The IISD has published a policy brief on the role of finance and technology in achieving sustainable development. The brief warns that while the world has enough money to fund sustainable development, there is a financing gap and a persistent digital divide to achieve the SDGs.

The brief, authored by Elena Kosolapova, argues that “technology, finance, and capacity building, together with inclusive and equitable globalization and trade, regional integration, and enabling environments” can help address climate change, biodiversity loss, growing inequalities, poverty, and hunger, among other challenges. It acknowledges that without transferring technological and financial resources to developing countries, the world cannot achieve the SDGs and the Paris Agreement on climate change.

The brief traces the history of sustainable development finance since the UN Conference on the Human Environment in 1972, and outlines the current global regulatory landscape for financing sustainable development and climate action, including the Addis Ababa Action Agenda (AAAA) and the Paris Agreement.

According to the brief, “financing remains a major bottleneck”— a challenge exacerbated by “slow growth, high debt, growing trade restrictions, increasing environmental shocks, and the impacts of the COVID-19 pandemic.” It argues the world could bridge the financing gap to achieve the SDGs, estimated at between USD 2.5 and USD 3 trillion per year, if about 3% of global gross domestic product (GDP) went to sustainable development. However, “‘substantial backsliding in key action areas’ has been observed,” the brief warns, including a drop in official development assistance (ODA) of 4.3% in 2018, and a decrease in ODA to least developed countries (LDCs) of 2.2% in real terms. The brief notes that “developed countries’ pledge of raising USD 100 billion per year in climate finance has also proven difficult to achieve.”

The brief outlines “persistent gaps” between developed and developing countries’ access to and use of existing technologies, and points to “a persistent digital divide.” Recognizing technologies’ potential to “promote sustainable development and leave no one behind,” the brief cautions about possible risks that could compromise achievement of the SDGs, such as exacerbated inequalities and job loss, and recommends any tradeoffs be addressed.

Improved alignment between development cooperation and climate action, the brief argues, “can help ensure development financing activities do not undermine sustainable development,” which, it says, can be achieved though leadership, renewed commitment, political will, and global partnership.

The brief was published as part of the ‘Still Only One Earth’ series, which assesses “the successes and shortcomings of five decades of global environmental policy,” focusing on climate action, sustainable energy, wildlife trade, and biodiversity, among other issues. [Publication: Harnessing the Power of Finance and Technology to Deliver Sustainable Development]