This chapter applies a policy coherence lens to identify critical interlinkages between the SDGs to be reviewed by the HLPF in 2018: Goal 6 on water, 7 on energy, 11 on cities, 12 on sustainable consumption and production, and 15 on biodiversity. It draws on OECD work to explore each of the five goals in terms of: i) major challenges; ii) fundamental synergies and trade-offs between Goals that need to be managed to ensure a coherent and effective implementation; and iii) potential policy and governance responses. The chapter is intended to provide analytical input and inform the thematic review at the UN HLPF. This work is part of the OECD Action Plan on the Sustainable Development Goals which calls on the OECD to contribute to policy analysis, guidance and tools to support countries’ efforts to implement the SDGs.
Policy Coherence for Sustainable Development 2018
Chapter 1. Coherent approaches to achieving sustainable societies
Abstract
Introduction
In July 2018, the United Nations High-level Political Forum (HLPF) will address the theme “Transformation towards sustainable and resilient societies”. Along with SDG 17, which calls on countries to revitalise the global partnership for sustainable development, the 2018 HLPF will review:
SDG 6: Ensure availability and sustainable management of water and sanitation for all;
SDG 7: Ensure access to affordable, reliable, sustainable and modern energy for all;
SDG 11: Make cities and human settlements inclusive, safe, resilient and sustainable;
SDG 12: Ensure sustainable consumption and production patterns; and
SDG 15: Protect, restore and promote sustainable use of terrestrial ecosystems, sustainably manage forests, combat desertification, and halt and reverse land degradation and halt biodiversity loss.
This chapter applies a policy coherence for sustainable development (PCSD) lens to the 2018 HLPF theme. It identifies some critical interlinkages among the five SDGs under review, based on the premise that each goal has a different but complementary role in achieving the 2030 Agenda’s primary aspiration of “shifting the world onto a sustainable path”.
Drawing on extensive work and analysis by the OECD on sustainable and resilient societies, the chapter examines each of the five goal in terms of: i) major challenges; ii) key interlinkages with other goals, i.e. fundamental synergies and trade-offs that need to be managed to ensure coherent implementation; and iii) policy and governance responses.
Interlinkages among the SDGs necessarily depend on specific country contexts and challenges. Many goals and targets are a means of contributing to the achievement of other goals and cannot be achieved through single-sector or silo approaches. SDG target 17.14 on enhancing policy coherence for sustainable development recognises the importance of PCSD in this context.
Coherent approaches to transformation
Transformation towards resilient societies is a multidimensional challenge. It calls for strengthening policy coherence across sectors, actors, governance levels and timeframes to address the underlying and interconnected causes of vulnerability. These causes include: weak institutions and governance capacity (including lack of vertical and horizontal co-ordination); socio-economic inequalities; injustice and discrimination; inadequate services and infrastructure; depletion of natural resources, global shocks, climate-related extreme events and disasters. Coherent and integrated approaches are also needed to manage risk factors such as rapid urbanisation, increased environmental pollution, depletion of natural resources and demographic changes.
Policy coherence is essential to transform systems that undermine well-being and perpetuate vulnerabilities. It can help to build resilience and generate fundamental changes in the ways societies and economies use resources (natural, economic, human, and social) for human well-being. It addresses how societies and economies consume and produce, as well as the structural inequalities that underlie vulnerability.
In the context of the 2030 Agenda, this means increasing our capacities to manage the critical interlinkages among the Sustainable Development Goals (SDGs) and address their implications. It entails harnessing synergies, managing trade-offs, and avoiding or minimising negative spillovers and impacts. Applying this perspective to the five Goals to be reviewed by the HLPF in 2018, highlights for example that:
SDG 6 on water, SDG 7 on energy, and SDG 15 on land, forest, and ecosystems are related to key natural resources. They represent a major component of the natural asset base from which human well-being is derived. They are necessary to life and a major foundation of economic activity. Policy decisions made in each of these sectors can have significant impacts on the others. At the same time, these sectors can be affected by how countries collectively address SDG 13 on climate. The interactions between water, energy and land, forest ecosystems and climate are numerous and complex, and cannot be addressed through sectoral approaches alone.
SDG 12 on responsible consumption and production is in this regard one of the key drivers for transformation which applies to all goals. It sets out the necessary requirements to ensure a sustainable management of resources (natural, economic, human and social capital), and to restore and preserve the asset base over time. This goal is supported by targets related to efficiency and resource use across all SDGs.
SDG 11 on inclusive, safe, resilient and sustainable cities and human settlements is essential for guiding more sustainable, inclusive urban development in the context of a rapidly urbanising world. More than half of the world’s population currently resides in cities and with urbanisation projected increase. A great demand for natural resources (water, energy, land, forests and ecosystems) originates from cities and metropolitan areas, which means that achieving SDG 11 will depend on the achievement of SDGs 6, 7, 12 and 15. Cities account for an estimated 67% of energy use and 71 % of global energy-related CO2 emissions. Moreover, while cities concentrate economic growth, they also intensify inequalities. For instance, income inequality is higher in cities relative to the respective national average and tends to be higher in larger cities (OECD, 2016[1]). Across a range of dimensions – health, housing, education, jobs – well-being outcomes vary considerably within and across cities.
Goal 6: Water and sanitation for all
Water is a critical asset for our well-being and that of future generations. The provision of good quality water and adequate sanitation, as well as the sustainable management of water resources, generates substantial benefits for society, the economy and the environment, such as reduced poverty and incidence of diseases; increased school attendance and opportunities for education; women empowerment both domestically and as actors in the economy; increased productivity and food security; and tourism growth (OECD, 2011[2]). Adequate good quality water is vital for supporting freshwater ecosystems and the services they provide, such as plant growth, natural habitats, nutrient recycling, and waste removal. It is essential for use in agriculture, aquaculture, industry, and energy production. Conversely, inadequate access to these resources and services act as a significant drag on sustainable development, affecting people’s health, reducing labour productivity, increasing health care costs and undermining freshwater ecosystems (OECD, 2017[3]).
Millennium Development Goal 7 called for halving the proportion of the universal population without sustainable access to clean and safe drinking water and basic sanitation as part of “ensuring environmental sustainability”. SDG 6 (Box 1.1) is a game changer, compelling all countries to “ensure availability and sustainable management of water and sanitation for all” (UNGA, 2015[4]). While MDG 7 focused on drinking water and basic sanitation, SDG 6 covers the entire freshwater resource cycle (e.g. water quality and wastewater, water use and scarcity, and ecosystems).
Box 1.1. SDG 6: Ensure availability and sustainable management of water and sanitation for all.
6.1 By 2030, achieve universal and equitable access to safe and affordable drinking water for all.
6.2 By 2030, achieve access to adequate and equitable sanitation and hygiene for all and end open defecation, paying special attention to the needs of women and girls and those in vulnerable situations.
6.3 By 2030, improve water quality by reducing pollution, eliminating dumping and minimizing release of hazardous chemicals and materials, halving the proportion of untreated wastewater and substantially increasing recycling and safe reuse globally.
6.4 By 2030, substantially increase water-use efficiency across all sectors and ensure sustainable withdrawals and supply of freshwater to address water scarcity and substantially reduce the number of people suffering from water scarcity.
6.5 By 2030, implement integrated water resources management at all levels, including through transboundary cooperation as appropriate.
6.6 By 2020, protect and restore water-related ecosystems, including mountains, forests, wetlands, rivers, aquifers and lakes.
Targets on means of implementation
6.a By 2030, expand international cooperation and capacity-building support to developing countries in water- and sanitation-related activities and programmes, including water harvesting, desalination, water efficiency, wastewater treatment, recycling and reuse technologies.
6.b Support and strengthen the participation of local communities in improving water and sanitation management.
Source: (UNGA, 2015[4]).
Water challenges
Lack of access to safe water and inadequate sanitation have profound socio-economic impacts and represent a major obstacle to eradicating poverty. Water-related diseases are among the most common cause of illness and premature deaths, affecting mainly the poor. More than 340 000 children under five die annually from diarrhoeal diseases due to unsafe drinking water and poor sanitation and hygiene (WHO/UNICEF, 2015[5]).
Progress has been made over the past 15 years, according to two status reports on the SDGs presented by the UN Secretary-General so far. In 2015, 91% of the world’s population (6.6 billion people) had access to improved drinking water sources compared with 82% in 2000 (UN ECOSOC, 2016[6]). It is important to note that “improved” water does not necessarily mean “safe” water fit for human consumption. In the same year, 68% of the global population (4.9 billion people) used improved sanitation facilities compared with 59% in 2000 (UN ECOSOC, 2017[7]).
Yet, in 2015 an estimated 663 million people still lacked access to improved water sources. In the same year, 2.4 billion people lacked basic sanitation services, and among this number 946 million had no facilities at all (UN ECOSOC, 2016[6]). In developing and emerging economies the main challenge is to extend water supply and sanitation services to poor urban and rural areas in particular. In OECD countries the more common concern is to renew and upgrade existing or ageing infrastructure (OECD, 2017[3]).
The challenge of ensuring universal access to safe water for all (SDG 6) is compounded by the changing distribution of global water resources due to climate change. It is expected that climate change will alter the intensity, frequency, seasonality and amount of rainfall, aspects which impact surface water flows and groundwater recharge, as well as temperature (OECD, 2013[8]). Climate change impacts on freshwater include rising water temperature, deteriorating water quality, increases in vaporisation and in frequency and intensity of extreme events (OECD, 2013[9]).
Water pollution is also a factor. At least half the world’s population suffers from polluted water (OECD, 2017[10]). Water pollution reduces the quantity and quality of useable water, exacerbating the problem of water scarcity. Water quality is most affected by the drivers of water demand: agriculture, industry, and urban water use (OECD, 2017[10]). They are linked to nutrient flows from agriculture, industrial and combustion activities, such as transport and power generation; poor wastewater treatment; and rainwater run-off in urban settlements when it is not properly captured and treated. This results in increased eutrophication, biodiversity loss, water-related disease and costs for treatment prior to use. Water pollution from urban sewage is expected to increase three-fold by 2050, compared with its volume in 2000 (OECD, 2015[11]).
The economic, social and environmental costs of water pollution include: i) degradation of ecosystem services; ii) water treatment and health-related costs; iii) reduced productivity in economic activities such as agriculture, fisheries, industrial manufacturing and tourism; iv) reduced property values in some areas; and v) opportunity costs of further development (OECD, 2017[10]). Examples of water pollution impacts to economic, social and environmental values, as well as to relevant SDGs and targets, are presented in Table 1.1.
Table 1.1. Economic, social and environmental impacts of water pollution
Water pollution as a disabler of the Sustainable Development Goals
Source: Adapted from (OECD, 2017[10]).
Competing demands for water – e.g. from cities, farmers, industries, energy suppliers, and ecosystems – adds to the challenge of achieving SDG 6. The rate of demand growth for water has been double that of population growth over the last few decades (OECD, 2016[12]). Irrigated agriculture, which provides 40% of the world’s food supply, is the largest water user globally, accounting for around 70% of withdrawals worldwide and up to 85% in some developing countries (OECD, 2017[13]). Agriculture also accounts for the bulk of water consumption due to losses from evaporation and transpiration (OECD, 2016[12]).
Global water demand is projected to increase significantly – by 55% between 2000 and 2050 – according to the OECD Environmental Outlook to 2050 (Figure 1.1). OECD projections also anticipate that without new policies the allocation of water use could shift significantly, with demand from manufacturing (+400%,), electricity (+140%) and domestic use (+130%) competing with and largely overtaking demand from irrigation in all parts of the world. (OECD, 2012[14]).
Figure 1.1. Global water demand is projected to increase significantly by 2050
Note: The OECD baseline used for the Environmental Outlook to 2050 presents projections of what the world could look like in 2050 if current socio-economic and environmental trends are maintained without new policies to protect the environment. This graph measures only blue water demand and does not consider rainfed agriculture.
Source: (OECD, 2012[14]).
Increased water demand is expected to exacerbate water stress, which now affects more than 2 billion people globally. Northern Africa and Western Asia experience water stress levels above 60%, indicating a strong probability of future water scarcity (UN ECOSOC, 2017[7]). In more than one-third of OECD countries, freshwater resources are under moderate to medium-high stress (OECD, 2017[3]). The number of people living in stressed river basins (i.e. those where withdrawals exceed 40% of available resources) is projected to increase from 1.6 billion in 2000 to 3.9 billion by 2050, or more than 40% of the world’s population (OECD, 2012[14]).
Key interactions with other SDGs
Water is a key enabler for all the SDGs. Identifying the mutually reinforcing interactions between the targets under SDG 6 on water and sanitation and every other SDG can accelerate progress and facilitate the achievement of multiple targets while alleviating potential conflicts. Table 1.2 highlights some of these potential interactions, as well as the relevance of SDG 6 as enabler for achieving other SDGs.
Table 1.2. SDG 6 as enabler for achieving the Sustainable Development Goals
Source: OECD PCD Unit.
Policies neglecting the interlinkages between water, energy and land can exacerbate problems instead of solving them
The interactions between water (SDG 6), energy (SDG 7), land (SDG 15) and agriculture (SDG 2), are numerous and complex. All are influenced by climate variability and change. Policy decisions made in any one of these sectors can have significant impacts on the others, as well as on other areas of sustainable development.
