Working Party on Global and Structural Policies

Transcription

1 For Official Use ENV/EPOC/GSP(2008)13 ENV/EPOC/GSP(2008)13 For Official Use Organisation de Coopération et de Développement Économiques Organisation for Economic Co-operation and Development 09-Oct-2008 English - Or. English ENVIRONMENT DIRECTORATE ENVIRONMENT POLICY COMMITTEE Working Party on Global and Structural Policies CONCEPT NOTE ON STRENGTHENING THE ENVIRONMENTAL COMPONENT OF THE OECD POLICY FRAMEWORK FOR INVESTMENT 30 October 2008 ACTION REQUIRED: For discussion. English - Or. English Contact: Xavier Leflaive, Environment and Globalisation Division, Environment Directorate, tel:+(33-1) , xavier.leflaive@oecd.org JT Document complet disponible sur OLIS dans son format d'origine Complete document available on OLIS in its original format

2 TABLE OF CONTENTS INTRODUCTION... 3 WHY MAKE INVESTMENT AND ENVIRONMENT POLICIES MUTUALLY SUPPORTIVE?... 4 Good environmental policies can stimulate investment... 4 Poor environmental policies can deter investment... 5 Investment affects the environment... 6 THE PFI AS A TOOL THAT CAN MAKE INVESTMENT AND ENVIRONMENT POLICIES MUTUALLY SUPPORTIVE... 8 The Policy Framework for Investment: a tool to assist policy makers... 8 The status of the environment in the PFI... 9 NEXT STEPS A systematic analysis Elements for a possible section on environment policy A way forward Appendix 1. Illustrations of a systematic approach References Boxes Box 1. Uncertainties about environmental regulation can deter investment... 6 Box 2. The Global Forum for International Investment

3 INTRODUCTION At its meeting in February 2008, the Working Party on Global and Structural Policies (WPGSP) agreed to prepare a concept note on how the environmental profile of the Policy Framework for Investment (PFI) could be strengthened, with a view to make environment and investment policies mutually supportive. This paper prefigures the note that could be sent to the Investment Committee to make the case for a strengthened environment profile of the PFI and to suggest the content of a greener PFI. The note presents arguments which indicate why investment and environment policies should be made mutually supportive and how the PFI could contribute to that. It proposes a possible way forward. The note has three parts. In the first section, a policy framework is proposed that describes the links between environment policy and investment in a globalizing economy. Particular attention is given to foreign direct investment, although the PFI addresses both domestic and foreign investment. The framework confirms that making investment and environment policies mutually supportive can create net welfare gains, and promote economic growth and sustainable development. The PFI is an instrument that can contribute to making investment and environment policies mutually supportive. It originally set out to support development and the fight against poverty and to promote responsible participation of all governments in the global economy. In the second section, the structure of the PFI is outlined and the current status of the environment in the PFI is assessed. Some suggestions are made in the third section, on how the environmental profile of the PFI could be strengthened. They build on an examination of the main policy areas addressed in the PFI. Some possible next steps are suggested. The note builds on past OECD work in this area (e.g. the environment chapter of the OECD Guidelines for Multinational Enterprises), on the existing literature on the environment dimensions of investment and related policies, and on discussions on the social and environmental dimension of the PFI at the last Global Forum on International Investment, which took place in March 2008 in Paris. 3

