3a Greening growth in dynamic Southeast Asia by Mauro Pisu and Sani Zou-ASIA OECD DCD

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Mr. Mauro Pisu (Senior Economist, OECD Secretariat) and Ms. Sáni Zou (Policy Analyst, OECD Secretariat) presented on Greening growth in dynamic Southeast Asia. Presentation delivered at the OECD ENVIRONET EXPERT WORKSHOP: GREEN GROWTH, DEVELOPMENT PLANNING AND POLICY; as part of the 16th ENVIRONET meeting in Paris.

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  • ASEAN countries face important local and global environment challenges:Resource-intensive growth in the pastalarming rate of natural capital depletionputs sustainable development at riskNegative environmental externalities persistnegative impacts on human well-being and economic growthalready affecting economic productivityexpected to slow down growthGlobal challenges multiply risks energy security, food security and climate change
  • Green growth policies have co-benefits and trade-offs across sectorsPoverty alleviation is an additional dimension of green growth in DCsInter-temporal trade-offs require strong political leadership Environmental policies should be mainstreamed into “core” ministries (Finance, Development)Green growth can be mainstreamed into development through National Development Plans (NDPs) There are also national climate change policiesin most ASEAN countriesand national green growth strategies in fewer countriesInter-ministerial co-ordination mechanisms provide an enabling setting for implementation
  • In the medium term, GG priorities are mainstreamed to a different extent across countries:1. Tackling climate changeClimate change adaptation is a national development priority across ASEAN countriesbut climate change mitigation is not (except Indonesia and Malaysia)Adaptation mainstreamed across agriculture, infrastructure, energy sectors2. Reducing local pollution air pollution, water pollution and waste are mainstreamed into most NDPs albeit to a different extent3.Sustainable natural resource management Sustainable forestand land management is a priority in all countriesQuantitative targets for reforestation set in NDPs (Cambodia, Lao PDR, Vietnam)mining
  • Green growth challenges are interlinkedCountries are managing co-benefits / trade-offs between food security, energy security and sustainable natural resource managementSome ASEAN countries have developed cross-sector policies to manage co-benefits and trade-offs in an integrated wayManaging competing demand for land from food production, renewable energy (e.g. Thailand) and forests (e.g. Lao PDR) and rural development (e.g. Vietnam)Increasing agricultural productivity can have co-benefits on climate change adaptation and local pollutionPlanning for local pollution reduction with co-benefits on GHG emission reductione.g. reusing solid waste in Thailand, integrated environmental management in river basin areas in Indonesia, capacity building and awareness raising in MalaysiaEnergy security policies have ambiguous effects on GHG emissionsPhasing out fossil fuel subsidies to achieve triple wins of increased energy security, mitigation and poverty reduction by (e.g. social protection in Malaysia)National targets are set for renewables in the energy and power mixBUT plans to increase energy security continue to rely heavily on fossil fuels and hinder climate change mitigation (e.g. off-shore oil and gas discoveries in Cambodia)
  • ASEAN countries are relying on command and control instruments more heavily than on market based instruments to reduce local pollutionCommand and control for air pollution, economic instruments for waste and waterLack of property rightsIncrease use of economic instruments to cost-efficiently internalize environmental externalitiesWhere market based instruments exist, price signals for externalities are inconsistentFeed-in tariffs are NOT technology neutral or in line with other policy instrumentsFossil fuel and agricultural subsidies and the lack of taxes distort price signals and reduce incentives for clean and sustainable investmentsIntroduce a single price for pollution across ASEAN countries and sectors through regional co-operation
  • Most countries have institutionalised inter-ministerial co-ordination for climate change Committees are tasked with formulating a national climate policy and monitoring its implementationBUT Ministries can have overlapping responsibilities when multiple committees exist e.g. for climate change and for adaptation and improving resilience overlapping roles among ministries signal lack of co-ordination in practiceThere are separate co-ordination mechanisms for green growth and climate changeLevel of leadership on climate change is high E.g. President, Prime Minister or Deputy Prime Minister BUT core ministries do not always have a role
  • Align development finance for climate change and environment behind priorities in NDPsImprove coherence among sector policies and their objectivesDisburse development finance using existing country systemsSupport for a single and efficient pollution priceHarmonise in-country practices among partnersCo-ordinate through inter-ministerial green growth mechanisms
  • 3a Greening growth in dynamic Southeast Asia by Mauro Pisu and Sani Zou-ASIA OECD DCD

