Policy Brief: Climate Change Policies

Climate change is already being observed through rising temperatures, melting glaciers, shifting rain patterns, increased storm intensity and rising sea levels. Greenhouse gas (GHG) emissions from human activities – mainly fossil fuel use, deforestation and agriculture – cause climate change. If GHG emissions are not reduced to significantly below current levels within the next few decades, there will be further warming and sea-level rise for centuries to come. This will result in adverse impacts on human health, natural ecosystems, and the economy.

The risk of serious climate change impacts suggests that urgent action is needed to significantly reduce GHG emissions in the coming decades. There is increasing evidence that the overall benefits of strong and early action to reduce GHG emissions outweigh the costs. But we need to reduce emissions at the lowest possible cost if we are to have a realistic chance of limiting further climate change.

OECD analysis shows that large reductions in GHG emissions are achievable at relatively low costs, if the right policies are put in place. This includes strong use of market-based instruments world wide to develop a global price for GHG emissions, accompanied by better integration of climate change objectives in relevant policy areas such as energy, transport, building, agriculture or forestry, and other measures to speed technological innovation and diffusion.

Since the early 1990s, most industrialised nations and many developing countries have implemented climate change-related policies. The OECD has contributed to the debate through its analytical work on the design and implementation of effective climate change policies, as well as its peer reviews of policy performance in individual countries. This Policy Brief summarises the main messages of OECD work to date, and provides suggestions for how governments can achieve their climate change commitments in the future.