4 WHY MAKE INVESTMENT AND ENVIRONMENT POLICIES MUTUALLY SUPPORTIVE? While there are arguments in favour of strengthening the treatment of environmental issues in investment policies and international investment agreements, there are concerns in some parts of the investment community that enhanced social and environmental components in the PFI may impede investment by generating unnecessary complexity, and adding constraints which may encourage investors to locate their investment elsewhere. This, may impact negatively on the competitiveness of the economy. This suggests that the economic case for a more systematic account of environment policies in investment policy frameworks needs to be made. The relationship between environment and investment is multifaceted. Good environmental policies can stimulate investment. Poor environmental policies can generate uncertainties about expected environmental performance, lack of clarity about potential liabilities, and thereby increase risks for investors. At the same time, investment, both domestic and foreign, is important for the environment. In this section, these issues are analysed further, pointing at the need to make investment and environment policies mutually supportive, through appropriate policy design. Good environmental policies can stimulate investment Good environmental policies can stimulate investment in two ways. First, a recent WPGSP report (OECD, 2004a) noted that sound environmental policies are an important driver to attract investment, as firms may seek investments in locations where environmental laws are clear, stable and consistently enforced. Good environmental policies provide investors with security about the level of environmental performance expected from them and their liabilities; they reduce investment risks in all their aspects: financial, legal and reputational. Second, investment in pollution abatement and control activities represents a non negligible part of overall investment in OECD countries. At the turn of the century, the share of this investment in the total gross fixed capital formation in OECD countries varied between 0.3% (in Australia) and 3.7% (in Hungary) (OECD, 2007). Moreover, it is increasingly recognized that private investment is urgently needed to address a range of environmental issues including climate change and water supply and sanitation. The additional estimated amount of investment and financial flows needed in 2030 to address climate change is large compared with the funding currently available under the Convention on Climate Change and the Kyoto Protocol. It amounts to per cent of estimated global gross domestic product (GDP) and per cent of global investment in 2030 (UNFCCC, 2007). Private-sector investments constitute 86 per cent of investment and financial flows. Moreover, particular attention will need to be given to developing countries, because although they currently account for only per cent of global investments, they will require a large share of investment and financial flows. Experts from the UNFCCC remark that national policies can assist in shifting investments and financial flows made by private and public investors into more climate-friendly alternatives, and optimize the use of available funds by spreading the risk across private and public investors. 4

5 In a different (although related) area, a recent OECD publication (OECD, 2006a) highlights the future needs for water-related infrastructure in OECD countries and in emerging and developing countries. The report notes that environmental policies play a critical role in setting investment needs. While pollution abatement in developed countries has been successful in arresting decline, it has added substantially to the costs of providing the appropriate level of water services. This is now possibly the greatest single driver, particularly in the EU. At the same time, uncertainties about the enforcement of these policies, about the time schedules for their implementation, or about the tariffs associated with them can discourage potential investors. Poor environmental policies can deter investment Climate change policies can add risk to the portfolio of power investors. Uncertainty about future policy developments has become an increasing concern of investors in power plants, making the cash inflow of an investment project more difficult to predict. The potential consequences of such uncertainties have been analysed by the International Energy Agency in a recent publication (IEA, 2007). The analysis shows that climate policy uncertainty weakens investment incentives for low-carbon technologies. Uncertainty could also lead to investment choices that would appear sub-optimal in a world of greater policy certainty. Unfavourable effects of policy uncertainty could include: extending the life of existing plant rather than investing in more efficient new plant, modest increases in electricity prices, and the creation of investment cycles that may exacerbate short-term peaks and troughs in generation capacity. Policy measures may limit the negative impact of uncertainty in climate change policy. IEA s analyses indicate that climate policy risks may be brought down to modest levels compared to other risks if policy is set over a sufficiently long timescale into the future. Moreover, risk premiums could be reduced if price constraints could be established that limited future price variability, either for a tax or a trading scheme. These constraints would have to be credible over a long period, with a very low probability that prices would move outside these constraints. Finally, companies will generally be confident in committing capital to projects, even in an uncertain environment, as long as they can establish a competitive advantage over other players in the market. When it comes to regulatory risk, this requires that policy makers establish clear rules, and that companies can be confident that these rules will be applied consistently to all market players, irrespective of ownership structure. IEA s analyses point at implementation and enforcement as major features of environment policy that impact on the investment climate. Environment policy that is implemented in an inconsistent or unfair manner can seriously disrupt investment activities or lead to the relinquishing of assets (see the illustrations in Box 1 below). 5

