressing various environmental and climate challenges while fostering sustainable development. By providing natural buffers and other key ecosystem services, nature-based solutions can help strengthen climate resilience while also contributing to climate change mitigation through functions such as sequestering carbon. NbS usually provide several benefits across sectors. For example, integrating wetland restoration, afforestation, and urban greening into land-use planning can bolster resilience against extreme climate events such as flooding, heatwaves, and drought, while at the same time improving air and water quality, providing habitat for many species, and offering recreational and economic opportunities. NbS can also represent a sustainable alternative to brown infrastructure.

The effort to capitalise on synergies between biodiversity protection and climate change adaptation and mitigation should also extend to development cooperation. Currently, the development finance investments of the DAC in biodiversity are mainly driven by climate change concerns. On average, the amount of official development finance (ODF) targeting climate change adaptation and mitigation objectives together with biodiversity objectives was more than half of the ODF budget allocated to the biodiversity-climate nexus annually over 2015-21 (USD 3.8 billion) (OECD, 2023[86]). This exemplifies how DAC members seek to coordinate biodiversity and climate-related development finance. However, only 21% of the DAC’s climate-related development finance also targets biodiversity specifically on average.

3.2.5. Securing sanitation, water, and food security

The world is not on track to meet SDG6 on water supply and sanitation: around 2.2 billion people lack access to safely managed drinking water, and approximately 3.5 billion lack access to adequate sanitation (UNESCO, 2023[87]). To make matters worse, the Global Commission on the Economics of Water (GCEW) recently documented how the hydrological cycle (which encompasses the cycles experienced by liquid water, moisture in soils, and vapour in the atmosphere) has been tilted by climate change (Global Commission on the Economics of Water, 2023[88]). For the first time, the GCEW final report (to be launched at the Summit of the Future) documents the economic and social consequences of a tilted hydrological cycle. The GCEW promotes stabilising the hydrological cycle as a prerequisite to mitigating climate change (as less moisture in soils limits capacity to capture and store carbon) and ensuring food security. Suggestions by the GCEW include:

managing the global water cycle as a global common good, to be protected collectively and in the interests of all;
adopting an outcomes-focused, mission-driven approach to water encompassing all the key roles it plays in human well-being;
ceasing underpricing water; and
phasing out some USD 700 billion of subsidies in agriculture and water each year, which tend to generate excessive water consumption and other environmentally damaging practices (Global Commission on the Economics of Water, 2023[88]).

In the same vein, when advancing on securing global food security, countries must consider critical interconnections with other sustainable development objectives. For example, agriculture can have significant impacts, both negative and positive, on the environment – on and off the farm. On the one hand, the sector is a significant contributor to greenhouse gas emissions and farm activities can exert negative pressures on soil, water, and air quality due to unsustainable soil management practices for cropping as well as livestock management. On the other hand, agriculture can provide beneficial ecosystem services, such as supporting carbon sequestration in soils, supporting biodiversity in the case of sustainable practices in presence of semi-natural habitats, maintaining landscapes and soils in good conditions, or mitigating flood risks through the adoption of certain farming practices.

To support the monitoring of environmental impacts of agriculture, the OECD has developed a comprehensive database of agri-environmental indicators since the mid-1990s. These currently cover 54 countries and look at a broad range of domains: agriculture land area, ammonia emissions, energy use and biofuel production, farmland birds index, greenhouse gas emissions, nitrogen balance, pesticides sales, phosphorus balance, soil erosion, water quality, and water resources. This set of indicators continues to evolve, and a new indicator is currently being designed to monitor farmland habitat biodiversity.

Equally, while fisheries and aquaculture provide food for billions of people around the world and play an important role in the local economy of coastal communities in many countries, marine and aquatic ecosystems are under stress – from climate change, overfishing and other unsustainable fishing practices, and pollution from various other human activities. Healthy fish stocks are fundamental for maximising sustainable catches, which is key to providing food security, jobs, and income today and for future generations. Healthy stocks are also vital for maintaining aquatic biodiversity.

