Between USD 5 trillion and 7 trillion is needed annually from multiple sources to achieve the SDG targets, but the global financial architecture is nowhere near meeting this need.
Two-thirds of the 169 SDG targets require implementation at the subnational level, primarily in cities, yet national governments have neither recognized this nor created the enabling environment to deliver the funds and programmes to urban areas.
It is essential for world decision makers to recognize the fact that equipping urban areas to meet the Global Goals is not only critical but actionable.
By Eugénie L. Birch
All agree that the global campaign to achieve the SDGs and the fight to slow climate change have reached a decisive moment. The time span the nations allocated in 2015 to meet these Goals is at the halfway point, but the achievement of their commitments remains elusive. Understanding the fundamental reasons for this failure, including the “why,” “what,” “how,” and “who,” can help us chart the path forward for the next seven years.
Why are we in this predicament? The answer lies in three words: finance; localization; and political will.
Finance: The funds needed to achieve the commitments have not flowed, especially to emerging economies in low-income countries (LICs) and lower-middle-income countries (LMICs), to carry out the needed SDG actions. For instance, in 2023, investment per person in the LICs averaged a meager USD 175 per person, compared with USD 11,535 per person in high-income countries (HICs). Between USD 5 trillion and 7 trillion is needed annually from multiple sources to achieve the SDG targets, but the global financial architecture – funding from the public, private, and philanthropic sectors – is nowhere near meeting this need. Moreover, the quality and speed of deployment of international cooperation are poor, and the mechanisms for monitoring progress remain mired in systems designed for another era.
Localization: Two-thirds of the 169 SDG targets require implementation at the subnational level, primarily in cities, yet national governments have neither recognized this nor created the enabling environment to deliver the funds and programmes to urban areas. In addition, many subnational governments need capacity building, technical assistance, and local reform to undertake SDG-oriented programmes and policies.
Political will: In general, nations fail to recognize the two previous factors. Those controlling the global financial architecture are unwilling to make key reforms to galvanize the necessary sums and/or to drive funding to the subnational levels – while nations, whether governed by unitary or federal arrangements, are reluctant to adjust their respective enabling environments to equip subnational governments to implement the SDGs and climate change commitments.
Simply put, achieving the Global Goals requires transforming finance and providing much larger funding for cities to empower them to play a far more effective role in the sustainable development and climate agendas. At the same time, this funding needs to encompass local capacity building, especially in establishing municipal creditworthiness.
Three important steps accompany this charge. The first and most timely step is to integrate an urban focus into the current efforts towards reform of the global financial architecture and its reinvention as being discussed by the Group of 20 (G20) and UN-designated high-level expert panels. The second step is to craft actionable recommendations to demonstrate viable mechanisms and tools for urban finance. And third, is for global decision makers to adopt and implement the recommendations as soon as possible.
How and who?
Fortunately, there are encouraging efforts underway towards enacting these reforms. In June, during President Emmanuel Macron’s Summit for a New Global Financial Pact, Mayor of Paris Anne Hidalgo, Mayor of Rio de Janeiro Eduardo Paes, and Jeffrey Sachs, President of the UN Sustainable Development Solutions Network (SDSN) launched the Global Commission for Urban SDG Finance to advance a portfolio of recommendations to unlock SDG funding for cities. The Commission’s six task forces address critical areas of SDG financing, including reforming the Multilateral Development Banks (MDBs), augmenting existing and/or creating new funds and institutions, attracting private sector participation, developing an advocacy strategy, recognizing geography and context, and balancing mitigation and adaptation.
Hosted at the University of Pennsylvania’s Institute for Urban Research and composed of finance experts representing the public and private sectors, mayors from the Global South and North, and scholars, the Commission will issue its final report by the fall of 2024, in advance of the UN Summit of the Future, the G20 summit in Brazil, and the UN Climate Change Conference (UNFCCC COP 29).
By 2030, an estimated five billion people will live in cities, and they will continue to play a central role in achieving sustainable development. With the upcoming 78th session of the UN General Assembly (UNGA) and the SDG Summit, it is essential for world decision makers to recognize the fact that equipping urban areas to meet the Global Goals is not only critical but actionable.
Eugénie L. Birch is Nussdorf Professor and co-Director, Penn Institute for Urban Research, and Member, SDSN Leadership Council.