6 Box 1. Uncertainties about environmental regulation can deter investment The Sakhalin II project is one of the biggest oil and gas developments in the world. It was based on production sharing agreement; the shareholders of the operator company, Sakhalin Energy, are Royal Dutch Shell (55%), Mitsui (25%) and Mitsubishi (20%). In December 2006, the Russian Ecology Ministry decided to reverse the 2003 decision of the state ecological expert department to approve the second stage of the project for the exploitation of part of the Sakhaline 2 oil and gas field. As a consequence, the Russian Ministry of natural resources cancelled Shell s permit to engage stage 2 of the investment project. This decision brought to halt activities related to the development of this project, worth 15.8 billion euros. Shell claimed that it had no doubt its project met the Russian environmental standards and contested the legal basis for the decision of the Russian authorities. The oil company maintained that the claims from the Russian authorities are immaterial only and cannot be the basis for a cancellation. The environmental conditions of the exploitation of Sakhaline 2 by Shell had been questioned by WWF and investigated by the EBRD. Financial experts in Russia claim that environmental performance has been raised only to better control foreign investment in a strategic industry. At the end of 2006, Shell surrendered its majority holding and became a minority shareholder along with the other founding partners. This dispute has created uncertainties for other foreign oil companies operating in the country, such as ExxonMobil and Total. In a similar case in Kazakhstan, Kashagan oil extraction work has been shut down pending new negotiations with the consortium led by independent oil company ENI. Some new share arrangement will be coming up. In that context, ENI and partners will have to pay environmental fines and may have to come up with a new plan for damage mitigation. Source: various websites, including Investment affects the environment On the one hand, investment can simulate the diffusion of clean technologies and processes. The environmental impact of investment is potentially more important in low capital rotation industries, where technology choices can have long lasting environmental implications. On the other hand, it can also exacerbate environmental pressures, especially in countries where environmental governance is poor. In this perspective, foreign direct investment deserves a particular attention, as investors can shift production processes (including polluting activities) from one country to another and as emerging economies, and multinational firms which originated in these countries, play an increasing role in inward and outward investment flows. Foreign direct investment (FDI) is one of the driving forces binding countries into closer economic interdependence. It has grown rapidly in recent years, associated with the deeper liberalisation of national and international investment regimes. This growth has generated debates about the associated impacts of FDI, including on the environment. One view is that FDI encourages countries to lower their environmental standards, or not to raise them, leading to a race to the bottom and the emergence of pollution havens. A counter view is that FDI promotes pollution halos, that is, it supports the establishment of higher environmental standards through the wider adoption of more resource efficient, 6

7 cleaner technologies; it improves both economic and environmental performance through the implementation of more efficient operational and management practices within multinational enterprises (MNEs) and their suppliers; and it helps to generate pressure from consumers for goods and services produced in an environmentally responsible manner. Box 2. The Global Forum for International Investment The OECD Global Forum on International Investment (GFII) seeks to promote investment for growth and sustainable development by engaging governments worldwide and interested stakeholders in peer learning and dialogue on emerging issues facing the investment policy community. The international investment community met in March 2008 in Paris. The overarching theme of the Forum was Best practices in promoting investment for development: Pursuing a common agenda. A special session was organized on the social and environmental dimensions of the policy framework for investment. During that session, we have heard that appropriate social and environment policy can contribute to improve the investment climate, and that this should be reflected more systematically into the PFI. We have also heard concerns that enhanced social and environmental components in the PFI may impede investment, generating unnecessary sophistication and complexity, adding constraints which may invite investors to locate their investment elsewhere and which, at the end of the day, may impact negatively on the competitiveness of the economy. In 1999, an OECD conference (see OECD, 1999) reviewed the evidence regarding the environmental impacts of investment and recommended that: The analytical focus should move beyond pollution havens and halos to examine the net environmental effects of investments, including cumulative and scale effects; More attention should be given to the impacts in different sectors, particularly resource-using sectors 1 ; and Policy and institutional frameworks for integrating environmental and investment goals should be strengthened, particularly in developing countries. Strengthening the environmental profile of the PFI would be one more step forward. 1 Subsequently OECD examined the environmental impacts of FDI in the mining sector (OECD, 2002) 7

