OECD - SOME BAD NEWS AND SOME GOOD

The Organisation for Economic Co-operation and Development has today warned of the threat of global stagflation due to rising commodity prices and slower than expected growth.

This comes at the same time as the the OECD publishes a major report entitled "Towards Green Growth", which is upbeat on the potential of sustainable development to tackle global economic and other problems whilst meeting environmental sustainability criteria. Monitoring and delivery mechanisms are also identified.

The good news and the bad has particular relevance for China, the engine of the world economy, whose growth forecast for this year has been downgraded by the OECD.

A report released by the Chinese government in 2006 revealed that roughly 3% of the country's annual GDP had been offset by economic loss through environmental degradation - a figure than some think is too conservative (Nature 448, 2007).

The key issue is whether "green growth" - an oxymoron for many environmentalists - can become a reality, and within a realistic timescale. Political interventions will be essential, and the OECD has highlighted the use of government bonds as a core funding mechanism for developing renewables and other green technologies.