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

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. Three pillars of growth and sustainable
development (and wellbeing)
2
Global Forum on
Environment 2016

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
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. ... 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
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. Are stringent environmental policies compatible with
growth?

8. Firms – both losers and winners
Source: Albrizio et al.
(2014)
8
Effects of tightening of environmental policies on productivity
growth

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. More evidence: environmental policies
do provide opportunities
Source: Sauvage, 2014. 10

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. • Acknowledgements:
• Tomasz Kozluk
Thank you!