Leading economists and political figures including former President of Mexico Felipe Calderón and former UK environment Minister Lord Nicholas Stern have this week warned that that more than $90trn (£70m) of infrastructure investment will be needed to deliver a climate-resilient, sustainable economy.
Governments and financial institutions are urged to scale up capital for green infrastructure over the next 15 years to spur global growth, deliver on the Sustainable Development Goals (SDGs) and reduce climate risks in line with the Paris Agreement, according to a new report launched by the Global Commission on Thursday (6 October).
The report suggests that the current low interest rates and rapid technological change mean that this is an “especially opportune moment for sustainable infrastructure-led growth”.
The report highlights a range of barriers that hamper private investment flows to sustainable infrastructure, including high transaction costs, unfavourable investment regulations and policies, and a lack of transparent and bankable project pipelines, most notably in lower-income developing countries.
The Global Commission identifies four key areas where concerted action can help overcome these barriers and boost sustainable infrastructure investments. Fundamental price distortions such fossil fuel subsidies must be tackled collectively, the report suggests, to improve incentives for investment and innovation, and to generate revenue that can be directed to poorer countries.
Global Commission chair Calderón said: “Investing in sustainable infrastructure is essential to solve all the world’s most pressing problems. It’s key to reigniting global growth. It’s key to reducing poverty. And it’s key to meeting the Paris Agreement. Infrastructure can be the pillar on which we build a sustainable economy, or it can crumble beneath us. It all depends on whether we get financing right, only then will capital fully shift in the low-carbon direction.”
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