OECD Environmental Performance Reviews: Luxembourg 2020
Luxembourg has made progress in decoupling environmental pressures from economic growth, treating wastewater and managing waste and materials. It has also positioned itself as an international centre for green finance. Yet, it remains one of the most carbon- and material-intensive economies in the OECD. The country is a crossroads for freight traffic and attracts thousands of daily cross-border commuters. This exacerbates greenhouse gas emissions, air pollution and road congestion. Urban sprawl, landscape fragmentation and agriculture exert strong pressures on biodiversity.
To steer its economy towards a greener model, Luxembourg has set ambitious environmental objectives. Greening taxation, providing stronger price signals, promoting eco-innovation and the circular economy, mainstreaming biodiversity into all policies, and investing in low-carbon infrastructure and sustainable mobility, should be priorities.
This is the third Environmental Performance Review of Luxembourg. It evaluates progress towards green growth and sustainable development, with special chapters focusing on two major issues: air quality and mobility, and biodiversity.
Also available in: French
Executive summary
Luxembourg is a prosperous economy and financial centre, characterised by a strong international interdependence, an attractive labour market and a growing number of inhabitants and cross-border workers. Until the health crisis caused by COVID-19, its economic growth was well above that of the OECD area. In this context, the country has pursued an ambitious, cross-cutting environmental policy, with some objectives going beyond international and European commitments. The decline since 2005 in energy consumption, greenhouse gas (GHG) emissions and major air pollutants reveals a decoupling from economic growth. This goes hand in hand with a general improvement in air quality. Luxembourg has also caught up in terms of wastewater treatment and tripled the share of renewables in its electricity production.
Also available in: French
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