The OECD, UN Environment and World Bank Group hosted a discussion on the joint initiative, ‘Financing Climate Futures: Rethinking Infrastructure’.
The event previewed a synthesis report that identifies six key areas for aligning financial flows with a pathway towards low-emission and climate-resilient development.
Speakers from the convening organizations, member States and the UNFCCC described how the report is supporting their work.
25 September 2018: The Organisation for Economic Co-operation and Development (OECD), UN Environment Programme (UNEP, or UN Environment) and the World Bank Group hosted a discussion on the joint initiative, ‘Financing Climate Futures: Rethinking Infrastructure.’ The event, convened during Global Goals Week, previewed a synthesis report on ways in which countries can deliver on the objective of making financial flows consistent with a pathway towards low-emission and climate-resilient development.
In his opening presentation, Angel Gurría, Secretary-General, OECD, said a key question for society is “how do we make the Paris Agreement happen, and deliver on our climate and development goals?” He noted that greenhouse gas (GHG) emissions “have taken the climate beyond the conditions in which human societies have developed and thrived,” and underscored the importance of a multi-stakeholder, whole-of-government and global approach. Gurría emphasized the joint initiative’s finding that infrastructure planning policies are “not fit for purpose”, and that solutions require “eco-nomics” to shift away from carbon-intensive forms of infrastructure. Doing so, he noted, means linking to efforts on carbon pricing, the green bond market, and other “gamechangers that will unlock climate-compatible development.”
The joint initiative aims to help governments address questions on how technologies and new business models will shape the future of infrastructure, and determine the extent to which existing policy frameworks and institutions can deliver low-emission, resilient infrastructure, and how public and private actors can redirect financial flows at scale. The initiative’s preliminary synthesis report identifies six areas that are key to aligning financial flows with these objectives, as outlined by Gurría:
- Planning for a zero net emissions future;
- Innovation in technologies, institutions and business models;
- Budgeting that disentangles public budgets from fossil fuel reserves;
- Resetting the financial system in line with long-term climate risks and opportunities;
- Rethinking and reshaping development finance for climate outcomes; and
- Empowering local and sub-national governments to build low-emission and resilient urban societies.
The report notes that energy, transport, buildings and water infrastructure contribute more than 60% of GHG emissions, and calls for rapid investment in sustainable infrastructure to deliver the goals of the Paris Agreement on climate change. A UN Environment press release emphasizes that without such a shift in current investment practices, “carbon lock-in” from power plants under construction or in planning alone will nearly double emissions from power generation. An OECD release flags that governments continue to spend upwards of US$500 billion per year subsidizing oil, coal or gas. Gurría recalled the report’s recognition that only nine countries have submitted long-term strategies (LTS) on low-carbon development for 2050 to the UNFCCC. The full report will be launched in December, at the 24th session of the Conference of the Parties (COP 24) to the UNFCCC in Katowice, Poland. [UN Environment Press Release] [OECD Press Release]
The ensuing panel discussed ways in which the initiative and report can support financing climate futures and the delivery of low-emission infrastructure.
Erik Solheim, Executive Director, UN Environment, described the current problem as political, rather than financial, noting that “no one is elected on a climate platform.” He highlighted that China has “led the way” by linking climate to other areas of policy and society, such as health and economic growth.
Solutions require “eco-nomics” to shift away from carbon-intensive forms of infrastructure, said OECD Secretary-General, Angel Gurría.
Underscoring the importance of the Talanoa Dialogue, Luke Daunivalu, Chief Negotiator, Fiji, highlighted that such dialogues and conversations produce greater understanding of what is or is not working. Telling “stories with purpose,” he noted, can inspire actors to make greater commitments, especially governments as they compile their next round of Nationally Determined Contributions (NDCs).
Naomi Tokashiki, State Minister for the Environment, Japan, outlined how the initiative and report will support Japan in its role as Group of 20 (G20) President in the coming year.
Gemedo Dalle, Minister of Environment, Forestry and Climate Change, Ethiopia, described his country’s Climate-resilient Green Economy Strategy, which, he noted, identifies pillars on technology in transport and infrastructure development, in addition to climate change mitigation and other activities as supporting Ethiopia’s climate and development goals.
Laura Tuck, Vice President for Sustainable Development, World Bank Group, recognized the report’s identification of actions that multilateral development banks (MDBs) can take on financing climate-resilient infrastructure directly, creating the business environment to attract investment, and leveraging financing through investments they put up. She acknowledged the report’s call “to be bold, scale up and push further,” also working with client countries to bring their NDCs into decision making.
Patricia Espinosa, Executive Secretary, UNFCCC, emphasized the importance of capacity building, recalling Gurría’s comment on few countries submitting LTSs, which, she noted, points to the complexity of putting in place such programmes of work for a country. Espinosa flagged that every government expenditure should be aligned with – or at least not run counter to – the goals of the Paris Agreement, flagging subsidies as being in need of reform.
Norbert Gorissen, Deputy Director-General, German Federal Ministry of the Environment, Nature Conservation and Nuclear Safety (BMU), closed the event by reiterating the need to strengthen institutional partnerships, develop clear sets of actions as the report begins to do, and go beyond a business-as-usual (BAU) approach.
Event moderator Rodolfo Lacy, OECD, noted that the initiative responds to an invitation from the 2017 G20 Hamburg Climate and Energy Action Plan. The initiative was launched in April 2018, with support from the Government of Germany. [Initiative Homepage] [Financing Climate Futures: Rethinking Infrastructure: Synthesis and Key Messages for High-level Discussion] [SDG Knowledge Hub Sources]