OECD pushes forward on eco-efficiency

International meeting weighs options to increase resource efficiency four or ten-fold

The concept of eco-efficiency continued its climb up the international policy agenda at a meeting held by the Organisation for Economic Cooperation and Development in Paris which ended yesterday.

Proposals to be put before OECD environment ministers at their next meeting in April 1998 were discussed by representatives from governments, the international business community and NGOs. A draft report prepared for the ministers presents a range of recommended policy options, including environmental tax reform.

The eco-efficiency concept was the international business response to the 1992 Earth Summit. It was first defined by the Business Council for Sustainable Development (BCSD) as a principle of supplying people's needs in competitive markets while reducing environmental impacts and resource intensity to levels in line with the Earth's carrying capacity. According to the BCSD (now the WBCSD), eco-efficiency will benefit industry, consumers and the environment - a "win-win-win" solution.

The Paris meeting was attended by leading thinkers on eco-efficiency, such as Ernst von Weizs├Ącker, president of the Wuppertal Institute in Germany. He is also co-author of Factor Four, an influential book which argues that the amount of wealth extracted from natural resources could be quadrupled through product innovation. His Institute is also behind the Factor Ten Club, formed in 1994, which argues that resource productivity must ultimately be increased tenfold.

The meeting concentrated on ways of overcoming inertia in market economies. Advocates of eco-efficiency argue that incremental advances in product efficiency will not offer the necessary changes; companies will have to leapfrog existing technology, they say. They argue that gradually shifting the tax burden away from labour and onto resources and pollution is the most efficient way of spurring the innovation required.

The draft OECD report identifies tax reform as one means of promoting eco-efficiency. Other instruments advocated are tradable permit and quota systems, the reform or removal of subsidies on energy and transport, policies to encourage research and innovation, and the further development of "producer responsibility" legislation to make producers consider the full life-cycle costs of their products.

Speaking at the meeting, Jan-Olaf Willums, of the WBCSD, said: "Eco-efficiency will in the long term become as widely accepted [in business] as quality is today." Mr Willums added that businesses needed some standard ways of measuring eco-efficiency in a company in order to make full use of the concept. Possible indicators discussed in the meeting include the tonnage of materials and the amount of energy used per unit of service.

However, some delegates argued that developing meaningful indicators may prove tricky. One European government economist said that a measure of material intensity was a poor proxy for environmental impact.

Follow Up:
OECD , tel: +33 1 45 24 82 00; WBCSD , tel: +49 22 839 3100.

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