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ENV GLOBAL FORUM OCT 2016 - Opening Session - Catherine.L. Mann

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ENV GLOBAL FORUM OCT 2016 - Opening Session
Catherine.L. Mann
"the Environment and Growth"

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ENV GLOBAL FORUM OCT 2016 - Opening Session - Catherine.L. Mann

  1. 1. Catherine L. Mann OECD Chief Economist Paris, 24-25th October 2016 The Environment and Growth: Stating facts, dispelling myths and identifying what we don’t know
  2. 2. Three pillars of growth and sustainable development (and wellbeing) 2 Global Forum on Environment 2016
  3. 3. What are the consequences of a circular economy? (actual and “measured”?) Firms Households (& environment) Income (wages, interest, profits) =GDP in return for inputs into production Expenditure =GDP in return for goods and services Reduce (env) inputs Consumer 2 consumer (eg sharing) Recycling Extended capital life Recycling, reuse, extended product life New services
  4. 4. 4 Example: modelled effects of environmental degradation (climate change) on growth… Source: ENV-Linkages calculations Uncertainty ranges in 2060 dueto uncertainty in ECS -7% -6% -5% -4% -3% -2% -1% 0% 2010 2020 2030 2040 2050 2060 -South & South East Asia OECD Pacific Rest of Europe & Asia OECD Europe Latin America OECD America World -Sub Saharan Africa Middle East & North Africa
  5. 5. ... but a lot of important effects and risks are not included Includes: • Agriculture productivity • Sea level rise (capital and land losses in costal zones) • Health (heat stress) • Energy demand • Tourism • Capital damages from hurricanes Doesn’t include: • Fatalities from heatwaves • Urban damages from river floods • Biodiversity loss • Large-scale disruptive events Tail risks
  6. 6. 6 Global non-market costs of air pollution: mortality and morbidity Mortality costs: USD 3 trillion 0 5 15 25 35 2015 2020 2025 2030 2035 2040 2045 2050 2055 2060 Non-market costs (mortality and morbidity) TrillionsofUSD(2010,inPPP) -> USD 18 – 25 trillion in 2060 Morbidity costs: USD 300 billion -> USD 2 trillion in 2060 Source: OECD (2016), The economic consequences of outdoor air pollution
  7. 7. Are stringent environmental policies compatible with growth?
  8. 8. Firms – both losers and winners Source: Albrizio et al. (2014) 8 Effects of tightening of environmental policies on productivity growth
  9. 9. Very small effects on trade – both positive and negative Source: Kozluk and Timiliotis, (2016), Do environmental policies affect global value chains? A new perspective on the pollution haven hypothesis.
  10. 10. More evidence: environmental policies do provide opportunities Source: Sauvage, 2014. 10
  11. 11.  How does economic growth depend on the environment and natural resources? (Session 2)  How does environmental degradation affect economic growth? (Session 3)  How environmental policies can be designed to be compatible with (green) economic growth? (Session 4) GFE 2016: Towards quantifying the links between the environment and growth
  12. 12. • Acknowledgements: • Tomasz Kozluk Thank you!

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