The international community has recognised the benefits of sustainable fisheries management at the highest level and specific objectives and commitments have been made. SDG 14, which seeks to “conserve and sustainably use the oceans, seas, and marine resources for sustainable development” includes the objectives of: restoring fish stocks to levels that can produce the maximum sustainable yield in the shortest time feasible (Target 14.4), explicitly calling for implementing science-based management plans and noting the key role this can play in achieving better stock status and associated societal benefits; prohibiting fisheries subsidies, which contribute to overcapacity and overfishing; and eliminating subsidies that contribute to Illegal, Unreported, and Unregulated (IUU) fishing by 2030 (Target 14.6). These objectives are also pursued by the World Trade Organization (WTO)4 and the UN parties at the UN Convention on Biodiversity.

Three areas have been identified as particularly important: reforming subsidies to stop incentivizing unsustainable fishing; putting in place science-based restrictions on fishing activities to make unsustainable fishing illegal; and enforcement to fight IUU fishing. To help countries identify priorities for reform, the OECD collects and publishes detailed country-level data on support to fisheries; fish stock health and fisheries management tools in the OECD Fisheries Support Estimate (FSE) and Fisheries Sustainability Indicators databases. Further, a tool has been developed to better understand support policies, and their potential sustainability impact, and target support to those fisheries that are sustainable and well-managed. The tool highlights how both the nature of fisheries support policies, their design, and the context in which support is granted, have implications on fishing activities and the health of fish stocks (OECD, 2022[89]).

Food systems are affected by a multitude of policies, which were historically developed by different ministries, agencies, and levels of government. There is an increasing recognition that policy coherence across policy areas and levels of government is essential in making effective policies for food systems (OECD, 2021[90]). Governments should implement a paradigm shift in advancing food policy that embraces multisectoral, bottom-up, and place-based interventions while considering biodiversity and environmental concerns. A territorial approach to food policy, which considers the regional and context-specific nature of food policy, including a strong place-based dimension, which takes into account how food insecurity and poverty are highly interconnected, is key. This approach improves the vertical and horizontal co-ordination of food policies and interventions across levels of government while taking the diversity of different territories into account, which leads to a better understanding of differences in development opportunities that are so often missed with one-size-fits-all policies (OECD/FAO/UNCDF, 2016[91]).

Although food production is mostly associated with rural areas, cities too have a critical role to play in achieving sustainable food systems. By 2050, up to 55% of the world population will be living in urban areas, consuming 80% of the world’s food. In 2019, around 931 million tonnes of food waste were generated – 17% of global food production – much of it in cities. Cities therefore have a critical role to play alongside national governments in achieving sustainable food systems by shaping factors ranging from people’s diets, consumption habits, and food waste, to supply chains and land use planning.

Cities can promote sustainable food policies by including them in their sustainable urban-development strategies. For instance:

Milan (Italy) considers food and agriculture as key components of urban development and is therefore limiting the use of agricultural land, addressing land degradation, promoting urban agriculture and horticulture, and providing food to the most vulnerable population groups;
New York (US) has shifted from a narrow focus on diet-related outcomes (obesity and malnutrition) to a more holistic approach expanding access to education to build food knowledge, improving working conditions to increase income and access to food, and implementing food procurement focused on equity; and
Strasbourg (France) has set up an urban agriculture project in underdeveloped neighbourhoods to engage the local population in urban farming, offer job opportunities and raise awareness on healthy nutrition.
Cities are also promoting a circular economy approach, which aims to prevent food waste, improve distribution, and boost efficiency. In places like Ljubljana (Slovenia) and Porto (Portugal), local initiatives help reduce food waste through communication campaigns and incentives.

3.2.6. Reducing disaster risks and improving disaster response

Climate change stands as a pivotal factor influencing various types of disaster risks, with most of its impacts expected to manifest through climate variability and extreme weather events (IPCC, 2018[92]). Both disaster risk reduction (DRR) and climate change adaptation (CCA) strive to mitigate the adverse effects of these hazards and, where feasible, exposure to these events.