Agriculture depends on land and water resources, and also on the energy sector. The energy sector needs energy and water resources and, in the case of biofuels, interacts with the agriculture sector. Water supply services require water resources, but also energy services. Water, energy and land are interdependent – unsustainable use of one resource can negatively affect the others (OECD, 2017[13]).
Some agricultural regions rely mainly on surface water, whereas others depend more heavily on groundwater for irrigation. Agriculture has an impact on water quality through the release of excess nutrients and micro-pollutants into surface water and groundwater (OECD, 2017[13]). Water quality can significantly impact agriculture by decreasing plant growth and increasing livestock contamination, thus affecting productivity (OECD, 2017[15]).
Water supply is dependent on energy, which is necessary for the provision of freshwater from surface and groundwater sources or via desalination, water transport and distribution, and the collection and treatment of wastewater. The International Energy Agency (IEA) estimates that in 2014, some 4% of global electricity consumption was used to extract, distribute and treat water and wastewater, along with 50 million tonnes of oil equivalent of thermal energy, mostly diesel used for irrigation pumps and gas in desalination plants. Over the period to 2040, the amount of energy used in the water sector is projected to more than double (IEA, 2016[16]). The dependence of water services on energy availability can hinder the provision of clean drinking water and sanitation services (OECD, 2016[12]).
Water is needed for energy production, the extraction, transport and processing of fossil fuels, power production (including cooling for thermal plants), and irrigation of feedstock for biofuels. It is estimated that roughly 2% of total water for irrigation is used for producing biofuels (OECD, 2017[13]). Water is a critical input for crops used for biofuels, which are the largest source of water withdrawals and consumption for primary energy production. Thermal power plants are the main source of water demand in the power sector, which also withdraws significant amounts of water – mostly from surface water sources. The availability of water affects the viability of energy projects and must be considered when deciding on energy options (OECD, 2016[12]).
Integrated management of water, energy and land resources needs to take into account specific contexts as well as direct and indirect effects of changes in their supply and demand. Sectors using the same resource may compete for access when that resource is under stress; e.g. operations in the energy sector may reduce availability of water for agriculture, and therefore crop yields. A resource becoming scarcer and less accessible may lead to increased use of other resources (substitution). For example, depletion of conventional oil reserves could result in oil and gas resources requiring more water for processing, putting pressure on water resources.
Similarly, resource scarcity may require redirecting the inputs or output of a sector towards other sectors in order to ensure security of supply. In the Middle East, for example, where water is scarce and energy cheap, a significant share of regional energy production is used for pumping, transporting and desalinating water. This is beneficial to the water security objective, but represents a cost for society in the form of lower national revenues from energy exports (OECD, 2017[13]). Careful consideration of the land‑water‑energy nexus is called for in designing policies to remove incentives that encourage unsustainable options, as ignoring their interactions can have negative consequences.
Adequate access to safe water and sanitation is a prerequisite to advance health targets
Ensuring water and sanitation services along with safe wastewater treatment can amplify health gains and reduce mortality and morbidity. For example, improvements of access to safe water and sanitation in Mexico and Turkey have helped to significantly reduce health impacts in terms of disability-adjusted life years (down by 90% since 1990). Similarly, in Brazil, Russian Federation, India, Indonesia, China, and South Africa health impacts are down by 70% or more (Figure 1.2). Greater progress is needed in Indonesia, India and South Africa to increase access to improved sanitation and drinking water facilities. In these countries, the consequent health impacts, premature mortality and productivity losses remain relatively high (OECD, 2017[3]).
Figure 1.2. Access to safe drinking water and improved sanitation
Note: Data shown in panel A contain estimates.
Source: (OECD, 2017[3]).
Policy and governance responses
The cost of meeting the SDG targets on access to safe drinking water and sanitation is estimated at around USD 114 billion per year, three times current investment levels (Hutton and Varughese, 2016[17]). Investment needs are significant, but also needed are better policies and water governance to ensure that investments translate into effective service delivery and sustainable solutions. Adequate responses require robust water policies and coherence across policies in domains that affect water availability and use, and exposure and vulnerability to risks of floods, droughts, or water pollution. These must be supported by good governance which combines different levels and engages a range of stakeholders.
The OECD has been providing policy guidance on water since the early 1970s. Dedicated studies, policy reviews and dialogues have documented the economics and governance of water management, while standards provide guidance to countries for more effective, efficient and inclusive design and implementation of policies towards enhanced water security. In December 2016, the OECD Council adopted the Council Recommendation on Water (Box 1.2), which reflects the OECD Principles on Water Governance.
Box 1.2. OECD Recommendation on Water
The OECD Recommendation on Water, adopted by the OECD Council on 13 December 2016, proves policy guidance on a range of topics relevant for water resources management and the delivery of water services:
managing water quantity;
improving water quality;
managing water risks and disasters;
ensuring good water governance;
ensuring sustainable finance, investment and pricing for water and water services.
It recommends to set up and implement water policies that:
are adjusted to local conditions, based on long-term water management plans and enhanced policy coherence with climate change adaptation and across various sectors (e.g. land management, food and energy security, urban development, spatial planning, biodiversity protection);
combine water demand management with the promotion of water use efficiency and allocation regimes that are dynamic, flexible and adjustable to shifting circumstances at least social cost;
prevent, reduce and control water pollution through regulatory, economic and voluntary policy instruments that hold polluters accountable;
assess and prioritise water-related disaster risk reduction, and develop emergency management capabilities and financial protection strategies;
enhance the effectiveness and efficiency of, and trust and engagement in, water governance;
set up measures for the sustainable financing of water services, water infrastructures, water resources management and the protection of water-related ecosystems;
Ensure multi-stakeholder involvement in implementation.
Source: (OECD, 2016[18]).
Water resource management and the need for policy coherence
The effective, efficient and sustainable management of water resources and water services remains a major challenge for all countries as pressures on water resources continue to mount. The global scale of the challenge that can be monetised (excluding environmental risks) is estimated to be USD 500 billion annually. Of these costs, inadequate water supply and sanitation amounts to USD 260 billion per year (Sadoff, 2015[19]). Failure to manage water resources effectively is also resulting in increased pressure on these resources, mounting competition for their use among different economic activities, and, in some regions, conflict (OECD, 2009[20]).
There are limitations to what can be achieved through water policies alone. As mentioned earlier, water availability and use, exposure and vulnerability to water risks (drought, floods, pollution) derive from a variety of initiatives in other domains such as land use, urban development, agriculture, climate and energy. Policy coherence across these areas is essential in ensuring that initiatives mutually reinforce and do not stifle each other.
Enhancing policy coherence is vital to address externalities from multiple sectors and reduce negative impacts on water quality
Policy coherence can help ensure that actions taken by different policy sectors do not have negative impacts on water quality and freshwater ecosystems. Multiple policy sectors affect diffuse water pollution and its management, including: urban development, agriculture, climate, natural resources, forestry, energy, conservation and human health. For example, artificially low production costs in agriculture (induced by input subsidies) distort the market and can encourage food, feed and fibre production that leads to nutrient runoff and eutrophication of water bodies, with economic, social and environmental costs to downstream users. This requires revising policies to achieve more economically, environmentally and socially optimal and sustainable outcomes (OECD, 2017[10]).
Policy coherence, in this context, would entail:
Removing subsidies that encourage land use change or intensification that results in diffuse water pollution.
Looking for solutions such as NOx reductions to improve air and water quality and reduce greenhouse gas emissions simultaneously.
Integrating water pollution control (both point and diffuse source) with air pollution control, land use management, and water quantity management.
Policy coherence is also required to avoid conflicting signals and incentives. Some government programmes and subsidies inadvertently work in opposition to efforts to improve water quality. For example, policies that support agriculture productivity to preserve land for biodiversity habitat can lead to more intensive use of inputs such as fertilisers and pesticides, and fossil fuel use. Similarly, policies aimed at sustaining flows to protect water quality and ecosystems may be at odds with policies to sustain irrigated agricultural in semi-arid areas. Energy subsidies can encourage irrigation from groundwater sources, and cause saltwater intrusion with largely irreversible effects on groundwater quality (OECD, 2017[10]).
Section VI of the OECD Recommendation on Water (Box 1.2) includes 12 Principles on Water Governance (Box 1.3). Principle 3 encourages policy coherence through effective cross-sectoral co-ordination, especially among policies for water and the environment, health, energy, agriculture, industry, spatial planning and land use through:
co-ordination mechanisms to facilitate coherent policies across ministries, public agencies and levels of government, including cross-sectoral plans;
co-ordinated management of use, protection and clean-up of water resources, taking into account policies that affect water availability, quality and demand as well as risk prevention;
identification of barriers to policy coherence from practices, policies and regulations within and beyond the water sector, using monitoring, reporting and reviews; and
incentives and regulations to mitigate conflicts among sectoral strategies, bringing these strategies into line with water management needs and finding solutions that fit with local governance and norms. Principle 10 addresses the involvement of stakeholders in that respect to take a good look at diversity of impacts and needs.
Policy coherence can help formulate policy options that optimise co-benefits across sectors, stakeholders and uses, such as between water quantity and quality management, and other important sectoral policies, such as land, energy, biodiversity, urban planning, health care, waste, construction, transport, and climate change. For example, increasing desalination to improve water security requires large amounts of energy and produces highly concentrated brine. Potential synergies among the sectors should be used to guide formulation of options to maximise gain, optimise positive impacts, and avoid negative impacts (OECD, 2017[10]). Table 1.3 provides examples of the potential positive and negative impacts from water quality interventions.
Table 1.3. Examples of water quality policies and impacts on other sectors
Source: (OECD, 2017[10]).
Ensuring access to water for all requires good governance
Managing and securing access to water for all is not only a question of resources, policies and infrastructure, but equally a matter of good governance. Poor governance can deprive large populations of the water services they need.
Water governance is defined as the “range of political, institutional and administrative rules, practices and processes (formal and informal) through which decisions are taken and implemented, stakeholders can articulate their interests and have their concerns considered, and decision makers are held accountable for water management” (OECD, 2015[21]). In other words, who does what, at which level and how (OECD, 2011[22]).
The OECD Multi-level Governance Framework identifies seven “gaps” to effective water policy design and implementation. They are intrinsically linked to, or exacerbated by, key features of the water sector (local and global, capital intensive, fragmented, monopolistic, etc.). They relate to the mismatch between administrative and hydrological boundaries (administrative gap), silos and fragmentation (policy gap), diverging rationales and objectives (objective gap), asymmetries of information (information gap), lack of capacity (capacity gap), insufficient resources (funding gap), as well as integrity and transparency (accountability gap) (OECD, 2016[23]).
Many of the challenges that the SDGs try to address cut across multiple scales, levels of government and policy areas. Water connects across sectors, places and people, as well as geographic and temporal scales. Water policy is strongly linked to multiple domains that are critical for sustainable development: health, environment, equality and equity, agriculture, energy, spatial planning, and poverty alleviation. To varying degrees, countries have decentralised water policy, resulting in a strong need for co-ordination to manage interdependencies across levels of government (OECD, 2011[22]) (OECD, 2012[24]). Assigning clear roles across all types of stakeholders and responsibilities across levels of government and coordination mechanisms is essential to ensure a whole-of-government approach so that water can contribute to the broader economic, social and environmental agenda (OECD, 2016[23]).
Viable policy responses to improve water governance would require specific conditions to be met. These include, amongst others: stakeholder engagement, well-designed regulatory frameworks, adequate and accessible information, and sufficient capacity, integrity and transparency. The OECD Principles on Water Governance (Box 1.3), welcomed by Ministers at the 2015 meeting of the Council at Ministerial level are reflected in Section VI of the Recommendation on Water. The Principles will guide the implementation of that Section of the Recommendation. They seek to enhance water governance systems to help manage “too much”, “too little” and “too polluted” water in a sustainable, integrated and inclusive way. The 12 Principles are organised around three dimensions of water governance: effectiveness, to define clear goals and achieve them; efficiency, to maximise the benefits of sustainable water management and welfare at the least cost to society; trust and engagement, to build public confidence and awareness and ensure inclusiveness of stakeholders through democratic legitimacy and fairness for society at large (OECD, 2015[21]). The OECD Principles have been developed through an inclusive process involving OECD Member countries and relevant non-OECD Members, as well as by more than 140 major stakeholder groups gathered in a global water governance initiative.
Box 1.3. Section VI of the OECD Recommendation on Water OECD Principles on Water Governance
Clearly allocate and distinguish roles and responsibilities for water policymaking, policy implementation, operational management and regulation, and foster co-ordination across these responsible authorities.
Manage water at the appropriate scale(s) within integrated basin governance systems to reflect local conditions, and foster co-ordination between the different scales.
Encourage policy coherence through effective cross-sectoral co-ordination, especially between policies for water and the environment, health, energy, agriculture, industry, spatial planning and land use.
Adapt the level of capacity of responsible authorities to the complexity of water challenges to be met, and to the set of competencies required to carry out their duties.
Produce, update, and share timely, consistent, comparable and policy-relevant water and water-related data and information, and use it to guide, assess and improve water policy.
Ensure that governance arrangements help mobilise water finance and allocate financial resources in an efficient, transparent and timely manner.
Ensure that sound water management regulatory frameworks are effectively implemented and enforced in pursuit of the public interest.
Promote the adoption and implementation of innovative water governance practices across responsible authorities, levels of government and relevant stakeholders.
Mainstream integrity and transparency practices across water policies, water institutions and water governance frameworks for greater accountability and trust in decision making.
Promote stakeholder engagement for informed and outcome-oriented contributions to water policy design and implementation.
