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This report provides an assessment of the use of, and recommendations for scaling up, Nature-based Solutions to address water-related climate risks. The analysis is based on two country case studies carried out in Mexico and the United Kingdom. On the basis of a previously developed policy evaluation framework, the analysis identifies existing challenges as well as highlights emerging good practices with regard to policy design and implementation, governance, regulatory mechanisms, and technical and financial arrangements. The report’s findings support policy makers and practitioners in strengthening the use of Nature-based Solutions to tackle climate risks, with a special focus on water-related risks.

This paper presents a comprehensive assessment of the policy instruments adopted by the Netherlands to reach carbon neutrality in its manufacturing sector by 2050. The analysis illustrates the strength of combining a strong commitment to raising carbon prices with ambitious technology support, uncovers the pervasiveness of competitiveness provisions, and highlights the trade-off between short-term emissions cuts and longer-term technology shift. The Netherlands’ carbon levy sets an ambitious price trajectory to 2030, but is tempered by extensive preferential treatment to energy-intensive users, yielding a highly unequal carbon price across firms and sectors. The country’s technology support focuses on the cost-effective deployment of low-carbon options, which ensures least-cost decarbonisation in the short run but favours relatively mature technologies. The paper offers recommendations for policy adjustments to reach the country’s carbon neutrality objective, including the gradual removal of exemptions, enhanced support for emerging technologies and greater visibility over future infrastructure plans.

This paper assesses the design of the air pollution tax in conjunction with a stringency analysis of the emission concentration limits in the Czech Republic. The analysis draws upon a detailed database containing environmental reporting by industrial stationary sources. The assessment of the emission concentration limits focuses on analysing the shift of the statutory limits between 2013 and 2017 and the corresponding real-life measured concentration on individual source basis. It provides an assessment of stringency of the air protection instrument and also of the vintage differentiation applied in the form of transitional schemes. The stringency analysis of the emission concentration limits stringency is related to the air pollution tax relief provision.

This paper provides a comprehensive assessment of the recent and projected socio-economic development of coastal areas. It reviews the environmental pressures exerted by human activities on coastal areas, as well as the impacts of climate change that exacerbate existing challenges. The paper calls for a co-ordinated and well-adapted policy response to address these challenges.

This paper assesses quantitative estimates based on economic modelling studies of the economic and environmental benefits from different forms of international co-ordination on carbon pricing. Forms of international co-ordination include: harmonising carbon prices (e.g. through linking carbon markets), extending the coverage of pricing schemes, phasing out fossil fuel subsidies, developing international sectoral agreements, and establishing co-ordination mechanisms to mitigate carbon leakage. All forms of international co-operation on carbon pricing can deliver benefits, both economic (e.g. lower mitigation costs) and/or environmental (e.g. reducing GHG emissions and carbon leakage). Benefits tend to be higher with broader participation of countries, broader coverage of emissions and sectors and more ambitious policy goals. Most, but not all, countries gain economic benefits from international co-operation, and these benefits vary significantly across countries and regions. Complementary measures outside co-operation on carbon pricing (e.g. technology transfers) could ensure that co-operation provides economic benefits for all countries.

Belgium has made progress in decoupling several environmental pressures from economic growth, in improving wastewater treatment and in expanding protected areas. Regions have achieved high levels of recovery and recycling, and have pioneered circular economy policies. However, further efforts are needed to progress towards carbon neutrality, reduce air and water pollution, reverse biodiversity loss and consolidate results of circular economy initiatives. Strengthening co‑ordination between the federal government and the regions, and among the regions, as well as enhancing policy coherence will be key factors of progress. As the COVID-19 emergency passes, recovery efforts should focus on putting the country back on track to meet the Sustainable Development Goals. Investing in low-carbon and natural infrastructure, promoting circular economy, strengthening carbon prices and phasing out environmentally harmful subsidies should be priorities. This is the third Environmental Performance Review of Belgium. It evaluates progress towards sustainable development and green growth, with special features on biodiversity and waste, materials management and the circular economy.

This report draws on more than 1 300 government budgetary transfers and tax expenditures providing preferential treatment for the production and consumption of fossil fuels as documented in the 2020 OECD Inventory of Support Measures for Fossil Fuels to track progress in reform of support. It sets out principal trends across 50 OECD, G20 and European Union (EU) Eastern Partnership (EaP) economies, including as resulting from the COVID-19 crisis and novel sectoral decomposition of Inventory data. It reports on developments in tracking and monitoring fossil fuel support in the context of the G20 and the UN Sustainable Development Goals, and with respect to enhancing the interpretation of tax expenditure data. Finally, the report offers a sequential framework to assist governments assess and address the effects of fossil-fuel support measures and their reform, given ongoing challenges in gaining traction for reform.

This paper explores data and methods to assess the alignment or misalignment with climate mitigation objectives of investments in the construction and refurbishment of residential and non-residential buildings. It takes the United Kingdom (UK) as a case study, where such investments reached GBP 162 billion (EUR 184 billion) in 2019 or 39% of UK gross fixed capital formation. The analysis trials different reference points that lead to varying results and each currently come with limitations in terms of coverage or granularity. Sector-level greenhouse gas (GHG) trajectories indicate that, in aggregate, investments in UK buildings have been insufficient, delayed or not aligned enough with caps set by UK Carbon Budgets, but such trajectories currently lack disaggregation for a more granular and insightful matching with investment data. Energy performance certificates (EPCs) allow for asset-level analyses: for instance, 79% of 2010-2019 investments in new built residential were in relatively energy efficient buildings but only 1% were consistent with more demanding recommendations towards the UK’s objective of reaching net-zero GHG in 2050. The coverage and reliability of EPCs, however, needs to be improved for older buildings, whose deep retrofitting is a major financing challenge. Applying Climate Bonds Initiative criteria for low-carbon buildings identifies investments eligible for green bond financing, but such criteria have partial sectoral coverage and are based on currently most efficient buildings within the existing stock, which makes them relatively easy to meet for investments in new built. Producing more complete and policy relevant assessments of aligned and misaligned investments at national and sectoral levels requires the availability of and access to comparable and granular data on decarbonisation targets and pathways consistent with the Paris Agreement temperature goals, GHG performance of assets, corporate and household investments, as well as underlying sources of financing.