The Sustainable Development Goals (SDGs) represent our most ambitious development agenda ever, setting the vision, framework and targets for the transition to a sustainable and resilient society. With just over a decade left to achieve the SDGs, a major push is needed to accelerate results. Closing the $2.5 trillion annual gap for SDG achievement is a top priority, particularly for climate change and other environmental pillars of the SDGs. While a major challenge, expansion of climate finance has also emerged as one of the greatest market opportunities on the road to 2030, as expressed in the recent UN Secretary General’s Strategy for Financing the 2030 Agenda.
To identify next generation solutions to close the finance gap, UNDP, the World Green Economy Organization and the University of Cambridge recently launched the first World Green Economy Report: Inspiring Innovations in Business, Finance and Policy, showcasing actions around the world to scale up climate finance and innovation. The expansion on SDG impact investing, climate bonds and climate insurance are examples where the finance sector is already aligning with the emerging market for green solutions. Meanwhile, climate champions are emerging in business, as companies expand solar solutions, waste to energy technology, climate resilient water management, and new low-carbon, climate resilient products and services. Governments and innovative public policy are also key in this regard to reduce investor risk, create financial incentives to transform production and consumption patterns, and generate an enabling environment for greater levels of ambition.
But as expressed in the new report, challenges remain to take these trends to scale. First, most of today’s green market expansion is concentrated in a small number of developed and emerging economies, with a major need to diversify the geography of green solutions, with least developed countries and countries in crisis particular priorities. Unless scaled up finance reaches the most vulnerable segments of society, development pathways will be derailed and hundreds of millions of people will be pushed into poverty and displacement. Second, as green markets expand we must ensure integrated solutions so that new climate investments under Nationally Determined Contributions (NDCs) under the Paris Agreement also result in tangible results for SDG priorities such as poverty eradication, women’s empowerment and peace.
Take the Middle East and North Africa region for example, already the planet’s most water insecure and food import dependent region, and with temperatures rising faster than the global average. Unless partnerships and finance are expanded in coming years, trends of poverty, displacement and fragility will continue to grow. As highlighted by a new UNDP regional report issued on the road to COP24, SDG Achievement in Crisis Contexts: Climate Change, Energy and Nature Based Solutions in the Arab Region, the region was the birthplace of agricultural civilization and has been able to cope with environmental change for thousands of years. But social and ecological systems are now being disrupted at a pace unlike anything before, stretching the ability of societies to cope.
To take action on these issues on the road to COP24, UNDP, UN Environment, UN Habitat, UNISDR and WFP are launching a new SDG Climate Facility regional initiative ($7 million; 2018-2021); a regional initiative with the League of Arab States, the Arab Water Council and a number of partner countries. Together, the UN and regional institutions will help countries generate local climate action and scale up finance in a way that brings co-benefits across the SDGs and for the region’s crisis prevention and recovery imperatives.
Through the SDG Climate Facility, the UN will help country partners map opportunities to mainstream green solutions into national financial structures, the rules and institutions governing the banking sector, capital markets, insurance, investment and other segments of national financial systems relevant to green market development, and produce a directional estimate of the investment gap on the road to 2030. Partnerships with banks, insurers and investors will see increased application of best-in-class methodologies to assess green risks and opportunities, strategic positioning of countries for emerging green markets under the SDGs, and expansion of impact-based financing. Expanded use of green finance such as climate insurance and loan guarantees for climate resilient infrastructure and ecosystem-based approaches to climate adaptation will be explored with country partners, as will approaches to risk pooling, sovereign risk solutions, risk reduction and transfer tools, and Fintech for green finance.
A priority will also be on innovation, to establish new green investment platforms among public and private partners so that scaled up climate finance can be applied in a way that benefits the poorest and most vulnerable in society, including communities affected by conflict. This will result in new policies to reduce investor risk into green investment for fragile and crisis contexts, solar solutions for communities displaced by conflict, innovative approaches to climate resilience for women’s empowerment, mainstreaming future climate risk into post-conflict reconstruction plans, and green solutions that advance the humanitarian-development nexus.
The SDGs and Paris Agreement are emerging as a catalyst for growth in the market for green solutions. As countries reposition themselves to engage this process, UNDP and our partners are helping to identify next generation solutions to close the finance gap and establish new integrated solutions to leverage climate action for poverty eradication and peace. Mobilizing green markets and supporting the acceleration of SDG results not only protects the planet, it builds resilience of countries, and empowers communities so no one is left behind on the road to 2030.
The period from now until 2020 is critical to the success of the Paris Agreement. For UNDP, UN partners and the wider international community, the mission is clear: to push for countries, communities and the private sector to scale up ambition. By 2020, we want to see accelerated action on the climate targets — the Nationally Determined Contributions (NDCs) — of the Paris Agreement. Read more on: Climate 2020 — All In