Encourage water governance frameworks that help manage trade-offs across water users, rural and urban areas, and generations.
Promote regular monitoring and evaluation of water policy and governance where appropriate, share the results with the public and make adjustments when needed.
Source: (OECD, 2015[21]).
Engaging stakeholders is crucial to support effective implementation of water policy
Given the size and nature of water challenges, tackling them requires a co-ordinated effort among policy makers and stakeholders. (OECD, 2015[25]). Stakeholder engagement is needed to achieve common objectives, identify preferences, needs and desired outcomes, provide a constructive means for collective decision making about sharing the risks, costs and benefits, and encourage buy-in and compliance with implemented policies. Stakeholder engagement is also required for policy integration, harmonisation, and governance to build synergies and generate co-benefits across sectors and public‑private and public-public partnerships (OECD, 2017[10]). To guide public action in that direction, the OECD has developed a set of overarching Principles on Stakeholder Engagement in Water Governance (Table 1.4) intended as a standard for governments to follow when designing water policy and projects. Principle 10 on “promoting stakeholder engagement for informed and outcome-oriented contributions to water policy design and implementation” frames the participatory angle within the OECD Principles on Water Governance (OECD, 2015[25]).
Table 1.4. OECD Principles on Stakeholder Engagement in Water Governance
Source: (OECD, 2017[10]); (OECD, 2015[25]).
Goal 7: Affordable, reliable, sustainable and modern energy for all
Energy is essential for humanity to develop and thrive. It is central to poverty eradication and economic growth. At the same time, energy production from fossil fuels is the world’s primary source of greenhouse-gas (GHG) and air pollutant emissions. Access to modern, affordable (i.e. at a price that does not prohibit use), and reliable (usable for most of the time) forms of energy is a prerequisite for sustainable development. It is a key priority for countries where universal access has yet to be achieved and on the international agenda. This has been emphasised in two major global agreements adopted in 2015: the 2030 Agenda with its Sustainable Development Goals, which include a standalone goal on energy (SDG 7), and the Paris Agreement on climate change, which acknowledges the need to promote universal access to sustainable energy, particularly in Africa. SDG 7 calls on all countries to ensure access to affordable, reliable, sustainable, and modern energy for all (Box 1.4).
Box 1.4. SDG 7: Ensure access to affordable, reliable, sustainable and modern energy for all.
7.1 By 2030, ensure universal access to affordable, reliable and modern energy services.
7.2 By 2030, increase substantially the share of renewable energy in the global energy mix.
7.3 By 2030, double the global rate of improvement in energy efficiency.
Targets on means of implementation
7.a By 2030, enhance international cooperation to facilitate access to clean energy research and technology, including renewable energy, energy efficiency and advanced and cleaner fossil-fuel technology, and promote investment in energy infrastructure and clean energy technology.
7.b By 2030, expand infrastructure and upgrade technology for supplying modern and sustainable energy services for all in developing countries, in particular least developed countries, small island developing States, and land-locked developing countries, in accordance with their respective programmes of support.
Source: (UNGA, 2015[4]).
Energy challenges
In 2016, around 86% of the world’s population had access to electricity. In the same year, according to IEA estimates, the number of people without access fell to 1.1 billion people for the first time, with nearly 1.2 billion people having gained access since 2000. This means that 14% of the world’s population, predominantly rural dwellers, still lack access to electricity.
Recent global progress has been driven largely by developing Asia, where 870 million gained access since 2000. Sub-Saharan Africa remains the region with the greatest concentration of energy poverty, with 58% of the population, 600 million people, lacking access to electricity. Urban areas in sub-Saharan Africa have 71% access (14 countries have an urban access rate of below 50%), and only around 22% of rural residents benefit from this service (IEA, 2017[26]). The urban-rural gap in many sub-Saharan African countries exceeds 50% (OECD, 2016[27]).
In some developing countries, there are many people above the poverty line but without access to electricity. This signals the existence of systemic impediments such as the lack of infrastructure and high cost of connection. In sub-Saharan Africa, at least 120 million people are living above the poverty line but are without electricity access, while in developing Asia, this number is 70 million (IEA, 2017[26]). According to IEA, in many developing countries, access is often unreliable even when households have it. Providing universal energy access for households, however, is not enough to ensure sustainable development. Energy also needs to be available for productive uses such as agriculture, industry and commercial activity to help achieve all SDGs.
Access to clean cooking is essential to simultaneously improving livelihoods, reducing the burden of disease from household air pollution, empowering women, and protecting the environment. Latest IEA estimates show that today about 2.8 billion people still lack access to clean cooking, and progress has not been keeping pace with strong population growth in developing countries. This is particularly the case in sub-Saharan Africa, where the number of people relying on biomass for cooking has grown by 400 million since 2000 (IEA, 2017[26]). IEA also estimates that more than half of the global population lacking clean cooking access lives in Asia, particularly India, where 834 million people still lack access. The problem is also acute in sub-Saharan Africa, where more than 80% of the population cooks with biomass using traditional methods (IEA, 2017[28]). The smoky environments caused by the use of solid biomass in households are a major health hazard that leads to about 2.8 million premature deaths per year (IEA, 2016[16]).
The IEA projection for access to clean cooking shows that the world is far from being on track to meeting the SDG target 7.1 by 2030. In the IEA New Policies Scenario (i.e. with current and planned policies),1 2.3 billion people are projected to remain without access to clean cooking facilities. Developing countries in Asia, despite reaching almost universal electrification, still have more than 1.3 billion people without clean cooking access in 2030, around one-third of the population at that time. Even in China, where universal electrification is already complete, around 450 million people still rely on the traditional use of biomass for cooking today and this number only falls to 247 million people in 2030. In sub-Saharan Africa, the number of people without access is projected to increase by 2030, to over 900 million (IEA, 2017[26]).
The transition to modern energy use is a challenging one. Use of modern energy services beyond very basic needs requires those services to be technically available, affordable (i.e. at a price that does not prohibit use), adequate (i.e. sufficient supply and quality of supply), acceptable (in line with historical or cultural factors) and reliable (usable for most of the time). Even in countries that have achieved universal access to energy, such as in most high-income countries, the quality and affordability of access often remains a challenge (IEA, 2017[26]). Furthermore, a transition towards modern energy requires containing the adverse environmental effects from energy use, including carbon emissions and local air pollutants, either by substituting towards less polluting forms of energy or by lowering the demand for energy overall (OECD, 2016[29]).
The efficient use of energy resources is a prerequisite for achieving several of the SDGs. It is central for achieving sustainable economic growth (SDG 8), building sustainable cities (SDG 11), ensuring sustainable consumption and production patterns (SDG 12) and combating climate change (SDG 13). In 2016, global energy intensity, a measure of the amount of primary energy demand needed to produce one unit of GDP, decreased by 2.0% (IEA, 2017[28]). Overall progress towards reducing energy intensity has slowed, according to IEA, if compared to the 2.8% reduction in 2015 progress. Part of the reduction in energy intensity was due to changes in the global economy: for example, production of steel and cement fell by 2-3% in 2015, mainly because of developments in China (IEA, 2016[16]). The 2017 UN Report on progress towards the SDGs, estimates that global progress is still not sufficient to meet the target of doubling the global rate of improvement in energy efficiency (UN ECOSOC, 2017[7]).
IEA projects that in the long term all world regions will improve in the energy intensity of GDP. China is projected to improve energy intensity by 3.5% per year on average from 2014 to 2040, followed by India, with an average annual improvement of 3.0%. Energy intensity at the world level will drop by more than 60% by 2040, compared with 2014, but will fall short of the SDG 7 in 2030: the target is 2.1% average annual improvement in the period 2010-2030, while the IEA New Policies Scenario estimates only 1.9% per year in the same period. Although the difference is small, the extra effort needed to reach the SDG 7.3 target is significant and will require stringent energy efficiency measures in all world regions (IEA, 2016[16]).
Renewable energy is fundamental for the transition to a less carbon-intense and more sustainable energy systems. According to the 2017 OECD Green Growth Indicators, new investment flows in renewable energy, both domestic and international, have more than quadrupled since 2005 (Figure 1.3). In 2015, most funds were invested in projects related to wind (38%) and solar (56%) energy. Investment in electricity generation from renewable sources at the global level has surpassed investment in fossil fuel technology, mainly due to falling cost of wind and solar photovoltaics (OECD, 2017[3]). The challenge is to increase reliance on renewable energy in the heat and transport sectors, which account for the bulk of global energy consumption. Despite advances in technology and falling prices in the electricity sector the gains in the energy mix are a fraction of what is needed to meet SDG 7.2 (IEA and the World Bank, 2017[30]).
Figure 1.3. Investment by renewable energy sector
Source: (OECD, 2017[3]).
Key interactions with other sustainable development goals
The importance of energy is not confined to SDG 7. Energy is also either explicitly or implicitly included in other SDGs as highlighted by the IEA’s World Energy Outlook 2017. SDG 3, for example, includes a target to reduce premature deaths from household air pollution (for which lack of access to clean cooking is a primary cause); SDG 11 includes targets on climate change adaptation and mitigation for cities and human settlements; SDG 12 has a target that aims at reducing harmful and inefficient fossil-fuel subsidies; and SDG 13 aims at taking urgent action to combat climate change.
Action for ensuring universal energy access is also a requirement for achieving other SDGs. For example, a lack of access to modern energy can make it difficult or impossible for a country to confront the numerous challenges that it faces, such as eradicating poverty (SDG 1) for some poor households, a large share of their income may be directed towards low quality and often expensive energy sources such as kerosene. The same is true for delivering quality education (SDG 4). More than 90 million primary school-aged children in sub-Saharan Africa go to a school that lacks electricity, hampering their education and their future economic prospects (IEA, 2017[26]). Some of the key interlinkages between SDG 7 on energy and other SDGs are highlighted in Table 1.5.
Table 1.5. SDG 7 on Energy as prerequisite for achieving the Sustainable Development Goals
Source: Adapted from (ICSU, 2017[31]).
There are strong linkages between SDG 7 on energy, SDG 13 on climate change, SDG 3 on health (air pollution) and SDG 11 on cities. The links between these interrelated areas are also considered in the Paris Agreement, whose objective to strengthen the global response to the threat of climate change is explicitly framed in the context of sustainable development and efforts to eradicate poverty (IEA, 2017[28]). The IEA’s World Energy Outlook 2017 has introduced a new integrated approach – the Sustainable Development Scenario – to energy and sustainable development which provides a benchmark for measuring progress towards three SDGs that are closely related to energy: SDG 13, SDG 3 and SDG 11 (Box 1.5).
Box 1.5. The IEA Sustainable Development Scenario: Integrating climate, air pollution and universal energy access
The IEA’s World Energy Outlook 2017 (WEO 2017) introduces a Sustainable Development Scenario’ which offers an integrated approach to achieve key interrelated SDGs: to address climate change (SDG 13) while also tackling air pollution and thereby contributing to health (SDG 3.9) and achieving universal energy access (SDG 7.1). Unlike other scenarios in the WEO 2017, which track current and planned policies, the Sustainable Development Scenario starts from a set of desired outcomes and considers what would be necessary to deliver them. Central to these outcomes is the achievement of an early peak in CO2 emissions and a subsequent rapid decline, consistent with the Paris Agreement.
In the Sustainable Development Scenario:
Universal access to electricity and clean cooking can be reached at least cost without threatening the achievement of climate target, and with substantial air pollution benefits.
The 2030 targets for renewables and efficiency that are defined in SDG 7 are met or exceeded.
The share of low-carbon sources in the energy mix doubles to 40% in 2040, all avenues to improve efficiency are pursued, coal demand goes into an immediate decline and oil consumption peaks soon thereafter.
Power generation is all but decarbonised, relying by 2040 on generation from renewables (over 60%), nuclear power (15%) as well as a contribution from carbon capture and storage (6%) – a technology that plays an equally significant role in cutting emissions from the industry sector.
Electric cars move into the mainstream quickly, but decarbonising the transport sector also requires much more stringent efficiency measures across the board, notably for road freight.
Source: (IEA, 2017[28]).
Action on one of these goals can support the achievement of another. For example, the universal provision of clean cooking facilities means a comprehensive shift away from the traditional use of solid biomass as a cooking fuel, and thereby also removes the main cause of household energy-related air pollution. Ending the traditional use of biomass for cooking also reduces GHG emissions, even when replaced by liquefied petroleum gas (LPG), therefore creating a net climate benefit. Another important synergy between SDG targets includes the provision of renewables, especially decentralised solar, as the least-cost option for delivering universal electricity access with co-benefits for climate and air pollution. The climate requirements to deploy more efficient technologies and to reduce reliance on energy from fuel combustion – including through clean electrification of end‑uses – have co-benefits in terms of lower pollutant emissions (IEA, 2017[28]). This can also support the achievement of targets related to health (SDG 3.9), given that an estimated 2.8 million premature deaths per year are due to a reliance on solid biomass and coal for cooking and the use of candles, kerosene and other polluting fuels for lighting (IEA, 2017[26]). There is a clear need to shift towards integrated policy making. Focussing on a specific goal in isolation might risk a lock-in of energy sector pathways that impede the achievement of other goals, or at least makes their attainment more expensive or more difficult (IEA, 2017[28]).
