High-Level Opening Session

Mathias Cormann, OECD Secretary-General, opened the 2022 GGSD Forum by highlighting that countries face three intertwined challenges: cushioning the impact of energy price rises on the vulnerable, shoringup energy security, and progressing towards carbon neutrality by 2050. Three key actions can help to jointly meet these objectives. First, ensuring that the goals of energy security and emissions-reduction are aligned. Second, since half of the emissions reductions necessary to meet carbon neutrality targets by 2050 needs to be delivered by technologies that are not yet commercialised, governments need to support further research on such technologies. Missionoriented innovation approaches may help to increase the effectiveness and efficiency of innovation policies. Third, there is a need to improve policies and regulatory frameworks to address the constraints faced by smalland medium-sized firms for green innovation.

Kerri-Ann Jones, OECD Deputy Secretary-General, kicked off the panel discussion by highlighting that the mandate of the annual GGSD Forum is to bring together OECD Committees to engage in multidisciplinary dialogue. In this context, she welcomed the participations by delegates of several OECD Committees and their secretariats in the Forum sessions, along with business representatives

Mariana Mazzucato, Professor in Economics of Innovation and Public Value at the University College London, opened her scene-setting presentation by calling on governments to shift from a market-fixing to market-shaping approach, and highlighted that the Apollo Programme offers important examples of how to design such policies. Then, she argued that a mission-oriented approach should be: inspirational and with a clear direction; ambitious but realistic in terms of research and innovation objectives; cross-disciplinary, cross-sectoral and drive multiple bottom-up solutions. Then, she stressed that cities are also starting to apply a mission-approach to some of their challenges, thus it will be important to promote knowledge exchange across different levels of government to ensure sharing of best practises and policy alignment. She concluded by emphasising the need for conditionality in publicprivate partnerships and subsidies, and cited the example of COVID-19 support to airline companies in France that required them to commit to accelerate actions for the low-carbon transition.

Stuart Nash, Minister of Economic and Regional Development, Tourism, Small Business and Forestry in New Zealand, highlighted that there is growing agreement on the need to consider improvements in well-being among the key metrics used to evaluate economic performance. New Zealand is the first country in the world to introduce a requirement to assess all budget allocations against their impact on different aspects of well-being such as resilience, sustainability, inclusion and productivity. Then, he stressed the role of SMEs in driving an inclusive transformation, as over 50% of New Zealanders work in businesses with fewer than 100 employees. In the past 5 years, the government has invested over NZ$ 4 billion in infrastructure and community projects, and provided concessionary loans to SMEs and start-ups.

He concluded that transforming traditional extractive economies into sustainable, high-wage, and circular economies will only be possible through innovative partnerships underpinned by a shared new vision of success – one that is values-driven, purpose-led, and mission-oriented.

Micheala Spaeth, Ambassador, Permanent Representative of Germany to the OECD, highlighted that the double shock of the COVID-19 pandemic and the Russian large-scale attack on Ukraine created an opportunity to accelerate the green transformation: fossil fuel dependency is damaging for the climate and diminishes economic sovereignty of European countries. She underlined that the transition to a zero-carbon economy will have geopolitical consequences, including the development of new trading relations. New trading partners need to be chosen wisely: prosperity and security must go together with human rights. Then, she underlined that research and innovation are the main levers of a successful energy and sustainability transformation. The Germany’s Research for Sustainability Strategy, which has a €4 billion budget, will focus on three main themes: climate, natural resources, and good living conditions. She concluded by highlighting the role of green hydrogen to drive the transformation towards sustainable and climate-neutral societies.

Javiera Petersen, Undersecretary of Economy and Small Business at the Chilean Ministry of Economy, Development and Tourism, underlined that sectors targeted by green policies have different level of technological capabilities and needs for improvement across countries. In emerging economies, green innovation policies must contribute to the building of domestic productive and technological capacities, economic diversification and the shift towards knowledge-intensive exports. An understanding of the complex and intertemporal relations between production and environmental sustainability is needed for sound policy design. Such approach lies at the heart of the green taxes chapter of the fiscal reform proposed by Chilean government, which aims to increase government revenues and promote green structural reforms in a fiscally responsible manner. Finally, she remarked that the definition of what is green and sustainable is a political decision that requires social consensus. Therefore, a strong democracy is a necessary condition for any policy that seeks to address the current climate crisis.

Jens Lundsgaard, Deputy Director at the OECD Directorate for Science, Technology and Innovation, highlighted that the key green transition challenge is the need to develop breakthrough technologies at a record speed. This would require three main elements: investing in R&D, collaborating around mission-oriented innovation, and linking science and industrial transformation. Green Recovery programmes marked a welcome increase in public R&D expenditures in low-carbon technologies, which had remained flat for decades. But this level of funding must be sustained over the longer-term and complemented by market-pulls policies, such as carbon pricing. Then, he agreed with Professor Mazzucato that mission-oriented approaches can help to accelerate green innovation, and highlighted OECD work on analysing and distilling best-practises for their implementation. Finally, he stressed the importance of linking scientists working on cuttingedge research with blue collar workers to support breakthrough innovation.

The open discussion moderated by DSG Jones focused on how priorities for green science and innovation have changed after the shocks of the pandemics and the war in Ukraine. Micheala Spaeth underscored that there is stronger sense of urgency and that it would be important to work on different low-carbon technologies to avoid “putting all eggs in one basket”. Jens Lundsgaard highlighted that high gas prices are creating a massive push for innovations, including in low-carbon technologies. Javiera Petersen underlined that institutional mechanisms to foster dialogue and build political consensus are needed for a fast, green, and just transition. She also welcomed the creation of the Climate Change Fund for Loss and Damage at COP27. Stuart Nash highlighted that dialogue between politicians and communities about how to ensure a better future has improved, but much more work needs to be done to involve all stakeholders. As SMEs account for than 70% of jobs in OECD countries, it is crucial to involve them.