8 THE PFI AS A TOOL THAT CAN MAKE INVESTMENT AND ENVIRONMENT POLICIES MUTUALLY SUPPORTIVE In this section, the Policy Framework for Investment is described, and the way it deals with the environment is assessed. It is noteworthy that the PFI belongs to a set of instruments and tools which share the goal of promoting investment. Such tools include the OECD Principles for Corporate Governance and the UN Principles for Responsible Investment. Other instruments focus on international private investments: the OECD Guidelines for Multinational Enterprises, the Risk Awareness Tool for Multinational Enterprises in a Weak Governance Zone. Another set of instruments is geared towards private investment in particular industries, as illustrated by the OECD Principles for Private Sector Participation in Infrastructure 2, or the 2007 OECD Council Recommendation on Common Approaches on the Environment and Officially Supported Export Credits. Some of these instruments have an explicit environmental component. The OECD Guidelines for Multinational Enterprises contain an environmental chapter (see OECD, 2004b) and a Handbook was prepared identifying tools and instruments that enterprises can use to comply with the chapters recommendations. Work is underway to examine how the Principles for Private Sector Participation in Infrastructure could be applied to the water-related infrastructure. The finance community has developed its own instruments for greening investment. At least two instruments have been developed to contribute to this end. The Equator Principles ensure that the projects financed by the financial institutions which have endorsed them are developed in a manner that is socially responsible and reflect sound environmental management practices. The Multilateral Financial Institutions have developed the Common Framework for Environmental Assessment to promote best practices in environmental impact assessment and guide both developed and developing countries in building capacity to align with the best practices (see MFI-WGE, 2005). Thus, strengthening the environment profile of the PFI can align this instrument with other progressive investment-related international instruments. The Policy Framework for Investment: a tool to assist policy makers The Policy Framework for Investment (PFI) was developed to help governments overcome the private investment deficit. The PFI is founded on the 2002 United Nations Monterrey Consensus on Financing for Development which ascribes to governments the responsibility for creating the right conditions for private investment to flourish. The Preamble to the PFI states that its objective is to mobilize private investment that supports steady economic growth and sustainable development, and thus contribute to the prosperity of countries and their citizens and the fight against poverty. 2 Building on the PFI, 8

9 The preamble also states the process through which the PFI was developed and how it should be used. The first part of the PFI presents sets of questions covering the ten main policy domains identified in the Monterey Consensus as having the strongest impact on the investment climate, i.e. investment policy, investment promotion and facilitation, trade policy, competition policy, tax policy, corporate governance, policies for promoting responsible business conduct, human resource development, infrastructure and financial sector development. The questions are meant to help governments design and implement good policy practices for attracting and maximising the benefits of investment. The second part of the PFI presents annotations that provide contextual and additional information to the question sets. The PFI is based on the common values of rule of law, transparency, non-discrimination, protection of property rights in tandem with other human rights, public and corporate sector integrity, and international co-operation. The PFI represents the most comprehensive multilaterally-backed approach to date for improving investment conditions. It was endorsed by the OECD Council at Ministerial level in 2006, when it called on the OECD to continue to work with non-member governments and other inter-governmental organisations to promote its active use. A Policy Brief looks at the PFI and how it can help build prosperity in the global economy (OECD, 2006b). The status of the environment in the PFI Environment policy is not included in the ten policy areas identified by the PFI. This reflects the way in which the Monterrey Consensus on Financing for Development was drafted. Some of the policies included in the PFI have an environmental dimension. This dimension is made explicit in Chapter 7: Policies for Promoting Responsible Business Conduct. One of the questions listed under that theme to help governments determine whether their policies are likely to encourage investment is: How does the government make clear for investors the distinction between its own role and responsibilities and those ascribed to the business sector? Does it actively assume its responsibilities (e.g. by effectively enforcing laws on respecting human rights, environmental protection, labour relations and financial accountability)? Annotations which support this question claim that if roles and responsibilities are clearly distinct, private and public sector actors will be encouraged to play mutually-supporting roles in enhancing economic, social and environmental wellbeing. They also indicate that governments can act to reinforce the business case by providing information about responsible practices (e.g. good performance in the environmental field) and by lowering the costs of developing and adopting responsible practices. In the same chapter, the PFI emphasizes the importance for governments to communicate with business. The annotations suggest that, among others, government-backed instruments for responsible business conduct - such as the OECD Guidelines for Multinational Enterprises - are also important channels for such communication. It is noteworthy that the MNE Guidelines have an environment chapter. The PFI explicitly refers to water as an input to business performance and to water infrastructure and services as a business opportunity. Water is considered to be is an (environmental) industry where the private sector could be involved in management, supply and financing. The PFI also points out that a sound framework is required for these opportunities to materialise; frequent contract disputes and subsequent renegotiations raise questions about the appropriate modalities for private participation in water, particularly in concessions with significant investment commitments. 9

