OECD says cut fossil fuel subsidies to create 20 million jobs

The “Green Growth Strategy” report from the Organisation for Economic Co-operation and Development (OECD) argues, amongst other things, for a decrease in the carbon dioxide emission intensity of production, and a decrease in subsidies for fossil fuels.

It says that investing in green activities will create many jobs – up to 20 million worldwide by 2030 - in renewable energy generation and distribution alone.

There will be job losses associated with the more polluting energy sources, but these are “likely to be concentrated on a small portion of the total workforce".

The OECD makes the interesting observation that although “the most intensely polluting industries account for a large share of total dioxide emissions, they account for only a small share of total employment" - 80% of emissions but only 8% of the workforce in 2004, the most recent year for which data are available.

It says, possibly with a nod to the most recalcitrant nations in climate change negotiations, that “there is a widespread perception that some people will be worse off because of green growth policies. While this is not the case, unless these concerns are addressed, some key policies may be called into question."

The dilemma for governments is that the damage caused by higher fuel prices will be immediately felt by some people, but the economic and environmental gains of switching to the low carbon economy take longer to materialise and are more diffuse.

Therefore “targeted compensatory measures need to be introduced, particularly in emerging markets".

Consequently, the report concludes that “if governments wish to green the growth paths of their economies they need to treat the challenges as ones that go to the core of their economic strategies."

Complementary to this report for policymakers is a diagnostic framework and a toolkit, Tools for Delivering on Green Growth, and the OECD will follow up the report with a long-term agenda to support national and international efforts to achieve greener growth, and an ongoing discussion forum.