23 June 2021
Connecting Sustainable Infrastructure Policy with on the Ground Finance
Photo Credit: Chris Barbalis on Unsplash
story highlights

Governments have the opportunity to close the infrastructure gap by promoting a green recovery from COVID-19—especially in health, energy, logistics, and connectivity.

The event sought to identify solutions to finance the infrastructure gap and build capacity aligned with the SDGs.

By Alice Jetin Duceux

The UN Environment Programme (UNEP) and the Asian Infrastructure Investment Bank (AIIB) held a high-level dialogue on Integrated Approaches to Sustainable Infrastructure Investment. Opened by UNEP Executive Director Inger Andersen and AIIB President Jin Liqun, the 5 May 2021 dialogue involved 11 speakers, including UNEP, AIIB, and partner organizations.

Andersen highlighted how COVID-19 revealed major infrastructure inequalities—health, social, energy, digital, and transportation—that cost lives and perpetuate poverty. Badly designed infrastructure exacerbates climate change, biodiversity loss, pollution, and waste. She stressed the need to promote sustainable infrastructure with intent, smart design, and holistic planning.

Jin stated that international development banks have a major role to play in a green recovery, and presented AIIB’s roadmap in supporting sustainable infrastructure.  AIIB’s first corporate strategy mandates 50% of all financing approvals to be climate-related by 2025. He underscored strong complementarity between UNEP’s global perspective and AIIB’s project-level investments.

Infrastructure Gaps

Sustainable infrastructure investment remains below levels necessary to transition to a low-carbon economy. As noted by Andersen, there is a major infrastructure investment gap in Asia of USD 459 billion annually. In the panel discussion, Kumi Kitamori, Head of Green Growth & Global Relations Division, Organisation for Economic Co-operation and Development (OECD), pointed to the unique opportunity for governments to close infrastructure financing gaps by promoting a green recovery from COVID-19—especially in health, energy, logistics, and connectivity.

Cultivating a Green Recovery

Jin stressed that green infrastructure will be fundamental. He asserted that development and climate action are not mutually exclusive; investing in sustainable infrastructure and zero-carbon economies will promote growth and could add millions of jobs. Andersen recommended investing in renewable energy, nature-based solutions, and integrating built and natural infrastructure in order to create millions of jobs and deliver trillions in benefits.

Andersen expressed regret that less than 20% of the 14 trillion dollars committed to COVID-19 recovery is considered green. In addition, Kitamori noted unequal sectoral allocation of green spending: funds have supported energy and surface transport sectors, while maritime and aviation sectors lag behind. Green funds are almost exclusively allocated to research and development, with little support for capacity building and training workers, she said.

Adaptation, Innovation, and the Public Sector

Jin stressed that COVID-19 and climate change represent interconnected challenges, and solving them requires commitment and solidarity. He shared that AIIB opened a USD 13 billion crisis recovery facility to fight the pandemic and strengthen public care systems. AIIB is now expanding into education and capacity building.

Erik Berglöf, Chief Economist, AIIB, noted that AIIB has expanded its definition of sustainability towards additional social and health-related dimensions. Here, opportunities were highlighted for UNEP and AIIB to promote a shared OneHealth approach by connecting human and ecosystem health. The World Health Organization (WHO) uses ‘One Health’ as an approach for designing and implementing programmes, policies, legislation, and research in which multiple sectors communicate and work together to achieve better public health outcomes. 

Seth Tan, Executive Director, Infrastructure Asia, stated the importance of public-private partnerships (PPPs) in designing, planning, and constructing sustainable infrastructure. Lan Yan, Deputy Director, Secretariat of the Belt and Road Initiative International Green Development Coalition (BRIGC), described their “traffic light” system, which allows BRIGC to easily classify infrastructure projects by environmental impact. Louis Downing, CEO, Global Infrastructure Basel Foundation, warned that private sector outsourcing contributes to a global brain drain, limiting public sector planning capacity.

Life-cycle approaches to new and existing infrastructure are at the core of UNEP’s approach to sustainable infrastructure. Rowan Palmer, Sustainable Infrastructure Partnership Lead, UNEP, highlighted three imperatives: sustainable infrastructure investments should be needs-based; investments ought to be articulated at the systems level; and investors must recognize that infrastructure embodies interconnected systems. UNEP has expanded on this thinking in the International Good Practice Principles for Sustainable Infrastructure, a series of case studies and an online tool navigator co-managed with the Deutsche Gesellschaft für Internationale Zusammenarbeit GmbH (GIZ).

Nature Works

Participants focused on nature-based solutions as an efficient alternative to grey infrastructure. Terry Townsend, Advisor, Paulson Institute, highlighted the global biodiversity financing gap of USD 700 billion, outlining how regenerative agriculture, upstream watershed protection, and coastal restoration can deliver valuable benefits. Professor Kongjian Yu, Peking University, shared the success of water-based “sponge cities” in improving flood adaptation, water quality, and climate resiliency.

Sustainable infrastructure sits at the crossroads of interconnected systems, and collaboration between stakeholders is necessary moving forward. This discussion illustrates how partners can find joint solutions to finance the infrastructure gap and build capacity aligned with the SDGs, as concluded by Fulai Sheng, Economic and Trade Policy Unit Head, UNEP. The scale of COVID-19 recovery packages is unprecedented. Choices made today will impact the world for decades. Stakeholders have an opportunity now to promote a green recovery on the ground and strengthen cooperation for a sustainable infrastructure future.

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By Alice Jetin Duceux, research intern, Sustainable Infrastructure Partnership, UNEP

The summary content above is based on the speeches from the event. UNEP’s summary has not independently verified the accuracy of all statements made during the event. The views expressed do not necessarily reflect those of UNEP or AIIB.

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