2020: a clearer view for the environment

Director, OECD Environment Directorate

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Environmental issues feature highly on the international agenda. What are the main threats, and what does the future hold? 

The destruction of tropical forests, encroaching deserts, dry wastelands, millions more species lost, weather patterns playing havoc, cities choking, water courses trickling and vast dead oceans heaving with oil and other undigestables left behind by the human race. This is an exaggerated and harrowing view of the future and, thankfully, no such scenario for the world’s environment is in prospect, at least not between now and 2020. But is a spoiled planet really as improbable as all that?

Yes, if the right policy action is taken to avoid it. The hard fact is that environmental pressures have increased, and some urgently need to be brought under control. Developing the right policies demands some knowledge of the kinds of pressures we are facing, what is driving these pressures, and how they are likely to evolve. Building a sound view of how the environment might look in 2020 is therefore a crucial exercise. The OECD is engaged in building such an outlook, the final results of which will be presented to environment ministers in 2001. The report may not be exhaustive, focusing instead on key areas of concern; but even so, it is a delicate task. It means analysing recent trends, taking stock of the present state of the environment, and making projections for developments in the most environmentally sensitive issues, as well as for the underlying social and economic forces that drive them. But projections are not set in stone – they can be changed by direct policy actions. Key environmental policies for a more environmentally friendly future are thus analysed in the report.

Warning lights 

While the final report will not be ready until April 2001, some preliminary results are now emerging. The box below provides a simplified picture of some of the issues which, on an early reading, will have to be addressed over the next 20 years. Green light issues in the graph are those less urgent areas where OECD countries can “proceed with caution”, while yellow light issues are marked by uncertainty; they require some attending to now. Red light issues are the most problematic ones and generally require immediate policy action.

Over-fishing is an example of a red light issue. It is a worldwide problem. According to the FAO, an estimated 70% of the world’s natural fisheries are already either exhausted, over-fished or in a state of recovery. In the absence of dramatic policy changes, global production from these fisheries might decrease by over 12% from 1997 levels in 2010. Deforestation may be another serious problem on a global scale. While total forest coverage in OECD countries has been expanding in recent years – by almost 4% since 1970 – worldwide deforestation of tropical and established, old-growth forests continues at an alarming rate. Sustainably managing OECD forestry poses a challenge, but not at the red-light level of tropical forests. Another urgent issue is that of biodiversity which, while difficult to measure, appears to continue to be under significant pressures.

Technological Fixes 

Identifying environmental pressures is one thing, but coming up with ways of dealing with them is another. Technological “fixes” have lessened many environmental pressures. Most of the technological developments have been in the form of either eco-efficiency improvements, such as reductions in the amount of energy or resources used in manufacturing goods, or systems or technologies to increase the level of renewable resources production (e.g. increased input use in forestry & agriculture, fish feed, use of biotechnologies). The development of aquaculture, which is intensively managed fish farming, can be seen to fall in the latter category, and has helped to divert some of the demand for fish products away from over-stressed natural fisheries. It has been expanding rapidly and is projected to increase by up to 35% globally between 1997-2010. Similarly, industrial plantation forests are expected to play an increasing role in meeting wood production needs. However, such technological “fixes” do not come without cost, since even if aquaculture and forest plantations help reduce global pressures on natural resources, they can have damaging local effects. As a result, both get a yellow light in our schema.

New biotechnologies, including genetically modified organisms (GMOs), are being hailed as the solution to many of our resource use problems; they have the potential to reduce the amount of damaging inputs (pesticides, fertilisers) used in natural resource sectors (agriculture, forestry, fisheries), and increase production levels. However, the jury is still out on their effects on human health and ecosystems, and thus their future potential.

Decoupling growth and the environment 

In general, environmental degradation has kept pace with economic growth. But the use of energy and other resources, like raw agricultural materials, water and metals, now appears to be on the decline in relation to GDP in many OECD countries. This fall in intensity points to a potential decoupling between the respective directions the economy and the environment are taking, with an easing in the rhythm of environmental degradation in relation to economic growth. In some cases, these reductions in resource intensity have been large enough to lead to absolute, rather than just relative, environmental improvements, by offsetting the overall effects of total economic and population growth. At least nine OECD countries reduced their total water consumption between 1980-1997 (see graph).