Global trends indicate a continued increase in urbanisation within flood-prone areas, particularly in Africa and Asia, coupled with ecosystem degradation. These trends amplify the vulnerability of communities, especially the poorest and marginalised.

To combat such dangers, the adoption in 2015 of the Sendai Framework for Disaster Risk Reduction and the Paris Agreement on Climate Change provide a clear mandate for increased coherence in countries’ approaches to climate and disaster risk reduction. Despite this, responsibilities for CCA and DRR often reside within separate institutions and stakeholders and the existing divisions between these two areas hinder potential policy harmonization. CCA typically draws from scientific theories and norms, while DRR has historical roots in post-disaster civil protection and humanitarian efforts (OECD, 2020[93]). This siloed approach negatively impacts policy coherence, funding schemes, and data sharing; institutions also miss out on potential efficiency gains through collaboration.

Recent global shocks have increased the need for robust multi-level governance and financial arrangements that ensure the necessary resources and capacities at all levels of government to effectively manage and recover from human-made and natural emergencies. For example, recent OECD work on countries such as Ukraine and Türkiye have focused on challenges confronting different levels of government when responding to such disasters. These include identifying urgent reconstruction needs and involving local stakeholders in the design of recovery projects. They also include co-ordinating the support of different levels of government and non-government actors, as well as building local and regional capacity to spend reconstruction and recovery funds, ensure transparency, and track progress on reconstruction goals. Costa Rica fostered active collaboration with indigenous communities that collaborated in the installation and control of checkpoints in overflow areas and early warning posts (OECD, 2023[94]).

The challenges of increasing government cohesion and capacities are particularly high in cities in developing countries, many of which are experiencing a fast and unplanned urbanisation process. This type of urbanisation not only affects the well-being of the population, as local authorities struggle to provide basic public services and create an environment conducive for economic growth, but further increases the vulnerability to climate shocks while increasing the likelihood of carbon lock-in, which refers the risk that fossil fuel-based energy systems delay or prevent the transition to low-carbon alternatives (OECD/UN-Habitat, 2022[95]). Moreover, the compounded effects of fast urbanisation, climate change, and international conflicts are increasingly threatening food security in developing countries. This is particularly the case of intermediary cities with populations between 50 000 and 1 000 000 people in emerging regions including Africa and Asia (OECD/UN-Habitat, 2022[95]).

Addressing these challenges will require that local authorities adopt a systemic approach to policy making. Although climate action and food security are increasingly placed at the top of the local agenda in developing countries, initiatives usually focus on addressing the negative impacts of unsustainable systems rather than their root causes. This is not only an ineffective way to use public resources, but it increases the risk of missing development goals.

In this context, the OECD Development Centre is working with intermediary cities in Kenya and Mozambique to implement a systemic approach that allows these cities to identify high leverage points, that is, strategic areas where small changes can lead to sustainable action. These leverage points will also help these cities reconsider investment decisions, as well as identify complementarities among transport, land use, and climate policies that allow cities to be sustainable by design (OECD/UN-Habitat, forthcoming[96]) (OECD/UN-Habitat, n.d.[97]).

New technologies will also be key for addressing some of the main development challenges faced by cities in developing countries. Through the G20 Platform on SDG Localisation and Intermediary Cities (PLIC), the Centre is working with intermediary cities in Kenya, Egypt, Jordan, and Brazil to foster a deeper understanding of how local innovation ecosystems can be leveraged to meet tomorrow’s food needs sustainably.

