6 October 2016: Investing in sustainable infrastructure is critical to reigniting global growth, delivering on the Sustainable Development Goals (SDGs) and reducing climate risk, according to a report published by the Global Commission on the Economy and Climate. The 2016 New Climate Economy report, sub-titled ‘The Sustainable Infrastructure Imperative: Financing for Better Growth and Development,’ identifies the main barriers to financing sustainable infrastructure and suggests actions to overcome them.

The report explains that: significant investment of around US$90 trillion is needed over the next 15 years; the global South will account for roughly two-thirds of global infrastructure investment (about US4$ trillion per year); and transformative change is required regarding how cities are built, how energy is produced and used, how people and goods are transported, and how landscapes are managed.

The report also recommends tackling price distortions, strengthening policy frameworks and institutional capacities, transforming the financial system to deliver the scale and quality of investment required, and ramping up investments in clean technology research, development and deployment. It explains how multilateral and other development finance institutions can support countries and catalyze a “virtuous circle” of action on sustainable infrastructure. These actions will also help realize the 2030 Agenda for Sustainable Development and climate goals in countries and key economic systems.

More specifically, to achieve this agenda, the report recommends that governments, inter alia: phase out agricultural inputs and incentives for urban sprawl, as well as fossil fuel subsidies by 2025 at the latest; introduce strong, predictable carbon prices; develop transition plans to accelerate a scale-up of clean and resilient energy solutions and a phase-out of coal; ensure the integration of climate risk and climate objectives into national infrastructure policies and plans; with investors, agree on common standards for and scale up green bonds; move toward mandatory disclosure standards; with multilateral and bilateral finance institutions, the private sector and investors, work together to scale up sustainable land-use financing; and with the private sector, scale-up innovation in key low-carbon and climate-resilient technologies, triple public investment in clean energy research and development, and remove barriers to entrepreneurship and creativity.

It also recommends that: multilateral and other development finance institutions enable doubling of investments in financing sustainable infrastructure; and cities develop and implement low-carbon urban development strategies by 2020, and prioritize policies and investments in public, non-motorized and low-emission transport, building efficiency, renewable energy and efficient waste management.

The New Climate Economy, the Commission’s flagship project, provides evidence on the relationship between actions that strengthen economic performance and those that reduce the dangerous climate risk. The Global Commission on the Economy and Climate chaired by former President of Mexico Felipe Calderón and comprises former Heads of government and finance ministers and leaders in the fields of economics and business. [New Climate Economy Press Release] [Report Website] [Publication: The Sustainable Infrastructure Imperative: Financing for Better Growth and Development] [Global Commission on the Economy and Climate]