However, despite such eco-efficiency improvements, overall environmental degradation has persisted in most cases. OECD countries reduced the energy intensity of their economies by 31% between 1973-1996, but they increased total energy consumption by 23% over the same period. Their total energy use is expected to grow by a further 30-50% to 2020.

Greenhouse gas emissions tell a similar story. While the output of GHG emissions relative to GDP has fallen for OECD countries in recent years, total absolute emissions have risen. Under current policies, OECD countries could increase GHG emissions by a further 30% to 2010, far from the overall Kyoto Protocol target of a 5% reduction from 1990 levels to 2008-2012.

In some cases, there are no signs of any real improvement. This is true of transportation, where motor vehicle kilometres travelled in the OECD are expected to increase by at least 65% between 1990-2020 and passenger air kilometres are expected almost to quadruple. Similarly, levels of OECD municipal waste generation in 2020 are expected to continue following GDP growth, approximately doubling from the 1980 levels.

Hard road ahead 

What can policymakers do to tackle these environmental pressures? For a start, they should look at examples where improvements have taken place. These have often been linked to pricing incentives or regulatory intervention. Recent reductions in water use have been most pronounced in countries, such as the United Kingdom, Scandinavian countries and some central European countries, that have removed subsidies and applied charges that better reflect costs. Similarly, the main reductions in energy intensity of OECD economies, while not policy driven, occurred between 1974-75 and 1979-82, during the major oil price shocks when energy prices soared.

Government regulations and direct intervention have been particularly successful in reducing industrial pollution, cleaning up the worst polluted surface waters, and cutting back some air pollutants, for example, by phasing out leaded petrol (an initiative which was made possible by technology of course). In other cases, government policies can facilitate environmentally beneficial changes in consumption patterns. This is true for the development of organic agriculture, whose rapid growth in OECD countries is partly due to increased consumer demand, partly to government support.

To some extent, the most tractable environmental problems have already been “cherry-picked”. Recycling, cutting lead in the atmosphere, cleaning water courses – all these are being dealt with. But the problems for the future are likely to be more complex, and their resolution will require more difficult sacrifices.

Take the case of chemicals. There have been significant reductions in chemical emissions from industry in recent decades, yet manufactured chemicals are still widespread in the environment, and are difficult to tackle because of releases through diffuse uses, like driving cars and farming. Groundwater pollution harbours a similar problem, for unlike the more manageable surface water and point source problems (such as rivers and industrial factories), its causes are also diffuse, primarily from agricultural run-off. Likewise, while some air pollution emissions have been reduced (lead, sulphur dioxide and carbon dioxide), others, such as volatile organic compounds and nitrous oxide emissions which contribute to photochemical smog, are on the increase. Again, easy regulatory solutions for this simply do not exist.

The message is clear. The issues which will require most urgent attention in the next few decades are transport use, waste generation, diffuse sources of pollution and the over-use of some renewable resources. While strong regulatory frameworks will remain necessary, they must be combined with more innovative policy packages. Otherwise, alleviating the underlying pressures on the environment will become extremely difficult. Using stronger pricing mechanisms for consumers and producers would appear to be one way forward; voluntary agreements, tradable permits, eco-labels and information-based incentives are others. If we fail to act, the prospects in 2020 could be more harrowing than we would like to imagine.

References 

• FAO, Forest Products: 1982-1993, Rome, 1995

• FAO, State of the World Fisheries and Aquaculture, Rome, 1998

• Hoffman, U. & Zivkovic, D., “Demand Growth for Industrial Raw Materials and its Determinants: An Analysis for the Period 1965 - 1988”, UNCTAD Discussion Paper No. 50, Geneva, 1992

• IEA, Energy Policies of IEA Countries: 1999 Edition, OECD, Paris, 2000

• OECD, OECD Environmental Data: Compendium 1999, Paris, 1999

©OECD Observer No 221/222, Summer 2000   




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