For instance, food-tech innovations such as precision agriculture that uses modern data-driven technologies to grow crops, vertical farming, and hydroponics can help maximize agricultural productivity even in increasingly limited urban spaces5. Solutions such as smart packaging technologies that use sensors to monitor a product’s condition, Internet of Things (IoT)-enabled inventory management systems that automate data collection systems to guarantee precise and current inventory data, food preservation technologies can minimize food waste along the entire supply chain, and blockchain technology can provide transparent and traceable data on the environmental impact of food production and distribution and on food safety and quality issues, thereby reducing the risks that may arise from the introduction of animal or plant life to an environment. Developing adequate innovation ecosystems to implement these solutions could be a game changer for intermediary cities in developing countries.

Moreover, OECD data shows that without policy intervention, global material use risks increasing from 79 Gigatonnes in 2011 to a projected 167 Gigatonnes in 2060 (OECD, 2019[98]). This is likely to cause serious environmental consequences, including pollution from material extraction, processing, and waste, as well as a doubling of greenhouse gas emissions associated with materials management. For plastics, production has more than doubled between 2000 and 2019 (OECD et al., 2022[18]).

A full lifecycle approach – which assesses the opportunities and risks of a product or technology, beginning with the raw materials needed for production through the product’s disposal – with a focus on waste prevention measures is therefore recommended to reduce the environmental impacts related to materials use and waste. Taking the example of plastics, OECD analysis carried out in support of negotiations on a global plastics treaty (OECD, 2023[99]) highlights the importance of targeting policy measures across the lifecycle of plastic products to drastically reduce plastic leakage to the environment.

Policy Recommendations

To guarantee a sustainable transformation and accelerated progress across the SDGs, governments and the international community are encouraged to:

Closing divides to Leave No One Behind

Providing universal access to social protection and generating good quality jobs for a just transition

Strengthen access to social protection by increasing coverage and ensure sustainable financing of social protection to ensure that no one is left behind; and
Use targeted social protection policies and strategies to promote the integration of environmental and economic considerations into social protection measures.

Breaking the vicious circle of informal employment and low-paying work

Enhance access to social protection for lower-tier informal workers, including by integrating them in non-contributory social protection schemes and subsidising their participation in contributory schemes to alleviate poverty;
Advance remuneration policies that address inequality – and the mechanisms to ensure their application and enforcement – including effective minimum wages and measures to improve the bargaining power of low paid informal workers; and
Invest in accessible, equitable, quality education, and promote access to lifelong learning and activation support for workers in the informal sector.

Closing gender gaps

Enact and enforce laws that enable gender equality and protect women’s and girls’ human rights, tackle gender discrimination and bias in education, the labour market, and economies and societies;
Promote gender balance in private and public leadership positions, support gender equality in entrepreneurship, and ensure equal pay for work of equal value, support a more equal distribution of paid and unpaid work between men and women, more accessible and affordable early childhood education and care, and effective flexible working arrangements for the compatibility of work and family responsibilities; and
Mainstream gender equality across policy areas.

Adopting a life-course approach to essential services and tackling the global crisis in education

Invest more, more equitably and more efficiently in education, including by harnessing the power of the digital revolution to provide quality education as a public good and a human right, with a particular focus on ensuring an inclusive, safe, healthy, and stimulating learning environment, including for the most marginalised;
Integrate sustainable development education into mainstream curricula to equip learners with the knowledge, skills, and values needed to tackle global crises, with the goal of fostering resilience and innovation to build more sustainable societies; and
Engage and empower young people as agents of change to deliver sustainable, resilient, and innovative solutions to multiple crises, particularly at the local level.

Achieving and sustaining Universal Health Coverage

Increase funding for UHC at both domestic and international levels by expanding prepayment mechanisms and leveraging health taxes on products that are harmful for people's health;
Invest in national health systems’ resilience by aligning action across finance and health ministries to address capacity constraints; and
Promote global cooperation for UHC, including by facilitating international dialogue to improve global policy coherence and support for global public goods such as vaccines, surveillance efforts, and coordinated emergency responses. This ensures that all countries can better withstand and recover from health crises.

Leveraging synergies between environmental and social policy objectives

Strengthening domestic enabling conditions and the credibility of transition finance

Develop transition plans that are credible and clear; and they should be, widely consulted to ensure that their ambition will be matched by popular support.