10 NEXT STEPS The previous chapter has shown that the PFI was designed to help governments enhance the investment climate that can contribute to economic growth and sustainable development. The policy framework above has indicated that environment policies bear on the investment climate. It follows that the PFI would be even more effective if it could suggest ways in which environmental and investment policies could be mutually supportive. This can be done in two ways. First, each policy area included in the PFI could be analysed to identify the potential synergies or conflicts with environment policy, and to suggest questions which would help governments exploit the synergies and resolve conflicts. Second, a section on environment policy could be added to the PFI. This would underline the synergies that exist between environment policy and the investment climate. Questions could be suggested, which would help governments to design flexible approaches to strengthen the investment climate in their country, taking advantage of a robust environment policy. Each approach has strengths and weaknesses. In the first approach, environment would be integrated throughout the ten policy areas. However, that may distort the structure of the PFI, and other sectors might have equal claim to be mentioned. Environment may be diluted this way and important issues may not be properly addressed. Should the second approach be followed, there would be a clear statement of how environmental and investment policies could be mutually supportive. Further steps require a coordinated approach with the Investment Community, as the OECD Investment Committee will in the end make the decision on the opportunity to strengthen the environmental profile of the PFI and on the most appropriate way to do it. Intra-secretariat discussions have indicated that the Investment Committee wishes to accumulate experience with the implementation of the PFI. DSTI is currently preparing the PFI Toolkit to assist potential users in implementing the PFI (the first chapters are available at PFI User s Toolkit). When a review of the PFI is undertaken, ENV contribution will serve as an input into the process. The structure of this section reflects these considerations. Suggestions are made as to the revision of the existing sections of the PFI and to the possible inclusion of a section on environment policy. A work flow is proposed to streamline the concept note and to consult further with the Investment Community. A systematic analysis The PFI addresses some 82 questions to governments in 10 policy areas to help them design and implement good policy practices for attracting and maximizing the benefits of investment. There are synergies between the ten areas and environment policy. There are potential tensions as well. These issues can be addressed through a series of questions, which will facilitate flexible approaches to self-assessment and priority setting. The questions will be accompanied with annotations, to provide contextual and additional information. Annotations could give concrete examples of policies that, while firmly pursuing their 10

11 primary objective in one of the ten areas, are also neutral regarding the environment, or can create synergies with environment policy. Without advocating a particular set of policies, the annotations would provide meaningful examples to maximize the positive impact of these policies on the environment. Case studies and examples will be taken from the experience of both OECD and developing countries. Illustrations of reformulations and additional questions to be considered for inclusion into the PFI are appended (see Appendix 1), for the preamble and for a couple of sections. Elements for a possible section on environment policy There is no section on environment policy in the PFI. Adding a section would better capture the potential contribution of environment policy to the investment climate. Should one such section be added, it could be structured around questions which clearly link environmental issues to a better investment climate. It should also reflect principles of transparency and accountability, credible and regular evaluation and policy coherence, which are core principles of the PFI. Some suggestions follow: Has the government taken steps toward a coherent environment policy consistent with its broader development and investment strategy? Is it periodically reviewed to make sure it is responsive to new environmental and economic developments? Does it engage the main stakeholders (including the investment community)? How much is the policy aligned with international environmental agreements? Does the environment policy support the international best practices as regards environment performance of firms? A level playing field at the international level can contribute to a better investment climate. What efforts are being made by the government to reduce uncertainty and the costs associated with environment policy and its enforcement? How robust and integrated the environmental permitting procedure is? Is Regulatory Impact Analysis used in the context of the design and/or revision of environment policy? Regulatory uncertainty, including in the environment domain, can discourage investors. Is environmental impact assessment a regular practice for development projects? Is this practice align with the best practices (i.e. as developed by the Multilateral Financial Institutions- Environmental Working Group; see MFI-EWG, 2005))? To what extent do environmental regulations support poverty reduction, economic development and the government s investment strategy? What initiatives have been introduced that support policy coordination, balancing environmental, social objectives and the incentives for business to invest? If a particular environment policy has a negative effect on the investment climate, has the government considered alternative means of accomplishing public policy objectives? Alternative policy instruments may have different impacts in the investment climate, while achieving similar environmental performance. Has the government considered emulating the successful experiences of other countries in involving the private sector in the development and operation of more efficient environmental infrastructure and services? 11