Integrated approaches to energy and water are essential to realise a range of sustainable development goals
Most of the weaknesses in the global energy system related to energy access, energy security or the environmental impacts of energy use, can be exacerbated by changes in water availability, variability and predictability (OECD, 2016[12]). Managing energy‑water linkages is essential to ensure that the development of one sector does not have unintended consequences for the other. There are several connections between the goals on clean water and sanitation (SDG 6) and affordable and clean energy (SDG 7) that, if managed well, can help with the attainment of both sets of targets. There are also many economically viable opportunities for energy and water savings that can relieve pressures on both systems, if considered in an integrated manner.
The provision of energy subsidies to farmers, for example, can have the unintended consequence of encouraging farmers to use water inefficiently and pump aquifers at an unsustainable rate. In addition to concerns about water quantity, there are also concerns about the impact on quality, due to the potential run-off of effluent, which can contain high levels of fertilisers and pesticides, and soil erosion which can pollute waterways. Similarly, efforts to shift towards a lower carbon pathway and tackle climate change could exacerbate water stress in some cases, or be limited by water availability. Some technologies, such as wind and solar photovoltaic (PV), require little water; but the more a decarbonisation pathway relies on biofuels the more water it consumes. As a result, despite lower energy demand, water consumption would increase (IEA, 2016[16]).
Providing electricity access to a region can vastly enhance agricultural productivity through irrigation, mechanisation and refrigeration - increasing food security, and livelihoods/economic growth, and reducing climate vulnerability.
Energy is crucial for cities
The level and type of energy cities use affect not only the economy, the environment and the well-being of their citizens but also that of residents elsewhere. Cities mainly depend on fossil fuels, and they both cause and suffer from their negative effects including air pollution, congestion and noise. It is estimated that approximately 71% of global energy-related emissions of carbon dioxide are caused by energy use in cities. Cities’ demand for energy is increasing, and fluctuations in energy prices impact on citizens as well as industrial activity. Any disruption of the energy supply can affect large numbers of the population, as well as production through supply chains. Energy consumption in cities is expected to continue to increase as the urban population increases. Overcoming these challenges would require, first, enhancing the cities’ energy management to improve energy efficiency and to reduce energy consumption. Second, it would entail reducing the dependence on fossil fuel by deploying renewable energy in cities (Sugahara and Bermont, 2016[32]).
Policy and governance responses
An IEA projection indicates that the provision of electricity and clean cooking for all would require USD 786 billion in cumulative investment in the period to 2030. This would mean an additional USD 31 billion per year on top of the USD 25 billion per year projected under the IEA New Policies Scenario, with sub-Saharan Africa accounting for the largest share of additional investment, followed by developing Asia. Providing energy for all requires scaling-up in financing from a range of sources, including development banks, governments, bilateral development assistance as well as the private sector and especially long-term investors with large available funds. The private sector is increasingly engaged, and new business models and creative partnerships are increasing the pool of potential investment for projects from large-scale infrastructure to targeted micro schemes (IEA, 2017[26]).
In many cases several obstacles still hamper investment in renewable energy. These obstacles result from market and government failures – including fossil fuel subsidies as well as barriers to international trade and investment. A key challenge to catalyse investment flows in clean energy is to design and implement clear and predictable domestic policy frameworks (OECD, 2015[33]). The OECD Policy Guidance for Investment in Clean Energy Infrastructure provides governments with a tool to identify ways to engage private enterprises in financing and developing clean energy infrastructure. It also provides policy makers with checklist to consider for enhancing private investment in clean energy infrastructure, including in electricity generation from renewable energy sources and improved energy efficiency in the electricity sector, particularly in five key areas: investment policy; investment promotion and facilitation; competition policy; financial market policy; and public governance. It also addresses cross-cutting issues, such as regional cooperation for promoting clean energy infrastructure (OECD, 2015[33]).
Additional investments alone will not be sufficient. Strategies to achieve SDG 7 and deliver universal access need to be tailored to local conditions and underpinned by firm political commitments, supportive enabling and regulatory frameworks, removal of misalignments (aligning policies for a low-carbon transition) and obstacles in the political economy, engagement with the private sector, appropriate financing options and investment, capacity building and close consultation from the outset with local communities, especially women. While each country will take a different way to achieve SDG 7 and ensure energy for all, there are some general lessons from experience which can help in the process. Box 1.6 summarises some of these lessons.
Box 1.6. Achieving affordable and clean energy for all by 2030, some lessons learnt
IEA analysis highlights key actions that can help ensure “no one is left behind” – the imperative of the Sustainable Development Goals:
Implement policies that encourage a wide range of solutions and business models, avoiding barriers to new entrants. Where progress has occurred, it is because policies have been clear and consistent, encouraged cost-effective investment from a wide range of financial streams and engaged a wide range of stakeholders, including the local community.
Facilitate rural electricity access by creating suitable conditions for off-grid investment, and by making provision for subsequent connection of decentralised solutions to the grid. On-grid and decentralised solutions are complementary, and their relative share depends on a country’s circumstances. Co-ordinated, flexible planning that encourages investment in both and makes provision to integrate them is the quickest and most resilient way to achieve access for all.
Make energy efficiency an integral part of energy access policies. Efficient appliances and lighting, such as light-emitting diodes (LEDs), enable consumers to access more energy services for lower overall investment. It also facilitates the uptake of new business models and improves the affordability of off-grid solutions.
Take a holistic approach and include productive uses in energy access policies and targets. Electrification strategies should take into account other development goals and opportunities to use energy access to stimulate economic activity and create jobs in addition to household electrification. Actions taken to achieve energy for all can complement those taken to address climate change.
Encourage a shift to clean cooking. Despite the scope of the challenge, access to clean cooking receives less attention than access to electricity. For people to move away from solid biomass, policies and programmes need to reflect local needs and expectations, account for social and cultural factors, clearly explain the health risks, and empower decision makers in household cooking matters.
Source: (IEA, 2017[26]).
Pricing carbon emissions can be a powerful, cost-effective tool for steering producers and households towards low-carbon, less-polluting behaviour and investments. Carbon pricing provides countries with a low cost tool to effectively and gradually reduce emissions starting immediately. It can lead to substitution towards less polluting forms of energy and lower the demand for energy overall (OECD, 2016[29]). Any adverse impact on vulnerable population groups from taxes and higher prices could be addressed by targeted benefit schemes (Flues and van Dender, 2017[34]). However, current use of carbon pricing, via taxes or emissions trading systems, does not live up to its potential. 90% of carbon emissions from energy use across 41 countries are priced below a very conservative estimate of the climate cost of emissions (OECD, 2016[29]).
Goal 11: Make cities and human settlements inclusive, safe and sustainable
Cities are central for advancing sustainable and inclusive development. They are critical drivers of growth and well-being. They generate about 80% of global gross domestic product (GDP). Just 2% of OECD regions, mainly the largest OECD urban areas, generate roughly one-third of all growth in the OECD. In both India and China, the five largest cities’ economies contribute approximately 15% of national GDP (OECD, 2013[35]). Cities across the world also contribute to energy consumption, and thus to climate change. They account for an estimated 70% of global energy use and related greenhouse gas (GHG) emissions (OECD, 2017[36]). At the same time, Cities have a higher capacity than other parts of the country to push individuals up the income, education or jobs ladder, and therefore drive social mobility (OECD, 2016[1]).
Cities concentrate economic growth and inequalities. Income inequality, for instance, is higher in cities relative to the respective national average and tends to be higher in larger cities. Across a range of dimensions – health, housing, education, jobs – well-being outcomes vary considerably within and across cities. Local governments also have a hand in many of the policy areas that affect inclusion, sustainability and economic growth; depending on the country, cities may have some responsibilities relating to transport, land use, housing, education, workforce development, health care and other key public services, and many others. This means that cities can also be a key part of the solution to addressing challenges relating to inequality and sustainability.
The 2030 Agenda for Sustainable Development recognises that cities and urban development are crucial to the quality of life of people. The stand-alone urban goal (SDG 11) highlights the role of cities as drivers of sustainable development and in the achievement of SDGs (Box 1.7), although the 2030 Agenda was not designed specifically for or by them. Indeed, most underlying policies and investments are a shared responsibility across levels of government and it is estimated that 65% of the 169 targets underlying the 17 SDGs will not be reached without proper engagement of, and coordination with, local and regional governments (SDSN, 2016[37]). For example, subnational governments were responsible for 59.3% of total public investment in 2015 throughout the OECD area and for almost 40% worldwide (OECD/UCLG, 2016[38]). Most of such investments are related to infrastructure for basic services over which cities and/or regions have core competences, and which are sometimes the subject of dedicated SDGs (e.g. education, health, social infrastructure, drinking water, sanitation, solid waste management, transport, and housing).
Box 1.7. SDG 11: Make cities and human settlements inclusive, safe, resilient and sustainable.
11.1 By 2030, ensure access for all to adequate, safe and affordable housing and basic services and upgrade slums.
11.2 By 2030, provide access to safe, affordable, accessible and sustainable transport systems for all, improving road safety, notably by expanding public transport, with special attention to the needs of those in vulnerable situations, women, children, persons with disabilities and older persons.
11.3 By 2030, enhance inclusive and sustainable urbanization and capacity for participatory, integrated and sustainable human settlement planning and management in all countries.
11.4 Strengthen efforts to protect and safeguard the world’s cultural and natural heritage.
11.5 By 2030, significantly reduce the number of deaths and the number of people affected and substantially decrease the direct economic losses relative to global gross domestic product caused by disasters, including water-related disasters, with a focus on protecting the poor and people in vulnerable situations.
11.6 By 2030, reduce the adverse per capita environmental impact of cities, including by paying special attention to air quality and municipal and other waste management.
11.7 By 2030, provide universal access to safe, inclusive and accessible, green and public spaces, in particular for women and children, older persons and persons with disabilities.
Targets on means of implementation
11.a Support positive economic, social and environmental links between urban, per-urban and rural areas by strengthening national and regional development planning.
11.b By 2020, substantially increase the number of cities and human settlements adopting and implementing integrated policies and plans towards inclusion, resource efficiency, mitigation and adaptation to climate change, resilience to disasters, and develop and implement, in line with the Sendai Framework for Disaster Risk Reduction 2015-2030, holistic disaster risk management at all levels.
11.c Support least developed countries, including through financial and technical assistance, in building sustainable and resilient buildings utilizing local materials.
Source: (UNGA, 2015[4]).
The urbanisation challenge
The world’s population is increasingly urbanised (Figure 1.4). In 1970, 1.3 billion people, or 36% of the world population, lived in urban areas. By 2009 that share had reached 50% (OECD, 2012[14]). In 2015, close to 4 billion people — 54% of the world’s population — lived in cities (UN ECOSOC, 2017[7]). This trend is expected to continue, reaching 60% in 2030, and nearly 70% in 2050 (OECD, 2012[14]). The increase in absolute numbers to 2050 is 2.8 billion, which implies that the total world population growth between 2010 and 2050 (more than 2.2 billion people) would be completely absorbed by urban areas. Rural population is projected to decrease by 0.6 billion people over the same period. Within 150 years, the urban population will have increased from less than 1 billion in 1950 to 9 billion by 2100 (OECD, 2015[39]).
Figure 1.4. Urban population by region, 1970-2050
Source: (OECD, 2012[14]).
Across OECD countries, metropolitan areas (defined as urban agglomerations with more than 500 000 inhabitants) cover only 4% of the land, but account for roughly half of the population. Asian OECD countries are particularly urbanised, with roughly 80% of the population living in urban agglomerations and around 70% of the population living in metropolitan areas. In Latin America, urbanisation levels are at around 80%. The share of urban population in OECD countries is projected to be about 86% of total population by 2050 (OECD, 2015[39]).
Africa has the highest current rate of urbanisation globally, although it remains the least urbanised region of the world (OECD, 2015[39]). The share of urban residents has increased from 14% in 1950 to 40% today. By the mid-2030s, 50% of Africans are expected to become urban dwellers (Figure 1.5). Urbanisation is likely to continue and level off at about 56% around 2050 (AfDB/OECD/UNDP, 2016[40]). In Sub-Saharan Africa, urban dwellers accounted for about 37% of the total population in 2010 – however, their share is projected to reach 60% by 2050 (OECD, 2012[14]).
Figure 1.5. Growth trends in Africa’s urban, rural and total population, 1950-2050
Source: (AfDB/OECD/UNDP, 2016[40]).
Rapid urbanization is bringing about challenges and opportunities. Some of the major challenges include: growing numbers of slum dwellers; uncontrolled urban sprawl; inadequate basic services and infrastructure; and outmoded transport systems which exacerbates pollution and associated environmental risks as well as socio-economic costs, making cities more vulnerable to disasters. Urban slums – with substandard housing and inadequate water, sanitation and waste management services – have negative consequences for human health and the environment. This could become magnified with further urbanisation unless more ambitious urban development and environmental management policies are put in place. This is especially so as the number of people living in slums could grow, despite the projected increase in average GDP levels (OECD, 2012[14]).
The proportion of the urban population that lives in developing country slums fell from 39% in 2000 to 30% in 2014 (UN ECOSOC, 2017[7]). Despite some gains, the absolute number of urban residents who live in slums continued to grow, owing in part to accelerating urbanization, population growth and lack of appropriate land and housing policies. Globally, an estimated 880 million people (urban residents) were living in slums in 2014 compared with 792 million in 2000 (UN ECOSOC, 2016[6]). In Africa 62% of people live in slum conditions without access to clean water, sanitation, education, and social services. The absolute number of the world’s slum population has been rising over the past 25 years, from 650 million in 1990 to nearly 1 billion today (Clos, 2016[41]). Many African countries face a real risk of tripling their slum population by 2050 (AfDB/OECD/UNDP, 2016[40]).
