The document summarizes a draft OECD report for the 9th Environment for Europe Ministerial Conference. It discusses progress made on green economy transitions in Eastern Europe and Central Asian countries over the past 5 years, as well as ongoing challenges. Key achievements include new national strategies and climate pledges. Challenges include lack of funding for sustainable infrastructure and capacity constraints. The report will continue being developed over the coming months before its publication.

1. DRAFT KEY MESSAGES FROM
THE DRAFT OECD REPORT FOR THE 9TH
ENVIRONMENT FOR EUROPE MINISTERIAL
CONFERENCE
For discussion at the 2022 GREEN Action Task Force Annual Meeting
[Document ENV/EPOC/EAP(2022)5]
Tbilisi, Georgia
28 June 2022
GREEN Action Task Force Secretariat

2. Context: The Task Force members have agreed that the OECD
secretariat would develop a report, as a contribution to the EfE
Ministerial, aimed to:
1. Take stock of progress on policy developments towards green
economy transition in the EECCA countries
2. Highlight selected examples of collaboration between
EECCA and the Task Force, along with partners
3. Provide an outlook for the future, including action points
for the Task Force to better support EECCA countries
Context and Objectives of the report

3. A proposed structure of the (full) report
1. Key messages and future directions of the TF
(i.e. Draft Synthesis chapter)
2. Recent socioeconomic and environmental trends
towards sustainable development in EECCA
3. Progress on mainstreaming green economy in
national strategies and plans in EECCA
4. A focus on finance for green growth in EECCA

4. Q1. What are the most important achievements on
promoting green economy transition over the past 5 years
in your country (or countries you’ve worked with)?
Q2. What are your key challenges to further advancing
green economy agenda over the next 5 years?
Discussion questions for this session

5. • Overarching national strategies and programmes on green
economy (KZ, KG, MD, UA, UZ)
• Nationally Determined Contributions (All)
net-zero GHG emission pledges by mid-century (AM, KZ, UA,
UZ)
• National Adaptation Plans
(AM submitted, others developing, including a Central Asia
regional adaptation strategy)
Integrating environmental consideration into national
and sectoral development policies

6. • Modernisation of broader environmental policies and
legislation at both strategic and technical levels
(AM, GE, KZ, MD, UA, UZ)
– Reforms on environmental codes and laws
– monitoring of implementation, and enforcement and compliance
promotion
• Strengthened institutional arrangements and re-
establishment of environmental ministries
(MD, KZ, UA)
Integrating environmental consideration into national
and sectoral development policies

7. • Enhanced effort to align environmental policies with EU laws
and standards in the context of the EU Association
Agreements (Eastern Europe and Caucasus), such as:
– EU Water Framework Directive
– EU Industrial Emissions Directive
– EU Environmental Liability Directive
• Integration of green stimulus measures into COVID-19
pandemic response and recovery packages in EECCA
• Impacts of the war in Ukraine on energy and food security in
EECCA region
Emerging trends that drive the green economy
agenda in EECCA

8. • Alignment of the policy objectives of financial-sector
development with their national climate and environmental
targets
– Sustainable Finance Roadmaps (GE, KR)
– ESG disclosure policies (GE, KZ)
– Green bonds issuance (AM, KZ, UR)
• Increasing interest in reforming / establishing dedicated
public funds for green investments
Developing green financial systems

9. • Certain progress on energy- and CO2-productivity indicators
(GDP/TPES) despite the remaining gap (e.g. compared to EU average).
• Welfare costs of premature deaths due to air pollution (PM2. 5)
represent up to 12% of GDP in EE and Caucasus (twice higher than the
global average)
Improving environmental footprint of economic
activities despite the need for further improvement
Source: OECD.stats
Green Growth
Indicators
Energy productivity in EE and the Caucasus
[USD 2015: Energy productivity, GDP/ TPES]

10. • Legal and regulatory gaps to implement actions towards national targets
on environment and climate
• Investment in sustainable infrastructure not amounting to the
transformative scale needed for achieving national goals on green
economy and climate.
• Insufficient capacity and head count of national experts on subject areas
• Co-ordination challenges due to fragmented institutional frameworks (e.g.
water resource management)
• Financing:
– Developing good quality projects,
– Accessing (affordable) financing and
– Using it effectively for implementation of green economy strategies and climate
action
• Political situations in several EECCA countries (domestic and intl.)
delaying environmental policy reforms
Challenges still persist

11. The need for fossil fuel subsidy reforms is well recognised, but
the progress on such reforms remains slow.
Challenges still persist.
Trends on fossil fuel subsidies in EE and the Caucasus [Million USD]
Source:
OECD
Fossil-Fuel
Subsidies
database

12. Stimulus packages leaning heavily towards business-as-usual
type activities, rather than the low-carbon investments required
Challenges still persist
Total funding allocated by environmental categorization in EECCA
Source: OECD
EECCA Green
Recovery Database

13. • Need for tailoring approaches to green economy transition,
given the increasing diversity among EECCA countries
• Economic recovery trajectories from COVID-19 pandemic
• Projected impacts of climate change and possible policy
responses
– (e.g. temp. rise with a range from 3°C to 7°C for the period of 2071-2100 in
Central Asia)
• Compounding risks between climate hazards, and broader
socioeconomic, geopolitical and security-related challenges.
Increasing uncertainties and diversity associated with
green economy transition

14. Timeline Action
1 July – 25 July Further development of substantive chapters within
the OECD Secretariat
26 July – 15 August Review by the Task Force members
16 August – 26 August Revision of the draft report
End of August Submission of the manuscript to UNECE
Beginning of October Publication as an OECD report
Next steps for the development of the report

15. Q1. What are the most important achievements on
promoting green economy transition over the past 5 years
in your country (or countries you’ve worked with)?
Q2. What are your key challenges to further advancing
green economy agenda over the next 5 years?
Discussion questions for this session