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Countries in Asia and the Pacific face a heightened risk of flooding as disasters increase worldwide due to climate change. Yet these countries often lack the infrastructure necessary to prepare for and respond to floods effectively. When flood protection measures exist, they generally rely only on grey, hard-engineered infrastructure, which has been increasingly challenged in recent years. Nature-based solutions (NbS) offer a new approach for flood management, with several co-benefits beyond the reduction of risks. This approach has gained recognition from policy makers in the region, but they are confronted with a number of challenges, including the lack of a clear, common definition and guidelines, as well as financing issues. The growing imperatives of climate adaptation call for complementary, innovative and forward-looking solutions, such as a combined approach incorporating both NbS and grey infrastructure.
This report analyses the global trade in used cars and how the transition to electric vehicles may impact it. The analysis explores the quality and age of used vehicles traded globally and maps out how they are traded from developed economies to emerging markets. The report reviews recent importer and exporter policy announcements and uses quantitative analysis, for the first time, to understand how policies may impact the flows of used vehicles between countries. It evaluates potential scenarios of electric vehicle adoption in emerging economies through used vehicle imports.
This paper discusses five innovation policy imperatives critical to achieving green and digital transitions: coordinated government, stakeholder engagement, policy agility and experimentation, directionality and support for breakthrough innovation. The paper provides policy examples from Germany, based on the OECD Review of Innovation Policy: Germany , and other countries to illustrate in what ways countries have addressed these imperatives. Overall, the quality and scale of these policy responses need to increase if transitions are to succeed. Open questions for future policy research are also highlighted.
Extended Producer Responsibility (EPR) is a policy approach that makes producers responsible for their products at the post-consumer stage of the lifecycle. It has been widely adopted by governments and companies across the OECD membership and beyond and is currently most commonly used for electronics, packaging, vehicles, and tyres. The success of EPR in increasing material recovery rates has triggered a debate about expanding the use of EPR to additional product groups. Additionally, there is a debate about expanding producer responsibilities to additional impact categories, which go beyond the traditional use of EPR to cover end-of-life costs that occur at the domestic level. This paper presents a discussion of relatively novel applications of EPR to additional product groups (plastic products beyond packaging, textiles, construction materials, and food waste) and to environmental impacts (design considerations, pollution and littering) that occur throughout the product lifecycle. Based on select case studies, this report evaluates the successes and challenges that early adopters of applying the EPR approach to new product groups or additional environmental impact categories have experienced. It reviews the arguments for further application of EPR, possible limitations and provides guidance on when and how to best apply an EPR.
As the global benchmark in educational assessments, PISA results are always hotly anticipated. The eighth round of PISA assessment was originally planned to take place in 2021 but the disruption caused by COVID-19 forced the assessment to be postponed by a year. The first results of PISA 2022 will be unveiled in two volumes on 5 December 2023. The focus of PISA 2022 is mathematics, with an emphasis on mathematics reasoning, to highlight its importance in tackling complex real-life challenges. The first volume examines how student performance in mathematics, reading and science as well as equity in education evolved before and after the pandemic. The second volume of PISA 2022 identifies “resilient education systems” that maintained or promoted student learning, equity, and well-being amid the pandemic.
This working paper examines the role of networks and rural-urban linkages to absorb and enhance innovation in rural regions, placing a special focus on the distinctive characteristics of rural areas that drive the different ways they adopt and diffuse innovation. After a review of the literature on innovation and innovation adoption through networks and linkages for rural areas, three enablers of innovation absorption and diffusion through networks and linkages are discussed: place-based networks focusing on digital infrastructure; linkages between people via migration flows; and firm-based networks including university-industry linkages, international trade and foreign ownership, and clusters. It also provides some policy-takeaways.
Trade in value added (TiVA) indicators are increasingly used to monitor countries’ integration into global supply chains. However, they are published with a significant lag - often two or three years - which reduces their relevance for monitoring recent economic developments. This paper aims to provide more timely insights into the international fragmentation of production by exploring new ways of nowcasting five TiVA indicators for the years 2021 and 2022 covering a panel of 41 economies at the economy-wide level and for 24 industry sectors. The analysis relies on a range of models, including Gradient boosted trees (GBM), and other machine-learning techniques, in a panel setting, uses a wide range of explanatory variables capturing domestic business cycles and global economic developments and corrects for publication lags to produce nowcasts in quasi-real time conditions. Resulting nowcasting algorithms significantly improve compared to the benchmark model and exhibit relatively low prediction errors at a one- and two-year horizon, although model performance varies across countries and sectors.
Building on an approach pioneered in the OECD’s Taxing Energy Use for Sustainable Development report, this paper develops a methodology to estimate effective carbon rates net of pre-tax fossil fuel support: the Net Effective Carbon Rates (Net ECR). This exercise is made possible by combining the two OECD databases: the Taxing Energy Use and Effective Carbon Rates database (the backbone of the newly established OECD series on Carbon Pricing and Energy Taxation) and the Inventory of Support Measures for Fossil Fuels.