From 2000 to 2015, in all regions of the world, the expansion of urban land outpaced the growth of urban populations. As a result, cities are becoming less dense as they grow, with unplanned urban sprawl (UN ECOSOC, 2017[7]). Uncontrolled urban sprawl is undermining some of the key determinants of sustainable development. For example, for every 10% increase in sprawl, there is a 5.7% increase in per capita CO2 emissions (UN ECOSOC, 2016[6]). Cities in many OECD countries are sprawling – that is, the growth in the built-up area has outpaced the population growth. Across all OECD countries built-up areas now cover 1.11% of the total land area, a 30% increase since 1990 (Figure 1.6) (OECD, 2017[3]).
Figure 1.6. Built-up area per capita is increasing, including countries that are already very urbanised, 1990-2014
Source: (OECD, 2017[42]).
The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law.
The expected growing pace of urbanisation has positive and negative consequences. With the concentration of economic activities in urban areas, urbanisation can lead to higher economic growth. Conversely, a greater concentration of economic activities can also cause higher levels of exposure to outdoor air pollution and could worsen environmental conditions in slums, with serious consequences for human health (OECD, 2012[14]).
Air pollution is a major environmental health risk worldwide, particularly in big cities and highly populated areas. Outdoor air pollution has consequences for the environment, with impacts on crop yields, biodiversity, land and water, and on human activities, with impacts on visibility and on buildings and materials, including cultural heritage. These negative impacts lead to high economic costs. The cost of the health impacts of air pollution in OECD countries (including deaths and illness) was USD 1.7 trillion in 2010. The cost of the health impact of air pollution in 2010 was estimated to be USD 1.4 trillion in China, and USD 0.5 trillion in India (OECD, 2016[43]).
Air pollution is mainly a “city issue”. In 2014, 9 of 10 people who live in cities were breathing air that did not comply with the safety standard set by the World Health Organization (WHO), according to the last Report on progress towards the SDGs (UN ECOSOC, 2017[7]). In same year, around half the global urban population was exposed to air pollution levels at least 2.5 times higher than maximum standards set by the WHO (UN ECOSOC, 2016[6]). Around 98% of cities in low- and middle income countries and 56% of cities in high-income countries do not meet WHO air quality guidelines (OECD, 2016[43]).
Outdoor air pollution is the cause of more than 4.4 million premature deaths per year at global level (OECD, 2017[3]). It is estimated that Outdoor air pollution could cause 6 to 9 million premature deaths a year by 2060 and cost 1% of global GDP – around USD 2.6 trillion annually. By 2060 the number of premature deaths from dirty air could double, or even triple, according to OECD projections – this means one premature death every four or five seconds (OECD, 2016[43]). India and China are projected to have an extremely high number of premature deaths per million people, while Africa, Oceania and Latin America are by contrast the regions with the lowest number of premature deaths per million people (Figure 1.7).
Figure 1.7. Premature deaths from exposure to particulate matter and ozone
Source: (OECD, 2016[43]).
Income inequality – which has been rising in the last decades – is higher, on average, in cities than in their respective countries. Moreover, the larger the city, the greater is its income inequality. Copenhagen, Brussels, Paris and Santiago all record the highest Gini coefficients in their respective countries (OECD, 2016[44]). Where people live in a city has an important impact on well-being, as much as or more so than their income. Life expectancies, for example, differ by a staggering 20 years across neighbourhoods in Baltimore and London. When income, jobs and health are considered together, differences in overall living standards in the different places within a country are starker than those in terms of income only, showing that different well-being outcomes amplify the concentration of prosperity or exclusion in regions (OECD, 2016[44]).
Moreover, cities are split across economic lines, which may reproduce disadvantages across generations. Residential segregation – in which individuals with shared characteristics, such as income level, race or ethnicity, are spatially concentrated – has been increasing in many OECD countries over the past decades, though the trends, challenges and drivers differ across countries (OECD, 2016[44]). OECD evidence finds that the most income segregated cities in the Netherlands and France are at comparable levels to the least segregated cities in the United States (OECD, 2016[44]). People living in disadvantaged areas often have lower quality public services, which undermines opportunities. These disadvantages can weigh on future generations and limit social mobility. Evidence suggests that transport plays a crucial role in this regard: a lack of, or poor access to, transport options is central to limitations on access to jobs, educational institutions, health facilities and social networks, which in turn can generate a “poverty trap” (ITF, 2017[45]).
The role of cities and key interactions with other sustainable development goals
Cities need to address the SDGs holistically. With populations increasingly urbanised, achieving the SDGs within cities will significantly contribute to reaching these goals on a broader national scale. The SDGs are tackling intimately interconnected problems where the particular conditions in a place matter. For example, sustainable and integrated urbanisation processes will have important implications for CO2 emissions. Improved rural development has considerable benefits for food security in rural areas. Focusing on targets in a single-minded way ignores both the compounded benefits of joint action as well as the potentially perverse effects of supporting one target in a way that detracts from success in another target (OECD, 2016[46]). Cities, therefore, should address the SDGs as a framework of highly interconnected and interdependent goals that require high degrees of policy coherence and in which all levels of government and society are actively involved.
The role of cities in achieving the SDGs goes beyond SDG 11. Cities can and should play a role to address all the 17 goals. Some cities and regions are already moving towards this direction and have started working on the localisation of the SDGs (two interesting examples include New York and Medellin). Despite these initiatives, there is a significant lack of a coordinated and coherent action across and within OECD and partner countries able to support in a more systematic fashion cities (in particular medium and small size municipalities) that are willing to use the 2030 Agenda to guide their policy making, planning and investment strategies.
Integrated water management in cities will significantly contribute to the global goal on water
The Sustainable Development Goals (SDGs) call for action in relation to water management in cities, as reflected in SDG 6 and SDG11. As cities will be increasingly exposed to the risks of “too much” (e.g. floods), “too little” (scarcity and droughts) and “too polluted” water over the coming years, developing governance frameworks that can foster greater resilience and help adapt to changing circumstances is particularly important for cities to prepare for the future (OECD, 2016[23]).
In several countries, urbanisation has contributed to water pollution and scarcity. Between 1960 and 2000, the rate of groundwater depletion more than doubled, reaching over 280 km3 per year worldwide. Groundwater depletion could become the greatest threat to urban water supplies in several regions in the coming decades, resulting in potential high replacement costs to secure alternative sources of water (OECD, 2017[47]). The impact of large cities on pollution and ground water levels has been determined by population growth and the quality of water management in the respective areas. Fragmentation in water policy has resulted in co-ordination problems in water governance, which have a large share of responsibility for observed degradations.
Water quality has also suffered from bad sanitation systems and insufficient wastewater clearing. Wastewater in many cities is still flowing untreated into groundwater, rivers and coastlines. In developing countries, up to 90% of all wastewater is released in an untreated form, leading to the spread of diseases such as cholera and typhoid. This reinforces water shortages as polluted water is not available for the supply of drinking water. However, while for some cities scarcity of water is a real problem, as available water resources have to be brought over fairly long distances, problems with wastewater are not genuine to large cities per se, but simply result from bad policies and often lack of co-ordination (OECD, 2017[47]).
Cities play a central role in moving the sustainable energy agenda forward
Energy consumption in cities is primarily based on fossil fuels, and cities suffer from their negative environmental effects, including emissions of greenhouse gases (GHG) and air pollution. Energy demand in cities is projected to grow by 57% between 2006 and 2030. It is expected to account for 73% of the world’s energy consumption by 2030. Approximately 71% of global energy-related emissions of CO2 are caused by energy use in cities. The share of fossil fuels in urban energy demand was 86% in 2006, substantially higher than the 69% outside cities (Sugahara and Bermont, 2016[32]).
As energy demand in cities is projected to grow, strategies for sustainably managing energy in cities can contribute to the well-being of urban residents but also to achieving national energy policy objectives as well as energy goals at the global level, such as SDG 7. National governments as well as sub-national governments have a key role in developing and implementing coherent energy policies that achieve multiple objectives such as improving energy efficiency and reducing energy consumption; decreasing fossil fuel dependence by deploying renewable energy in cities; and managing energy with a view to build resilience and help cities anticipate and absorb shocks, as well as recover and adapt to the impact of chronic economic, environmental and social pressures.
Transport has a critical role in the global decarbonisation process
The rapid urbanisation will create substantial new demand for mobility in cities, making the provision of efficient, sustainable and equitable transport even more of a challenge. The combined effects of rapid urbanisation, income growth and rising private vehicle ownership will result in a surge in emissions, congestion and public health issues. Emissions from this sector keep on rising globally. At 7.5 billion tonnes in 2015, the sector represents 23% of fuel-burn CO2 emissions globally, or 18% of all man-made CO2 emissions. The higher efficiency of transport in developed economies does not compensate the much higher rate of travel and freight movements. On average, inhabitants of OECD countries emitted around 2.8 tonnes of CO2, whereas in non-OECD countries, emissions amounted to 0.5 tonnes. It is expected that the emissions in developing economies will rise to levels comparable with OECD countries (ITF, 2017[45]).
Energy used in road transport is effectively taxed at higher levels than in other sectors across 42 OECD and partner economies (OECD, 2016[29]; OECD, 2013[48]; OECD, 2015[49]) which generates useful revenue for government. Setting tax rates at a level that better reflects the external costs of energy, would mitigate negative environmental effects more effectively while raising additional revenue – also in developing economies.
Sustainable transport is implicit in seven of the 17 SDGs and is covered directly by five targets and indirectly by seven (Table 1.6). The targets are wide reaching and cover, among other issues, road safety (Target 3.6), enhancing the visibility, urgency and ambition of global road safety policy. This is essential as today over 1.2 million people die in road crashes every year, with millions more injured. Another target (11.2) highlights a profound change likely to transform urban passenger transport. Aiming to “provide access to safe, affordable, accessible and sustainable transport systems for all” by 2030, this target touches upon road safety, infrastructure development and the need to pay special attention to people in vulnerable situations, such as women, children, persons with disabilities and older persons. It underlines the need to shift the focus of policies and investment from time savings and transport demand to accessibility. Under this new paradigm, equal access for all to jobs, services and other opportunities takes precedence over small changes in travel times or passenger-kilometre numbers. This new approach deeply modifies the perceived role of transport infrastructure and services, as well as the policy appraisal process. These goals set a pathway for transforming the world’s mobility over the next 10 to 15 years (ITF, 2017[45]).
Policy and governance responses
With the projected increase in urban population, the way in which cities are planned and managed will have vast economic, social and environmental implications of crucial importance for achieving the SDGs. Making cities and human settlements inclusive, safe, resilient and sustainable, as called for by SDG 11, will require improving the planning, finance and management of cities. Locking in fragmented and unsustainable urban development patterns can have dramatic results economically, socially and environmentally. This can generate excessive contributions to global carbon emissions, inadequate water supply and sanitation, poor air quality, inefficient and car-dependent transport networks and, in many places, informal settlements and shanty towns, and thus affecting the achievement of many SDGs and targets (OECD, 2015[39]).
Developing National Urban Policies is essential to achieve local, national and global goals
A national urban policy (NUP) – defined as the coherent set of decisions from a government led process of co-ordinating various actors for a common vision that will promote more productive, inclusive and resilient urban development – has been recognised by the international community as an essential policy instrument to harness the dynamics of urbanisation in order to achieve national and global goals. An NUP does not replace local urban policies, but complements them to create the necessary conditions for sustainable urban development (OECD, 2017[50]). As of May 2017, 149 countries had a national-level urban policy in place or under development (UN ECOSOC, 2017[7]). Those countries are home to more than 75% of the world’s urban population.
The large majority of OECD countries with explicit NUPs are still in the early stages of the policy cycle: 33% are in the formulation stage and 33% are in the implementation stage. Only four countries have reached the monitoring and evaluation stage. These countries’ experiences could be useful for others seeking to strengthen their NUP processes. NUPs are developed, implemented, monitored and evaluated, mainly through co-ordination among different ministries; thus, effective mechanisms for interministerial co-ordination are essential for successful implementation. Collaboration across levels of government, the private sector, civil society and other stakeholders is crucial at different stages of NUP processes. The majority of the OECD countries have indeed taken a participatory approach, involving different stakeholders in the creation of their NUPs. However, much work remains to be done to increase the scope of NUP and in making it an explicit strategy. Such progress will be crucial to the achievement of SDGs and other global agreements, such as those relating to climate change (OECD, 2017[50]).
Aligning national and subnational priorities is essential to integrated implementation
The SDGs will not be achieved without the active engagement of a wide range of stakeholders, including the people living in the world’s cities. Metropolitan areas are critical to the economic prosperity of countries. OECD data show that regional and local governments play crucial roles in the well-being of today’s and future generations. For example, 70% of subnational government spending goes to education, health, economic affairs and social expenditures. As the level of government closest to the people, local governments are in a unique position to identify and respond to sustainable development gaps and needs. But aligning priorities between national and subnational governments and ensuring the capacities and resources needed for implementation remain critical challenges. The lack of co-ordination across sectors and levels of government, red tape, and excessive administrative procedures are the top challenges for infrastructure investment at the subnational level (OECD, 2016[51]).