    1. 1. GREENING GROWTH IN DYNAMIC SOUTHEAST ASIA OECD ENVIRONET Expert Workshop: Green Growth Development Planning and Policy 20th February 2014
    2. 2. ASEAN countries face important local and global environment challenges: 1. Growth has been resource-intensive • alarming rate of natural capital depletion • puts sustainable development at risk 2. Negative environmental externalities persist • negative impacts on human well-being • expected to slow down growth 3. Global challenges multiply risks • energy security, food security and climate change Why is greening growth important in Southeast Asia?
    3. 3. • Green growth policies have co-benefits and trade-offs across sectors • Poverty alleviation is an additional dimension of green growth in DCs • Inter-temporal trade-offs require strong political leadership • National Development Plans (NDPs): mainstream environmental policies into “core” ministries (Finance, Planning) • Inter-ministerial co-ordination mechanisms: enabling setting for implementation Mainstreaming green growth into development planning
    4. 4. Challenges and priorities with implications on green growth in ASEAN National Development Plans Brunei Cambodia Indonesia LaoPDR Malaysia Myanmar Philippines Singapore Thailand Vietnam Global challenges and priorities Climate change mitigation N/A No Yes No Yes No No No No No Resilience to Climate Change N/A Yes Yes Yes Yes Yes Yes Yes Yes Yes Energy Security N/A Yes Yes No Yes No Yes N/A Yes No Food Security N/A Yes Yes Yes No Yes Yes No No Yes Local challenges and priorities Reducing local air pollution, water pollution and waste N/A Yes (water) Yes No Yes Yes Yes N/A Yes Yes Sustainable forest and land management N/A Yes Yes Yes Yes Yes Yes N/A Yes Yes Sustainable natural resource extraction N/A No No Yes Yes Yes Yes N/A Yes No Source: ASEAN medium-term national development plans
    5. 5. • Examples for cross-sector policies managing co-benefits and trade-offs: • Managing competing demands for land • Adaptation co-benefits from increasing agricultural productivity • Mitigation co-benefits from reducing local pollution • BUT energy security policies need to take into account environmental challenges more Challenges and priorities with implications on green growth in ASEAN National Development Plans
    6. 6. • Local pollution reduction: regulatory and market based instruments • Economic instruments: waste (and water) • Lack of taxes on air pollution • Property rights not always well defined • Price signals for environmental externalities are distorted • Feed-in tariffs are NOT technology neutral or in line with other policy instruments • Fossil fuel and agricultural subsidies persist Policies for (and against) green growth in Southeast Asia
    7. 7. • Many countries have institutions for inter-ministerial co- ordination on climate change action • To formulate a national climate policy document and to monitor its implementation • BUT overlapping roles among ministries signal lack of co- ordination in practice • There are separate co-ordination mechanisms for green growth and climate change • Level of leadership on climate change is high • E.g. President, Prime Minister, Deputy Prime Minister • BUT core ministries do not always have a role Co-ordination for green growth in Southeast Asia
    8. 8. • Align development finance for climate change and environment behind priorities in NDPs • Improve coherence among sector policies and their objectives • Disburse development finance using existing country systems • Provide support for a single and efficient pollution price • Harmonise in-country practices among partners • Co-ordinate through inter-ministerial mechanisms on green growth Lessons for development co-operation providers in Southeast Asia
    9. 9. For further details, please visit the website: http://www.oecd.org/greengrowth/asia.htm Or contact: Mauro.PISU@oecd.org Sani.ZOU@oecd.org

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