Addressing the labour and distributional impacts of climate policies from a well-being perspective

Provide effective training and early intervention measures to help transitions out of emission-intensive occupations, coupled with well-designed out-of-work income-support schemes;
Improve pay and working conditions in low- and medium-skilled green-driven jobs;
Develop adaptation and mitigation measures to protect the livelihoods of the most exposed populations, in anticipation of major reallocations within and across sectors;
Channel part of the carbon price revenues back to the most affected households through well-targeted transfers; and
Leverage green investments in support of well-being objectives, including by investing in actions that improve physical and mental health and contribute to community cohesion.

Accelerating access to clean energy and protecting biodiversity and natural resources

Evaluate the allocation of budgetary resources to fossil fuels and gradually phase out inefficient fossil fuel support, which encourages wasteful consumption and impedes investment in clean energy;
Redirect public spending towards the development of low-carbon alternatives, alongside improvements in energy efficiency and security; and
Reform existing support measures to better target those in need.

Analysing interlinkages between change mitigation and adaptation

Develop comprehensive natural capital accounts, a tool that measures changes in ecosystems and setting clear SMART targets and indicators; and
Mainstream biodiversity in strategies, plans, policies, project and aligning public budgets and fiscal policy with biodiversity objectives; identify and reform environmentally harmful government support; and scale up private finance and investment in biodiversity, including through enhanced use and effectiveness of economic instruments as part of a broader policy mix.

Securing sanitation, water, and food security

Address the economic and social consequences of climate-altered water cycles, and wherever possible working to stabilise the hydrological cycle to mitigate climate change;
Implement greater policy coherence to allow for multisectoral, bottom-up, and place-based interventions that address the unique needs and opportunities of different territories and communities; and
Engage cities and rural areas in sustainable food policies as part of their territorial development strategies, focusing on reducing food waste and fostering a circular economy, while taking into account urban-rural linkages.

Reducing disaster risks and improving disaster response

Make tailored climate information readily available to support evidence-based policy;
Align responsibility for co-ordination with responsibility for implementation of CCA and DRR policies and enhance capacity to translate coherence in planning into coherence in implementation, especially by supporting regional and local governments;
Use strategic foresight to identify effective climate actions under various climate scenarios, including developing contingent plans for climate emergencies; and
Optimise long-term funding allocation across different risks through budgeting tools, disaster risk financing mechanisms including early warning and anticipatory action plans based on assessments of future impacts, and greater transparency in public spending and monitor, evaluate and learn from CCA and DRR.

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Notes

← 1. Ranging from 11-15% to 24- 27% of the population (OECD, 2024[11])

← 2. Further analysis of ODA that integrates gender equality and climate action objectives will also shed light on what is driving those allocations, given the low level of evidence of integration at strategic and policy levels. This is complemented by the OECD DAC Guidance for Development Partners on Gender Equality and Women’s Empowerment (OECD, 2023[49])

← 3. Efforts to transition away from coal do not preclude the need for transitioning away from other fossil fuels. However, this Guidance is focused on coal and only touches upon other fossil fuels to the extent that they should, as a rule, not be considered as suitable replacement fuels.

← 4. Negotiations on fisheries subsidies at the WTO have been on-going for over two decades. In June 2022, a major breakthrough was achieved when members of the WTO agreed on a series of disciplines to eliminate some of the most potentially harmful types of subsidies: those that benefit IUU fishing; those that benefit the fishing of overfished stocks; and those that benefit fishing in the unregulated high seas. They also agreed to take special care and exercise due restraint when subsidising fishing of stocks which are not monitored. Since then, members of the WTO have continued to negotiate to agree on additional disciplines to eliminate other potentially harmful subsidies, such as those that encourage overcapacity and overfishing.

← 5. Urban food production has grown in the last few decades and is complementary to rural food production thus helping to meet local demand and can reduce food loss and waste through its shorter supply chains.

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