Achieving many of the targets in the SDGs requires public and private investments at the sub-national level, particularly in urban areas: to improve access to sustainable urban services and infrastructure, to improve cities’ resilience to climate change and other economic, social and environmental shocks, and to prepare them to host a rapidly increasing urban population. The OECD Principles for Public Governance of Public‑Private Partnerships (PPPs) provide concrete guidance to maximise the potential for PPP projects including their appropriate use for the public interest. Similarly, the OECD Recommendation on Effective Public Investment Across Levels of Government can support governments in assessing the strengths and weaknesses of their public investment capacity and in setting priorities for improvement. The OECD is working with countries, regions and cities through place-specific studies with an implementation toolkit that gathers good practices, data and indicators.
A territorial approach to the SDGs can contribute to improve vertical and horizontal coordination in the implementation of the SDGs in cities. It can support place-based indicators that can underpin the production and disclosure of data as a tool for dialogue and learning to improve performance. A territorial approach to SDGs can also support the allocation and targeting of resources (fiscal, human, technical/infrastructure, etc.) to the most vulnerable groups and/or lagging regions. It can help improve the participation of local and regional authorities, as well as of grassroots communities, for greater accountability and outcomes in the achievement of SDGs. That is why the OECD has launched an initiative on A territorial approach to the Sustainable Development Goals: A role for cities and regions to leave no one behind which seeks to support cities and regions in “localising” the SDGs.
Goal 12: Responsible consumption and production
Changing patterns of consumption and production is central for sustainable development transformation. The way in which societies and economies produce and consume goods and services significantly affects the natural resources asset base from which economic development is achieved and human well-being is derived. Furthermore, the use of materials from natural resources in economic activities and related production and consumption processes have environmental, social and economic consequences that extend beyond borders of individual countries or regions, and that affect future generations. For example, the environmental pressures associated with extraction, processing, transport, use and disposal of materials which generate pollution and waste and adversely impact on the quality of air, soil and water with long-term implications.
The way natural resources and materials are managed and used throughout the economy is essential for sustainable development. Promoting sustainable consumption and production (SCP) depends on long-term economic growth that is coherent with social and environmental needs. A major challenge is to decouple economic growth from unsustainable resource use and environmental degradation, while ensuring that natural resources are preserved for the well-being of future generations. The importance of SCP as cross-cutting priority for international and national action is underlined in the 2030 Agenda with the inclusion of SDG 12, which calls on all countries to ensure sustainable consumption and production patterns (Box 1.8).
Box 1.8. SDG 12: Ensure sustainable consumption and production patterns.
12.1 Implement the 10-year framework of programmes on sustainable consumption and production, all countries taking action, with developed countries taking the lead, taking into account the development and capabilities of developing countries.
12.2 By 2030, achieve the sustainable management and efficient use of natural resources.
12.3 By 2030, halve per capita global food waste at the retail and consumer levels and reduce food losses along production and supply chains, including post-harvest losses.
12.4 By 2020, achieve the environmentally sound management of chemicals and all wastes throughout their life cycle, in accordance with agreed international frameworks, and significantly reduce their release to air, water and soil in order to minimize their adverse impacts on human health and the environment.
12.5 By 2030, substantially reduce waste generation through prevention, reduction, recycling and reuse.
12.6 Encourage companies, especially large and transnational companies, to adopt sustainable practices and to integrate sustainability information into their reporting cycle.
12.7 Promote public procurement practices that are sustainable, in accordance with national policies and priorities.
12.8 By 2030, ensure that people everywhere have the relevant information and awareness for sustainable development and lifestyles in harmony with nature
Targets on means of implementation
12.a Support developing countries to strengthen their scientific and technological capacity to move towards more sustainable patterns of consumption and production.
12.b Develop and implement tools to monitor sustainable development impacts for sustainable tourism that creates jobs and promotes local culture and products.
12.c Rationalize inefficient fossil-fuel subsidies that encourage wasteful consumption by removing market distortions, in accordance with national circumstances, including by restructuring taxation and phasing out those harmful subsidies, where they exist, to reflect their environmental impacts, taking fully into account the specific needs and conditions of developing countries and minimizing the possible adverse impacts on their development in a manner that protects the poor and the affected communities.
Source: (UNGA, 2015[4]).
Key challenges
The last decades have witnessed unprecedented growth in demand for raw materials worldwide. According to OECD estimates, the amount of materials from natural resources extracted and consumed worldwide reached nearly 72 billion metric tonnes (Gt) in 2010 (OECD, 2015[52]). This represents an estimated ten-fold increase since the early 1900s when extraction was estimated at around 7 Gt. The rapid industrialisation of emerging economies and continued high levels of material consumption in developed countries are among the main drivers of this increase. Construction materials, fossil fuels, and biomass for food account for 80% of total global material extraction (OECD, 2015[52]). OECD countries accounted for 27% of domestic extraction of used materials (DEU) worldwide in 2010 (compared with 46% in 1980), while the BRIICS countries (Brazil, Russia, India, Indonesia, China and South Africa) accounted for 51% (compared with 30% in1980) (OECD, 2015[52]).
Progress is being made in decoupling material extraction and consumption from economic growth, fundamental to advance sustainable development and to achieve the SDGs. The material productivity of the global economy improved by almost 30% between 1980 and 2010, rising from USD 0.70 per kilogram (in 2005 USD and PPPs) in 1980 to USD 1 per kg by 2010, according to OECD estimates (OECD, 2015[52]). This means that the global economy generated 30% more economic value with a kilogram of material resources in 2010 than in 1980. OECD countries generate 50% more economic value per unit of material resources used than in 1990 and 30% more than in 2000 (Figure 1.8). As OECD economies become more service-based, their reliance on imports is increasing with resource-intensive production often being displaced to non-OECD economies (OECD, 2015[52]).
Figure 1.8. Decoupling trends, OECD and world, 1980-2010
Source: (OECD, 2015[52]).
Although countries have made progress in improving resource productivity, material use per capita remains high. During the 1980s and the early 1990s per capita domestic material consumption (DMC) (DEU) remained stable around 8 tonnes per person per year, but has been rising over the last fifteen years. In 2010 per capita DMC reached over 10 tonnes per year, meaning that on average each person is using 29 kg of material resources per day, including 12 kg of construction minerals, 7 kg of biomass for food and feed, 5.3 kg of fossil energy carriers and 3 kg of metals. If unused domestic extraction (UDE) is included, per capita material use rose to nearly 17 tonnes per person per year in 2010 (46.6 kg per person per day), up from 13.6 tonnes in 1980.
According to the 2016 SDG progress report, domestic material consumption per capita increased in almost all developing regions from 2000 to 2010, except in Africa, where it remained relatively stable (around 4 tonnes per capita), and Oceania, where it decreased from around 10.7 to 7.7 tonnes per capita (UN ECOSOC, 2016[6]). An average person living in an OECD country consumes about 46 kg of materials per day (about 60% more than the world average), including 10 kg of biomass, 17 kg of construction minerals, 5kg of metals and about 13 kg of fossil fuels (OECD, 2015[52]).
With rising global demand for raw materials and economic growth, the amount of waste generated by economic activity is growing. It is estimated that about one fifth of the raw materials extracted worldwide end up as waste, and that OECD countries account for about one third of global waste generation (OECD, 2015[52]). The quantity of municipal waste generated in the OECD area exceeds an estimated 650 million tonnes. A person living in the OECD area generates on average 520 kg of waste per year; this is 20 kg more than in 1990, but 30 kg less than in 2000 (OECD, 2015[53]).
One of the growing waste streams is e-waste (electric and electronic waste), a management challenge in both developed and developing countries. Markets in electronic equipment change rapidly and the useful life of such appliances is constantly shrinking, resulting in an exponential growth in e-waste. Globally, some 50 million tonnes are estimated to be generated every year. This represents an important source of secondary raw materials for industry (OECD, 2015[52]).
Another important waste stream is food waste. The Food and Agriculture Organization of the United Nations (FAO) estimates that each year, approximately one-third of all food produced for human consumption in the world is lost or wasted (FAO, 2013[54]). Food losses and waste represent an obstacle for achieving SDG 2 on food security, and also are a major cause of energy loss in food supply (OECD, 2017[55]). Although reducing food waste in high income countries may not directly help tackle food insecurity in low income countries, it reduces competition on limited water, land and biodiversity resources; making these resources available for other uses (Bagherzadeh, Inamura and Jeong, 2014[56]). According to the FAO, the carbon footprint of food produced but not eaten is estimated to 3.3 billion tons of CO2. As such, food wastage ranks as the third top emitter after the United States and China (FAO, 2013[54]).
According to some estimates, over 30% of the fresh produce (fruit and vegetables) harvested in both developed and developing countries is lost. With the rate being highest (20%) in the retail, food service and consumer part of the system, whereas in developing countries the rate is highest in the distribution system from farmers to retail (22%). In Europe, the EU-28 produces around 88 million tonnes of food waste very year, at an estimated cost of EUR 143 billion, with 70% of the waste generated by consumers, retail and food service sectors, while 30% is generated by the processing and production sectors (OECD, 2017[55]). Increasing resource use efficiency and reducing food waste and food losses in the food chain can help increase the available food supply and reduce pressures on natural resources and the climate.
Decoupling CO2 and other GHG emissions growth from economic growth, and reduce the overall level of emissions is fundamental to shift towards sustainable consumption and production patterns. CO2 emissions from energy use are still growing worldwide, mainly due to increases in transport and energy sectors. In 2014, global energy-related CO2 emissions reached a record high of 32.38 billion tonnes, or 58% more than in 1990. Production-based emissions growth has decelerated in OECD countries in the wake of the 2008 financial crises. In BRIICS economies, emissions have continued to rise sharply. From the perspective of final demand, total emissions generated to satisfy domestic final demand in OECD countries have increased faster than emissions from domestic production. Most OECD countries are “net-importers” of CO2 emissions because these emissions from domestic final demand for goods and services exceed emissions from domestic production (OECD, 2017[3]).
The combustion of fossil fuels in power plants, vehicles, machinery and dwellings is responsible for the majority of global man-made greenhouse gas (GHG) emissions. CO2 from the combustion of fossil fuels and biomass account for 90% of total GHG emissions (OECD, 2017[3]). Governments in OECD and the six of the biggest emerging economies are spending collectively up to USD 200 billion a year subsidising extraction, refining and combustion of fossil fuels (OECD, 2015[57]). This represents more than what would be needed to meet the climate-finance objectives set by the international community, which call for mobilising USD 100 billion a year by 2020. Recent OECD and IEA analysis indicates that phasing-out fossil fuel subsidies across the globe could lead to a 3% reduction in global GHGs in 2020, compared with business-as-usual (OECD, 2017[55]).
Key interactions with other sustainable development goals
SDG 12 on responsible consumption and production has a key role to play in advancing the transformational vision of the 2030 Agenda. It can be considered one of the key drivers for transformation which sets out the essential requirements to ensure a sustainable management of resources, and to restore and preserve the natural asset base over time. Advancing SDG 12 entails addressing the major drivers of consumption and production that generate negative spillover effects for the environment and that put pressure on natural resources, ecosystems and biodiversity. It involves considering key interlinkages with all goal areas from poverty eradication to environmental protection. Table 1.7 highlights some of the potential interactions with other goals as well as the relevance of SDG 12 as a driver for transformation.
Resource efficiency is fundamental to transformation
Resource efficiency improvements through an approach of “reduce, reuse and recycle” can support the achievement of half of the SDGs. Since 1990, the global use of material resources has grown broadly in line with global GDP. Global material resource consumption is projected to double by 2050 (OECD, 2017[58]). The main challenge is to ensure that materials are used efficiently at all stages of their life cycle (extraction, transport, manufacturing, consumption, recovery and disposal) and throughout the supply chain. This can avoid waste of resources, reduce the associated negative environmental impacts (both upstream and downstream) and potentially decrease pressures on primary natural resources (OECD, 2017[3]).
Assessing the energy requirements and GHG emissions associated with the production, consumption and end-of-life management of materials requires taking a systems view of the production of goods and fuels, transportation of goods, crop and food production and storage the life-cycle. The life-cycle GHG emissions arising from material management activities were estimated to account for 55% to 65% of national emissions for four OECD member countries, suggesting significant potential to reduce emissions through material resource efficiency measures (OECD, 2017[58]). Resource efficiency is a key criterion for transitioning towards a more sustainable path which applies across the SDGs. Apart from SDG 12, eight SDGs include targets that refer directly to resource efficiency or sustainable use of resources (Table 1.7).
Improvements in water resource use efficiency and reduction of water pollution from agricultural systems and industry is critical for advancing several SDGs
Sustainable management of water in agriculture is critical to increase agricultural production, ensure water can be shared with other users and maintain the environmental and social benefits of water systems. Agriculture is the largest – and often inefficient – user and polluter of water resources in many regions. Farming accounts for around 70% of water abstraction, and over 40% in many OECD countries, and also contributes to water pollution from excess nutrients, pesticides and other pollutants. Agricultural regions in OECD have been affected by increasing water constraints in recent years. This trend is expected to continue. Projections reveal that agricultural production will have to rely on much less freshwater resources than before. It is also projected that farmers in many regions will face increasing competition from non-agricultural users due to rising urban population density and water demands from the energy and industry sectors. Water quality is also likely to deteriorate in many regions, due to the growth of polluting activities. These water challenges are expected to impact agriculture, undermining the productivity of rain-fed and irrigated crop and livestock activities in many regions, as well as further impacting markets, trade and broader food security (OECD, 2016[60]).
