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Aligning financial flows with low-emission, resilient infrastructure has become an urgent need to attain climate objectives and avoid further emissions lock-in. But infrastructure has suffered from chronic under-investment for decades. This investment gap and the urgency of the climate challenge present a unique opportunity to enable sustainable growth and increase resilience worldwide. Mobilising private resources across the financial spectrum will be necessary for sustainable investment in infrastructure, from public finance institutions to banks, institutional investors, corporations and capital markets. This mobilisation away from emission intensive projects will require getting the basic investment and climate policies right, such as putting a price on carbon and reforming fossil fuel subsidies.
Incentives that encourage rapid and radical transformation are also needed to drive systemic change, overcome institutional inertia, and break away from the vested interests that are often barriers to low-emission, resilient development. Harnessing rapid socio-economic and technological developments, such as digitalisation, will help to open new pathways to low-emission, resilient futures. This means embracing systemic conceptual and behavioural changes in how we manage and govern our societies and economies.
The international community has increasingly recognised the need for such transformative action, not only through international agreements such as the Paris Agreement but also through forums such as the G7 and G20 (for example the G20 Hamburg Action Plan on Climate and Energy for Growth). But going beyond an incremental approach to climate policy development and thinking “outside the climate box” remains a challenge.
This report lays out the agenda for a low-emission, resilient transformation that requires action across six key transformative areas, which should be articulated with respect to country contexts, and resource endowments and capacities: planning, budgeting, innovation, finance, development and cities.