Tuesday, 3 June 2008

OECD boss hails high oil prices

The soaring cost of oil is welcome as it sends a clear signal to consumers and firms to curb their use of fuel, the head of the OECD has said.

Speaking at the annual meeting of the world's richest nations, Angel Gurria said it would be "disastrous" if they cut fuel taxes or subsidised prices.

"The best solution to high oil prices is high prices" to cut demand, he said.

OECD members are trying to agree plans to tackle climate change and lessen the effects of the world financial crisis.

Time is running out to negotiate a new post-Kyoto treaty on climate change.

'Key challenge'

The Organisation for Economic Co-operation and Development's annual meeting comes as the world is facing a sharply slowing economy and soaring oil prices, which recently rose above $135 a barrel.

The OECD is uniting business, pressure groups and governments in an effort to find common ground on how to cut greenhouse gas emissions and slow global warming.

The meeting will examine the feasibility of increasing nuclear energy and bio fuels to meet growing energy needs.

And it will look at the role companies can play in encouraging clean technology.

But Mr Gurria's comments on the cost of oil will prove controversial at a time when the UK government among others is under growing political pressure to drop plans to tax the most-polluting cars more heavily.

By Steve Schifferes
full article

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