In industry, the use of water has multiple impacts on water quality. Large-scale manufacturing and mining can release trace elements and heavy metals such as mercury, zinc, and arsenic into the surrounding water. While such elements can occur naturally in water sources in very small amounts, even slightly elevated levels can be highly toxic. Industrial pollution can also lead to the acidification of water. Mining operations can lead to acid mine drainage whereby sulphate-containing rocks, exposed by the mine, react to form sulphuric acid when in contact with water. Similarly, sulphur dioxide, formed by the burning of fossil fuels, can dissolve in water and fall to the earth as acid rain. This can reduce the pH of lakes and rivers with disastrous consequences (OECD, 2013[8]).
Transformative change in the energy sector is needed to support economic development and prosperity, social imperatives and environmental needs
Energy production and use accounts for around two-thirds of all anthropogenic GHG emissions, mostly in the form of CO2. This reflects the energy sector’s heavy reliance on the combustion of fossil fuels (IEA/IRENA, 2017[61]). The transformation of the energy and industrial systems over the next decades is fundamental to achieving the Paris Agreement’s goal of well below 2oC as well as the SDGs. Gains in energy efficiency, as well as the expanded use of cleaner energy sources worldwide, are contributing to the decline in global energy intensity. This means that the world is able to produce more GDP for each unit of energy consumed.
The last few years have shown important improvements in relation to CO2 emissions. Despite an increase in global GDP of around 3% in 2016, IEA preliminary estimate of CO2 emissions in 2016 shows that emissions stayed flat for a third straight year, at just above 32 Gt. This is driven by a combination of market dynamics, technological improvements and policy initiatives, reflected in the increased proportion of electricity being generated from renewables and energy efficiency improvements (themselves targeted in SDG 7.2 and 7.3) (IEA, 2017[28]).
In 2016, according to IEA, the world would have used 12% more energy had it not been for energy efficiency improvements since 2000 – equivalent to adding another European Union to the global energy market. In emerging economies, energy efficiency gains have limited the increase in energy use associated with economic growth. Lower energy intensity, driven largely by efficiency improvements, is combining with the ongoing shift to renewables and other low-emission fuels to offset the impact of GDP growth on emissions (IEA, 2017[62]).
Fossil-fuel subsidies distort energy markets, promoting inefficient use of energy and increasing CO2 emissions
Fossil-fuel subsidies hamper efforts to curb emission, combat climate change and shift towards a cleaner and more efficient energy future (SDG 7). Government support to fossil fuel remains high: in 2014, for example, fossil-fuel consumption subsidies reached almost USD 500 billion. The value of global fossil-fuel consumption subsidies is estimated by the IEA to have since fallen, close to USD 310 billion in 2015, and USD 260 in 2016 reflecting lower fossil-fuel prices but also a subsidy reform process that has gathered momentum in several countries. Oil subsidies accounted for 40% of the total (USD 105 billion), covering an estimated 11% of global oil consumption), while electricity subsidies became the largest at USD 107 billion (covering 16% of global electricity use). Natural gas consumption subsidies were also significant, amounting to nearly USD 50 billion (affecting the price paid for 22% of gas consumption). Coal consumption subsides were relatively small, at USD 2 billion in 2016 (IEA, 2017[28]).
Subsidies to fossil-fuel consumers often fail to meet their intended objectives of: alleviating energy poverty or promoting economic development and, instead, promote the wasteful use of energy; contribute to price volatility by blurring market signals; encourage fuel smuggling and undermine the competitiveness of renewables and energy-efficient technologies. Such subsidies can have economic costs by distorting trade and competitiveness; environmental costs through overuse of natural resources and carbon emissions that spill over globally; re-distributional costs when those subsidies benefit primarily the better off at the expense of the poor; and health impacts affecting livelihoods. In addition, fossil fuel subsidies are sometimes provided in conjunction with incentives that promote the use of renewable energies, thereby undermining policy coherence and sending confusing signals to producers. Phasing out fossil-fuel subsidies would reduce GHG emissions and provide an impetus for investment, growth and jobs in renewable energy and energy efficiency (OECD, 2017[55]). A fuel subsidy reform could also offer fiscal space to extend social programmes targeted specifically to the poor and deliver results to leave no one behind.
Policy and governance responses
Strengthening public procurement systems is central to achieve sustainable results and to build effective institutions
Governments around the world spend approximately USD 9.5 trillion in public contracts every year. This means that on average, public procurement represents around 12%-20% of a country’s GDP (OECD, 2016[63]), and nearly one third of government expenditures in OECD countries (OECD, 2016[64]). Governments are increasingly using public procurement as a policy lever to pursue additional policy objectives, such as green growth and sustainable development, the development of small and medium-sized enterprises, innovation or standards for responsible business conduct (OECD, 2015[65]). Governments have policies encouraging green procurement at the central government level, such as Japan with its Green Purchasing Act. Green Public Procurement aims to establish criteria for public purchases and can stimulate innovation and increase demand for green products (OECD, 2016[59]).
The OECD Recommendation of the Council on Public Procurement provides a reference for modernising procurement systems which can be applied across all levels of government and state owned enterprises. The OECD has also developed a Methodology for Assessing Procurement Systems (MAPS) as a universal tool to assess the quality and effectiveness of public procurement systems, and based on the identified strengths and weaknesses, to develop strategies and implement reforms. It is relevant for all countries, irrespective of income level or development status. MAPS supports countries in achieving SDG 12 on responsible consumption and production (specifically target 12.7 on sustainable public procurement practices), and SDG 16 on peace, justice and strong institutions (specifically target 16.6 on effective accountable, and transparent institutions).
Engaging businesses in addressing the negative impacts of their operations is key to advance sustainable development
Irresponsible business practices can result in economic loss, environmental degradation, and poor labour conditions. The OECD has developed tools to promote and enable responsible business conduct to support sustainable development in all sectors and industries of the economy. These tools include the OECD Guidelines for Multinational Enterprises (MNE Guidelines), which comprise principles and standards in all key areas, including information disclosure, human rights, employment and industrial relations, the environment, bribery and corruption, consumer interests, science and technology, competition, and taxation. The MNE Guidelines are fully aligned with the recommendations of the UN Guiding Principles for Business and Human Rights (UNGPs). They include an expectation that businesses avoid and address adverse impacts that they cause, or contribute to, and seek to prevent or mitigate adverse impacts directly linked to their products, operations or services by a business relationship. To that effect, businesses carry out due diligence for adverse impacts in their own operations and throughout their business relationships. Each country adhering to the guidelines commits to setting up a National Contact Point to promote their use, handle inquiries and help resolve issues that can arise when an enterprise does not observe the MNE Guidelines (Bule and Tebar Less, 2016[66]).
In conflict-affected and high-risk areas, companies involved in mining and trade in minerals may be at risk of contributing to or being associated with significant adverse impacts, including serious human rights abuses and conflict. The OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High Risk Areas provides a practical framework to help companies respect human rights and avoid contributing to conflict through their sourcing decisions, including the choice of their suppliers.2 The Guidance includes supplements on tin, tantalum and tungsten (3T) and on gold, with tailored recommendations for each of these supply chains. It provides a common reference for suppliers and stakeholders, and focuses industry attention on leverage points such as smelters and refiners, while also recognising the interconnected nature of due diligence responsibilities. Its implementation programme involves over 500 stakeholders and has managed to engage in outreach with non-Adherents that play important roles in global mineral supply chains (OECD, 2016[67]).
Extractive operations can also have a significant social and environmental footprint and thus are often at risk of causing or contributing to adverse impacts, such as human rights infringements, economic set-backs and environmental degradation. Regardless of the requirements in law, meaningful stakeholder engagement is critical to avoiding some of the potential adverse impacts of extractive operations as well as optimising potential contributions. The OECD has developed a Due Diligence Guidance for Meaningful Stakeholder Engagement in the Extractive Sector. Extractive sector enterprises are considered to include enterprises conducting exploration, development, extraction, processing, transport, or storage of oil, gas and minerals.
Enterprises operating along agricultural supply chains can make a significant contribution to sustainable development by creating employment and bringing expertise, technology and financing capacities for increasing agricultural production sustainably and upgrading in supply chains. This can enhance food and nutritional security and help achieve the development goals of the host country. For instance, if domestic land legislation does not adequately recognise and protect informal land tenure rights, land acquisition may lead to the eviction – without fair compensation – of local communities holding customary rights; this, in turn, can result in a loss of income, increased vulnerability and food insecurity. The OECD-FAO Guidance for Responsible Agricultural Supply Chains helps enterprises observe existing standards for responsible business conduct along agricultural supply chains. These standards include the OECD Guidelines for Multinational Enterprises, the Principles for Responsible Investment in Agriculture and Food Systems, and the Voluntary Guidelines on the Responsible Governance of Tenure of Land, Fisheries and Forests in the Context of National Food Security. Observing these standards helps enterprises mitigate their adverse impacts and contribute to sustainable development (OECD/FAO, 2016[68]).
Effectively managing toxic materials and the generation of waste and pollutants in the production and consumption process is essential to sustainable development
Sustainable growth and development require minimising the natural resources and toxic materials used, and the waste and pollutants generated, throughout the entire production and consumption process (UN ECOSOC, 2016[6]). The OECD encourages the development of Pollutant Release and Transfer Registers (PRTR) as a tool for measuring and promoting improved environmental performance of industrial activities. A revised Recommendation of the Council on Establishing and Implementing PRTRs adopted in 2018 recognises the importance of these tools for SDG targets 3.9, 6.3, 9.4, 12.14. 12.5, 12.8, and 16.10; and calls for Members to design and establish PRTRs. To support these efforts the OECD develops practical tools and guidance to help member countries implement harmonised PRTRs. The OECD has also developed, in collaboration with partners, tools to support countries in developing chemicals management frameworks. These tools include the IOMC Toolbox for Decision-Making in Chemicals Management and the OECD Environmental Risk Assessment Toolkit (ERAT). The IOMC Toolbox offers a one-stop shop to identify the best tools and guidance to address specific national problems or objectives in chemical management. The Toolbox takes into account the resources available and guides the user towards cost-effective solutions adapted to the country. The Toolbox gives priority to hazard-based implementation tools and easily implemented and readily available tools.
ERAT is an internet-based tool that gives access to practical tools on environmental risk assessment of chemicals. The Toolkit walks the user through: i) a general Risk Assessment Process which includes four steps: hazard identification, hazard characterisation, exposure assessment, and risk characterization; ii) a Risk Assessment Process for Pesticides which takes into account the specificity of Pesticides which are deliberately applied to the environment; iii) six examples of how to use the Toolkit, including: Risk Assessment of a textile dye, Risk assessment of a pesticide, setting an Environmental Quality Standard, air pollution: compliance with limits set in a permit, risk assessment of a metal, initial screening of substances for persistent, bioaccumulative and toxic properties.
The OECD has also developed a global portal with information on chemical substances, the eChemPortal. This portal supports users in carrying-out or reviewing hazard assessment of chemicals by providing access to existing health and environmental effects information. A variety of other OECD tools have also been developed to help governments review registration dossiers submitted by registrants and to take decisions about risk assessment and risk management of chemicals. These tools include test methods, guidance documents and best practices on a variety of topics (risk assessment, exposure, risk management, risk communication), toolboxes, information portals.
Goal 15: Life on land
Biodiversity is fundamental to sustaining life. It provides critical ecosystem services such as food provisioning, water purification, flood and drought control, nutrient cycling and climate regulation. These services are also a major foundation of economic activity. The need to protect, restore and responsibly manage ecosystems and biodiversity has been repeatedly called for under the Convention on Biological Diversity (CBD). The Sustainable Development Goals reiterate this imperative with goals dedicated to both marine (SDG 14) and terrestrial ecosystems (SDG 15) (OECD, 2017[69]). SDG 15 calls on the international community to “protect, restore and promote sustainable use of terrestrial ecosystems, sustainably manage forest, combat desertification, and halt and reverse land degradation and halt biodiversity loss” (Box 1.9). At the international level, Parties to the Convention on Biological Diversity have committed to achieving the 2011‑20 Aichi Biodiversity Targets, many of which are also echoed in the SDGs (OECD, 2017[69]).
Box 1.9. SDG 15: Protect, restore and promote sustainable use of terrestrial ecosystems, sustainably manage forests, combat desertification, and halt and reverse land degradation and halt biodiversity loss
15.1 By 2020, ensure the conservation, restoration and sustainable use of terrestrial and inland freshwater ecosystems and their services, in particular forests, wetlands, mountains and drylands, in line with obligations under international agreements.
15.2 By 2020, promote the implementation of sustainable management of all types of forests, halt deforestation, restore degraded forests and substantially increase afforestation and reforestation globally.
15.3 By 2030, combat desertification, restore degraded land and soil, including land affected by desertification, drought and floods, and strive to achieve a land degradation-neutral world.
15.4 By 2030, ensure the conservation of mountain ecosystems, including their biodiversity, in order to enhance their capacity to provide benefits that are essential for sustainable development.
15.5 Take urgent and significant action to reduce the degradation of natural habitats, halt the loss of biodiversity and, by 2020, protect and prevent the extinction of threatened species.
15.6 Promote fair and equitable sharing of the benefits arising from the utilization of genetic resources and promote appropriate access to such resources, as internationally agreed.
15.7 Take urgent action to end poaching and trafficking of protected species of flora and fauna and address both demand and supply of illegal wildlife products.