12 A way forward As for next steps, delegates are requested to comment on how the PFI might be strengthened; by integrating environment into the existing structure and/or by proposing a new chapter. Delegates are also requested to comment on the suggested questions. Issues related to capacities and international co-operation could be considered (sharing the costs of building capacity and improving environmental conditions). The Secretariat would also welcome any case studies and best practices which show how environmental policies can improve the investment climate and, reciprocally, how measures taken to strengthen the investment climate can have a positive impact on the environment. In light of delegates guidance, the secretariat will consult with colleagues in the Directorate for Financial and Enterprise Affairs and prepare a paper for discussion at WPGSP s next meeting. Appendix 1. Illustrations of a systematic approach The preamble The section suggests selected reformulations of the existing preamble of the PFI. The text is the first page of the current preamble of the PFI. Suggestions appear in red. The objective of the Policy Framework for Investment is to mobilize private investment that supports steady economic growth and sustainable development, including environmental performance at firm and country level, and thus contribute to the prosperity of countries and their citizens and the fight against poverty. The economic and social benefits of private investment, both domestic and international and in its many forms, from physical assets to intellectual capital are widely recognised. Private investment expands an economy s productive capacity, drives job creation and income growth, and in the case of international investment, is a conduit for the local diffusion of technological and enterprise expertise and spurs domestic investment, including through the creation of local supplier linkages. Such benefits can act as a powerful force for development and poverty eradication and environmental protection. Yet, while many countries have succeeded in achieving high rates of domestic private investment and attracting substantial international investment as an integral part of their development strategy, others have not been as successful in realising the benefits of investment. The benefits of investment do not necessarily accrue automatically or evenly across countries, sectors and local communities. Countries continuous efforts to strengthen national policies and public institutions, and international co-operation, to create sound investment environments matter most. The Policy Framework for Investment is a tool, providing a checklist of important policy issues for consideration by any government interested in creating an environment that is attractive to all investors and in enhancing sustainable development benefits of investment to society, especially the poor. In this way, the Framework aims to advance the implementation of the United Nations Monterrey Consensus, which emphasised the vital role of private investment in effective development strategies. The Framework should be seen in the broad context of the United Nations Millennium Declaration and recent multilateral efforts to strengthen the international and national environments in which business is conducted, including the Doha Development Agenda and the Johannesburg Declaration on Sustainable Development. In common with those initiatives, it promotes transparency and appropriate roles and responsibilities for governments, business and others with a stake in promoting development and poverty 12

13 reduction, and builds on universally shared values of democratic society and respect for human rights, including property rights. Investment policy This section suggests questions which could be added to the section on investment policy in the PFI to strengthen its environmental dimension. Elements of annotations feature in italics. What steps has the government taken to ensure that investment and environment will be mutually supportive? Are the potential environmental impacts of investment projects systematically assessed and the results discussed in an open and transparent manner? Has the government taken measures to ensure that the quality of the environment will be attractive for investors, and will not deter investment? Poor and decreasing environmental quality may deter investment, in particular as it will not be attractive for (skilled) workers and as it may jeopardise the resources needed in the production process (e.g. water, biodiversity). To what extent does investment policy promote investment that addresses environmental weaknesses in the country? The question is particularly relevant for (but should not be limited to) developing countries. Has the government reviewed bilateral and multilateral investment treaties to determine whether their provisions are compatible with national and international environmental commitments? How actively is the government promoting environmental clauses in its bilateral and multilateral investment agreements? An increasing number of trade and investment treaties include language on social, environmental and anti-corruption issues. Existing treaties should be reviewed to reflect more recent environmental commitments. Trade policy This section suggests one question which could be added to the section on trade in the PFI to strengthen its environmental dimension. Elements of annotations are in italics. Has the government reviewed bilateral trade agreements to determine whether their provisions are compatible with national and international environmental commitments? How actively is the government promoting environmental clauses in bilateral and multilateral trade agreements? An increasing number of trade and investment treaties include language on social, environmental and anti-corruption issues. Existing treaties should be reviewed to reflect more recent environmental commitments. 13

14 References IEA (2007), Climate Policy Uncertainty and Investment Risk, Paris MFI-WGE (2005), A Common Framework for Environmental Assessment. A Good Practice Note ( OECD (1999), Foreign Direct Investment and the Environment, Paris OECD (2002), Foreign Direct Investment and the Environment. Lessons from the Mining Sector, Paris OECD (2004a), Development, Investment and Environment: in Search of Synergies [ENV/EPOC/GSP(2004)14/FINAL] OECD (2004b), Environment and the OECD Guidelines for Multinational Enterprises, Paris OECD (2006a), Infrastructure to Volume 1, Paris OECD (2006b), Policy Brief. The Policy Framework for Investment, Paris OECD (2007), Pollution Abatement and Control Expenditure in OECD Countries, Paris UNFCCC (2007), Report on the analysis of existing and potential investment and financial flows relevant to the development of an effective and appropriate international response to climate change, Dialogue working paper 8 (2007) presented at the Vienna Workshop, August