The paper then explores potential use cases of this new indicator. In particular, it explains how the Net ECR can be used to calculate fossil fuel support (FFS) against external carbon pricing benchmarks and why such an approach facilitates comparisons of FFS across countries and over time. The paper’s conclusions include avenues for future research.
The paper discusses the implications of recent advances in artificial intelligence for knowledge workers, focusing on possible complementarities and substitution between machine translation tools and language professionals. The emergence of machine translation tools could enhance social welfare through enhanced opportunities for inter-language communication but also create new threats because of persisting low levels of accuracy and quality in the translation output. The paper uses data on online job vacancies to map the evolution of the demand for language professionals between 2015 and 2019 in 10 countries and illustrates the set of skills that are considered important by employers seeking to hire language professionals through job vacancies posted on line.
The OECD Income Distribution Database (IDD) plays a leading role in providing evidence, and in monitoring and analysing international income distribution statistics to inform policy debate. In most OECD countries, official income distribution statistics are usually delivered with time lags varying from two to three years. This paper examines the growing use by statistical offices of nowcasting techniques based on microsimulation models to produce more timely provisional estimates, and examines the advantages and challenges associated with these techniques. The paper also presents provisional estimates of income inequality in 2020 for a selection of OECD countries, based on a compilation carried out by the OECD Secretariat in collaboration with Eurostat and national statistical offices. Finally, it discusses potential future developments and applications of these techniques.
Accurate measurement of shipbuilding capacity is critical to inform market stakeholders of excess capacity issues. This report presents several approaches to improve the estimates of shipbuilding capacity. It shows how the use of average production would allow for smoothening the proxy of capacity in the yard-by-yard production approach. It discusses how firm level indicators, such as productivity, can also be considered. An analysis of productivity developments for a sample of shipbuilding firms shows that their productivity evolves in function of the market situation which, therefore, should be taken into account in the proxies of capacity based on yard production. Finally, the report studies how mergers and acquisitions of shipbuilding firms may impact capacity.
Rising self-employment rates in U.S. tax data that are absent in survey data have led to speculation that tax records capture a rise in new “gig” work that surveys miss. Drawing on the universe of Internal Revenue Service (IRS) tax returns, we show that trends in firm-reported payments to “gig” and other contract workers do not explain the rise in self-employment reported to the IRS; rather, that increase is driven by self-reported earnings of individuals in the EITC phase-in range. We isolate pure reporting responses from real labor supply responses by examining births of workers’ first children around an end-of-year cutoff for credit eligibility that creates exogenous variation in tax rates at the end of the tax year after labor supply decisions are already sunk. We find that exposing workers with sunk labor supply to negative marginal tax rates results in large increases in their propensity to self-report self-employment—only a small minority of which leads to bunching at kink-points. Consistent with pure strategic reporting behavior, we find no impact on reporting among taxpayers with no incentive to report additional income and no effects on firm-reported payments of any kind. Moreover, we find these reporting responses have grown over time as knowledge of tax incentives has become widespread. Quantitatively, our results suggest that as much as 59 percent of the growth in self-employment rates, and all counter-cyclicality, can be attributed to changes in reporting behavior that are independent of changes in the nature of work. Our findings suggest caution is warranted before deferring to administrative data over survey data when measuring labor market trends.
SMEs and entrepreneurs are of critical importance for reaching climate objectives. They have a significant environmental footprint on aggregate, but also make important contributions to reaching net zero through their innovations and greening efforts. This paper discusses the importance of taking entrepreneurs and SMEs into account in climate and environmental policies. It analyses the drivers and barriers of green entrepreneurship and the greening of SMEs, and discusses policy options to support these objectives.
The increasing importance of services trade in the global economy contrasts with the lack of timely data to monitor recent developments. The nowcasting models developed in this paper are aimed at providing insights into current changes in total services trade, as recorded in monthly statistics of the G7 countries. Combining machine-learning techniques and dynamic factor models, the methodology exploits traditional data and Google Trends search data. No single model outperforms the others, but a weighted average of the best models combining machine-learning with dynamic factor models seems to be a promising avenue. The best models improve one-step ahead predictive performance relative to a simple benchmark by 30-35% on average across G7 countries and trade flows. Nowcasting models are estimated to have captured about 67% of the fall in services exports due to the COVID-19 shock and 60% of the fall in imports on average across G7 economies.
In light of recent education reforms, Brazil is currently considering a series of changes to the purpose and design of its Basic Education Assessment System (Sistema de Avaliação da Educação Básica, SAEB), which has been a critical source of information about student learning outcomes for the past 30 years. To inform these discussions, the OECD was invited to review a set of policy proposals for reforming the current SAEB so that it more closely aligns with Brazil’s new learning standards and provides data to support a range of education actors - from the classroom to the ministry – in their efforts to raise educational performance and reduce inequalities. The findings from this OECD Review are set out in the below policy perspective.