15.8 By 2020, introduce measures to prevent the introduction and significantly reduce the impact of invasive alien species on land and water ecosystems and control or eradicate the priority species.
15.9 By 2020, integrate ecosystem and biodiversity values into national and local planning, development processes, poverty reduction strategies and accounts.
Targets on Means of Implementation
15.a Mobilize and significantly increase financial resources from all sources to conserve and sustainably use biodiversity and ecosystems.
15.b Mobilize significant resources from all sources and at all levels to finance sustainable forest management and provide adequate incentives to developing countries to advance such management, including for conservation and reforestation.
15.c Enhance global support for efforts to combat poaching and trafficking of protected species, including by increasing the capacity of local communities to pursue sustainable livelihood opportunities.
Source: (UNGA, 2015[4]).
Key challenges
Despite the invaluable benefits provided by biodiversity and associated ecosystems, current and projected trends show continued decline worldwide. Around 20% of mammals and birds, almost 40% of reptiles, a third of amphibians and a quarter of marine fish are already on the list of threatened species (OECD, 2016[70]). According to the 2016 UN Report on progress towards the SDGs, amphibians are declining most rapidly in Latin America and the Caribbean, while the greatest extinction risks for birds and mammals are found in South-Eastern Asia, owing mainly to the conversion of lowland forests (UN ECOSOC, 2016[6]).
The OECD Environmental Outlook to 2050 projects continued declines under a business‑as‑usual scenario, i.e. in the absence of new policy. Projections indicate that a further 10% loss of global biodiversity is expected between 2010 and 2050, with most of the loss occurring before 2030. Primary forests, which tend to be most rich in biodiversity, are projected to decrease steadily to 2050 in all regions (OECD, 2012[14]).
The main drivers of global terrestrial biodiversity loss are land-use change and management, i.e. conversion of natural ecosystems for producing food and bioenergy crops and livestock (OECD, 2012[14]). Agriculture is the most land-intensive human activity: currently around 33% of the earth’s surface is used for crops and livestock farming (Figure 1.9). About 80% of this production increase has been achieved through higher yields from existing land, and about 20% through expanding agricultural land. Between 1970 and 2010, the share of agricultural land use (crop and grazing land) expanded by about four percentage points, largely at the expense of forest area. Expansion has slowed over the past decade (OECD, 2017[13]). Biodiversity is also threatened by land cover changes and fragmentation due to urban growth, urban sprawl and infrastructure development (see section on the urbanisation challenge).
Deforestation and forest degradation remain a major concern. Together they are the second leading human cause of CO2 emissions, according to the Intergovernmental Panel on Climate Change. Some progress has been made in managing forests sustainably and protecting areas for biodiversity: according to UN estimates, the global net loss of forest area declined from 7.3 million hectares per year in the 1990s to 3.3 million hectares per year during the period from 2010 to 2015 (UN ECOSOC, 2016[6]).
Figure 1.9. Global land use, 1970 and 2010
Source: (OECD, 2017[13]).
Biodiversity loss and ecosystem degradation result in adverse and costly impacts on human health, well-being and economic growth. They can have particularly severe implications for the rural poor who depend heavily on natural resources: forest resources alone, according to some estimates, underpin the livelihoods of about 90% of the 1.2 billion people living in extreme poverty (OECD, 2013[71]).
Official Development Assistance (ODA) has an important role to play in supporting biodiversity in developing countries. According to some estimates, ODA remains the most significant source of finance for biodiversity in many low- and lower‑middle‑income countries (Drutschinin and Ockenden, 2015[72]). Biodiversity‑related ODA is on the rise – reaching USD 8.7 billion per year in 2014-15 compared with USD 6 billion in 2012-2013 – with Africa accounting for the highest share (31%) (OECD, 2016[73]). Biodiversity-related ODA represents a small part of overall environmentally-related ODA, which reached USD 35.5 billion in 2015 (OECD, 2017[3]). During that year, most of these funds were designated for climate change mitigation and adaptation (Figure 1.10). Meeting the SDG biodiversity targets will require scaling up finance from all sources – public and private, domestic and international.
Figure 1.10. ODA targeting environmental objectives
Note: Indicators are constructed from project-level data. Expressed in 2014 USD using PPPs.
Source: (OECD, 2017[3]).
Key interactions with other sustainable development goals
Biodiversity, as a key component of the natural asset base necessary for human well‑being, plays an essential role in achieving the 2030 Agenda and SDGs. Some of the critical links between biodiversity and the SDGs are highlighted in Table 1.8.
Table 1.8. The contribution of biodiversity to the Sustainable Development Goals
Source: Adapted from (CBD/FAO/the World Bank/UNEP/UNDP, 2017[74]).
Addressing interlinkages between land-use, agriculture, forests and ecosystems is key for achieving biodiversity targets and climate goals
The way land is used and managed impacts on the environment – from biodiversity and ecosystem services (including erosion risk, flood protection) to soil, water and air quality (OECD, 2017[3]). Land use also affects individual and collective well-being and is an important factor in achieving environmental sustainability, economic growth and social inclusion (OECD, 2017[75]). Historically, land use change and the conversion of habitat to other land uses, notably for agricultural production, is a main driver of biodiversity loss (OECD, 2016[76]). Agriculture, forestry and other land use contribute to around 25% of global anthropogenic GHG emissions, around half of which is from agriculture. Land sectors (agriculture, forests and soils) are sources of GHGs (i.e. methane from cattle and rice, nitrous oxide from fertiliser use), but also act as CO2 sinks (from forestry and carbon stocks in soils) (OECD, 2017[58]).
Agricultural land use and production practices have both positive and negative impacts on biodiversity. Low-intensity agricultural practices such as grazing and traditional haymaking create and support diverse semi-natural habitats with novel species. However, modern agriculture practices such as intensification (e.g. increased use of fertilizers and pesticides), specialisation (reduced crop rotations and fewer mixed crop‑livestock farms) and rationalisation (removal of hedges, edges and other boundary habitats) are detrimental to these semi-natural habitats and their associated species. For example, insecticides and herbicides intended to remove unwanted species such as pests and weeds are also toxic for non-target species, with substantial knock‑on effects for food webs, competitors and parasites within ecosystems (Lankoski, 2016[77]).
With the world’s population expected to reach 9 billion by 2050, it is estimated that agricultural production would need to increase by 60% over the next 40 years to meet rising food demand (OECD, 2013[78]). Increased agricultural demand has so far been met largely through improvements in yield rather than land expansion. But the rate of yield growth for most crops has been decelerating in the past few decades. So without faster yield improvements, demand for agricultural land is likely to grow, increasing the associated CH4 and N2O emissions. At the same time, demand for bioenergy for climate mitigation could grow rapidly through the century (OECD, 2017[58]), generating a potential trade-off between bioenergy production and food security.
Sustainable agriculture practices (SDG 2.4) and technological innovation will be critical to ensure progress on several SDGs related to natural resources, such as SDG 15 on land, forest and ecosystems. This includes improving crop and livestock productivity (e.g. by developing crop varieties that are resilient to local hazards and that inhibit the production of nitrous oxides); more efficient fertiliser use; improved soil management; and practices aimed at reducing emissions of methane (CH4) from ruminants, rice paddies and manure management. Sustainable agricultural practices that increase the productivity of arable land would also help to halt and reverse deforestation (SDG 15.2) and widespread land degradation (SDG 15.3), which is estimated to cost USD 100 billion per year (OECD, 2017[58]).
Healthy ecosystems can contribute to the achievement of water goals
Healthy ecosystems play a key role in regulating water flows. They reduce runoff (and therefore flood levels of the streams flowing from preserved areas) and improve water infiltration into the soil (helping to replenish groundwater). They contribute to purification of water resources, thus improving water quality. For example, almost 1 million urban dwellers rely on natural wetlands for wastewater retention and purification services. Healthy ecosystems can also enhance food security and climate security with spillover effects on water security. For example, healthy ecosystems help produce more food from each unit of agricultural land and improve resilience to climate change (OECD, 2013[8]).
Conversely, pressures on ecosystems increase water risks, including shortages, excesses, pollution, and other risks to freshwater systems (rivers, lakes, aquifers). For example, over-exploitation of water resources by agriculture in certain areas in OECD countries is damaging ecosystems by reducing water flows below minimum levels in rivers, lakes and wetlands, which is also detrimental to recreational, fishing and cultural uses of these ecosystems (OECD, 2010[79]).
Maintaining ecosystems requires more effective and sustainable management of water resources. This is becoming more urgent given the increasing pressure and competition over the use of water resources. A key challenge is to balance water demand for consumptive purposes against the environmental needs for water. A lack of water available for environmental needs could create serious environmental problems. For example, due to extensive water extractions, the reduced water volumes in lakes and wetlands have had a major negative impact on ecosystems. The most infamous example is the Aral Sea, which was once one of the largest freshwater lakes in the world, but is now just 10% of its size as a result of diversions from its main tributaries for irrigation purposes. This transformation has also greatly reduced the water quality of the remaining water, making it much more saline (OECD, 2013[8]).
Policy and governance responses
Mainstreaming biodiversity into sectoral policies
Many of the drivers of biodiversity loss and degradation are, directly or indirectly, related to policies in other sectors. A central challenge is the integration and mainstreaming of biodiversity policy objectives into economic development strategies and sectoral policies (Karousakis et al., 2012[80]). As biodiversity provides public benefits at local, regional and global scale, governments have a key role to play at all these levels to mainstream biodiversity and ecosystem services into policy and planning, such as: development strategies, plans, policies and budgets; sectoral plans and policies; subnational strategies, plans and policies; and development co-operation programmes. Intervening at any of these entry points may require different policy instruments (Drutschinin et al., 2015[81]). The OECD Recommendation on the Use of Economic Instruments in Promoting the Conservation and Sustainable Use of Biodiversity calls for Member countries to develop sector policies in ways that are consistent with biodiversity objectives, and to make greater and more consistent use of properly designed economic instruments for sustainable biodiversity management. Some policy instruments available for biodiversity conservation and sustainable use are presented in Table 1.9, and can be categorised as: regulatory (i.e. command-and-control) approaches, economic instruments, and information and other instruments (OECD, 2013[71]).
Table 1.9. Policy instruments for biodiversity conservation and sustainable use
1. Convention on International Trade in Endangered Species.
Source: (OECD, 2013[71]).
Biodiversity offsets, for example, can be used to help internalise external negative costs of development activities. To date, the have been used to compensate for impacts from various sectors, including mining, infrastructure, hydropower and agriculture (OECD, 2016[82]). The OECD database on Policy Instruments for the Environment (PINE) provides an inventory of six types of biodiversity-relevant instruments, such as taxes, fees and charges that are used in 80 countries.3
Applying an integrated approach to land-use planning
Land-use planning has a crucial role to play to accomplish 6 of the 17 SDGs. They include SDG 7 access to energy, SDG 9 the construction of resilient infrastructure, SDG 11 inclusive cities, SDG 13 climate change mitigation, and SDG 15 protection of ecosystems. Sustainable development’s integration into countries’ planning systems suggests that one can pursue the three dimensions of sustainable development – economic growth, environmental protection and social inclusion – in a balanced manner through planning. This represents a significant challenge for spatial planning.
The integration of the three dimensions of sustainable development requires the adoption of sophisticated planning instruments, capable of overcoming the rigidity of some land‑use plans. Spatial planning is expected to be flexible and adaptable to the evolving needs of sustainable development. It also has to provide vertical co-ordination between the different level of governments involved in the planning process and horizontal integration of different sectors (OECD, 2017[75]). Table 1.10 summarises some basic principles for translating sustainable integration into planning practice.
Land-use planning policies can also play an important role in reducing GHG emissions over the longer term because they can prevent the locking-in of energy and carbon intensive behaviour, particularly in urban areas. Implementing policies that price emissions will further steer producers and households towards less-polluting behaviour and investments.
Protected areas can help to reduce biodiversity loss
Globally, 15% of terrestrial and freshwater environments are covered by protected areas, according to the SDGs Report 2017 (DESA, 2017[83]). From 2000 to 2017, the average worldwide coverage of terrestrial, freshwater and mountain key biodiversity areas by protected areas increased from 35% to 47%, from 32% to 43% and from 39% to 49%, respectively (UN ECOSOC, 2017[7]). There are large variations among countries in the extent and the management of protected areas, which can be partly explained by differences in geography, ecology, and the pre-existing patterns of human settlement in the territory (OECD, 2017[3]). The OECD has developed a method to report a more detailed and harmonised account of countries’ terrestrial and marine protected areas and better understand the extent and focus of countries’ conservation efforts. This method can assist in monitoring progress towards the Aichi Targets of the Convention on Biological Diversity (CBD) and the SDGs, in particular SDG target 14.5, SDG target 15.1 and SDG target 15.4 (Mackie et al., 2017[84]).
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Notes
← 1. The New Policies Scenario of the World Energy Outlook serves as the IEA baseline scenario. It takes account of broad policy commitments and plans that have been announced by countries, including national pledges to reduce greenhouse-gas emissions and plans to phase out fossil-energy subsidies, even if the measures to implement these commitments have yet to be identified or announced.
← 2. An OECD Recommendation on the Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas was adopted by Council at Ministerial level on 25 May 2011 and subsequently amended on 17 July 2012 to include a reference to the Supplement on Gold [C/MIN(2011)12/FINAL].
← 3. For further information on the PINE database, see: https://pinedatabase.oecd.org/.