Appendix D


Sustainability in the OECD

For the Organization for Economic Co-operation and Development (OECD), which comprises the world’s developed countries, the basis of sustainable development is the successful integration of social, environmental, and economic policy (OECD 2001). In that spirit, the OECD plays several important roles in creating and sharing ideas and information regarding sustainable development and analyzing environmental and sustainability trends.1

The OECD provides an interpretation of key concepts in the sustainable-development literature, including interpretations that are consistent with mainstream environmental economics (Ruffing 2010). In 2001, the OECD secretary general issued a major report on sustainable development (OECD 2001). Among other things, the report argued for mainstreaming the concept of sustainable development into standard economic discourse and into the normal practice of governmental policies. The report took a capital-based approach to sustainable development—distinguishing between anthropogenic-made capital, natural capital, human capital and social capital—arguing that sustainability requires that the sum of these different types of capital on a per capita basis not decline over time. The report also acknowledges that the degradation of capital that has no substitute would lead to an irreversible loss for future generations (Atkinson et al. 1997, Neumayer 1999) and thus would require the maintenance of critical stocks of natural capital at a safe minimum level, an approach known as “strong sustainability.” Similarly, the OECD Environmental Strategy (OECD 2001), which was adopted by the OECD environment ministers in 2001, interpreted a key sustainability concept by articulating four principles for the environmental pillar of

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1 For more details see http://www.oecd.org/topic/0,3373,en_2649_37425_1_1_1_1_37425,00.html.



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Appendix D Sustainability in the OECD For the Organization for Economic Co-operation and Development (OECD), which comprises the world’s developed countries, the basis of sustainable devel- opment is the successful integration of social, environmental, and economic policy (OECD 2001). In that spirit, the OECD plays several important roles in creating and sharing ideas and information regarding sustainable development and analyzing environmental and sustainability trends.1 The OECD provides an interpretation of key concepts in the sustainable- development literature, including interpretations that are consistent with main - stream environmental economics (Ruffing 2010). In 2001, the OECD secretary general issued a major report on sustainable development (OECD 2001). Among other things, the report argued for mainstreaming the concept of sustainable development into standard economic discourse and into the normal practice of governmental policies. The report took a capital-based approach to sustainable development—distinguishing between anthropogenic-made capital, natural capi - tal, human capital and social capital—arguing that sustainability requires that the sum of these different types of capital on a per capita basis not decline over time. The report also acknowledges that the degradation of capital that has no substitute would lead to an irreversible loss for future generations (Atkinson et al. 1997, Neumayer 1999) and thus would require the maintenance of critical stocks of natural capital at a safe minimum level, an approach known as “strong sustain - ability.” Similarly, the OECD Environmental Strategy (OECD 2001), which was adopted by the OECD environment ministers in 2001, interpreted a key sustain- ability concept by articulating four principles for the environmental pillar of 1 For more details see http://www.oecd.org/topic/0,3373,en_2649_37425_1_1_1_1_37425,00.html. 139

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140 APPENDIX D sustainability, namely, regeneration, substitutability, assimilation, and avoiding irreversibility.2 The OECD also publishes reports on various topics related to sustainability and fosters dialogue and discussion on sustainable development among member countries, thus providing an opportunity for sharing and learning. For example, the OECD has prepared reports on institutionalizing sustainable development (OECD 2007), good practices in the National Sustainable Development Strate - gies of OECD countries (OECD 2006), and guidance on preparing sustainability assessments (OECD 2010). The Organization has been working on a “green growth” strategy for consideration of OECD ministers; the strategy would maxi - mize synergies between ensuring environmental integrity and improving eco - nomic efficiency. In 1998, the OECD also established a roundtable on sustainable development, where environment and development ministers engage in informal dialogue on the international policy agenda of sustainable development. 3 The OECD also publishes regular environmental performance reviews of member countries. The OECD prepares a variety of reports on global sustainability conditions. In its 2008 report, the OECD Environmental Outlook to 2030, the OECD made clear that many of the conditions that led to Earth Summit in 1992 still pose serious threats (OECD 2008). The report projected environmental and economic trends from the present to 2030 and recognized progress in addressing air quality, water quality, forestry, and waste management in developed countries. It also de - scribed “climate change, biodiversity loss, water scarcity, and health impacts of pollution and hazardous chemicals” as especially serious problems. Without new policy actions on these issues, the OECD said that “within the next few decades we risk irreversibly altering the environmental basis for sustained economic pros- perity.” The report also identified a suite of “achievable and affordable” policies for addressing these issues. 2 OECD (2001) defined these terms as follows: Regeneration: “Renewable resources shall be used efficiently and their use shall not be permitted to exceed their long-term rates of natural regeneration.” Substitutability: “Non-renewable resources shall be used efficiently and their use limited to levels which can be offset by substitution by renewable resources or other forms of capital.” Assimilation: “Releases of hazardous or polluting substances to the environment shall not exceed its assimilative capacity; concentrations shall be kept below established critical levels necessary for the protection of human health and the environment.” Avoiding Irreversibility: “Irreversible adverse effects of human activities on ecosystems and on biogeochemical and hydrological cycles shall be avoided.” 3 For more details, see http://www.oecd.org/pages/0,3417,en_39315735_39312980_1_1_1_1_1,00. html.

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141 APPENDIX D REFERENCES Atkinson, G., W.R. Dubourg, K. Hamilton, M. Munasinghe, D.W. Pearce, and C.E.F. Young. 1997. Measuring Sustainable Development: Macroeconomics and Environment. Cheltenham: E. Elgar. Neumayer, E. 1999. Weak Versus Strong Sustainability: Exploring the Limits of Two Opposing Paradigms. Cheltenham: E. Elgar. OECD (Organisation for Economic Co-operation and Development). 2001. OECD Environmental Strategy for the First Decade of the 21st Century. Organisation for Economic Co-operation and Development, May 21, 2001 [online]. Available: http://www.oecd.org/dataoecd/33/40/1863539. pdf [accessed Apr. 18, 2011]. OECD. 2006. Good Practices in the National Development Sustainable Development Strategies of OECD Countries. Paris: OECD [online]. Available: http://www.oecd.org/dataoecd/58/42/36655769.pdf [accessed May 4, 2011]. OECD. 2007. Institutionalising Sustainable Development. Paris: OECD. OECD. 2008. OECD Environmental Outlook to 2030. Paris: OECD. OECD. 2010. Guidance on Sustainability Impact Assessment. Paris: OECD. Ruffing, K.G. 2010. The role of the Organization for Economic Cooperation and Development in environmental policy making. Rev. Environ. Econ. Policy 4(2):199-220.

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