Skip to content
Log in
Report

Unlocking the inclusive growth story of the 21st century: accelerating climate action in urgent times

The 2018 Global Commission on the Economy and Climate report highlights that “the next 10-15 years are a unique ‘use it or lose it’ moment in economic history” and calls on governments, business, and finance leaders to urgently prioritise actions on four fronts over the next 2-3 years:

  • Ramp up efforts on carbon pricing and move to mandatory disclosure of climate-related financial risks;
  • Accelerate investment in sustainable infrastructure;
  • Harness the power of the private sector and unleash innovation; and
  • Build a people-centered approach that shares the gains equitably and ensures that the transition is just.
Key points

The report provides recommendations and highlights the role of both public and private financial institutions to implement the above-mentioned actions 2 and 3:

2. All economies should place much greater emphasis on investing in sustainable infrastructure as a central driver of the new growth approach.

  • “The first step is not about the money. Rather, it is to build stronger leadership and technical capacity to shape robust growth strategies, investment plans, and institutional structures that can align with sectoral policies and facilitate the flow of private investment to sustainable infrastructure. This includes better designed buildings, transport, energy and water systems, and cities but also investments in the natural infrastructure that underpins our economy, such as the forests and wetlands that purify water and provide valuable flood control.
  • MDBs and other DFIs need to double their collective investment in infrastructure and make sure it is sustainable, aiming to invest at least US$100 billion per year by 2020. DFIs should also aim to more than double their mobilisation of private sector investment, including from institutional investors. This will entail working closely with governments and private investors to unlock investment and scale up blended finance, as well as ensure a continued strong capital basis for the MDBs. This would include greater use of risk mitigation instruments and structures and country-led sector infrastructure plans and investment platforms. More broadly, the DFIs can play a critical role in accelerating this new growth approach, but their portfoliowide activities will need to be aligned to support the sustainability transition.
  • Together with major private financial institutions, the G20 should continue its work on infrastructure as an asset class, on incorporating sustainability criteria into its core definitions, and on developing the tools needed to both support implementation and deepen the pools of green finance. A deeper recognition of the value of natural infrastructure, and effort to attract the finance to maintain and restore it, is needed.
  • Global and national-level platforms that pool expertise in project preparation for sustainable infrastructure investment should be scaled-up and replicated.
  • Developed countries should fulfil their commitment to mobilise US$100 billion per year in climate finance from public and private sources for developing countries by 2020, and the climate finance architecture must be strengthened to utilise these resources for maximum impact and leverage.”

3. The full power of the private sector and innovation needs to be harnessed. Many companies and investors are already demonstrating leadership, and others are ready to align around this agenda with the right policy signals.

  • “By 2020, all Fortune 500 companies should have science-based targets that align with the Paris Agreement. Shifting their brand and marketing to products that are climate positive will engage consumers as active agents of the solution. For only the top ten global retail companies, this could translate into almost US$4 billion each day of purchasing power moving toward the low-carbon economy.
  • Companies and investors are ready to advance on this agenda, but they cannot get there on their own. Current regulations, incentives and tax mechanisms are a major barrier to implementing a low-carbon and more circular economy. For example, they slow-down the penetration of new building materials in construction activity. In agriculture, they subsidise the application of too much mineral fertiliser, diverting innovation activity away from more sustainable forms of farming. They make it cost-competitive to deploy single-use forms of plastic packaging, contributing to the plastics crisis we are now seeing in the oceans. They make it hard to design products in a way that maximises component reuse. Along with getting carbon pricing right, we also need to tackle a host of other policies which are protecting the old inefficient, polluting economy.
  • A big push on innovation is needed, with at least US$50 billion of new capital by 2020 committed to breakthrough climate challenges beyond the energy sector. Today’s progress on renewable energy, energy storage and low-carbon mobility is not an accident. It is at least in part the outcome of decades of investment by governments, universities, foundations and the private sector in mission-driven innovation. Recent technological developments (and new partnerships) have, for example, helped to advance the radical transparency and accountability necessary to achieve deforestation-free supply chains, although there is more to be done to achieve these in practice.
  • We need to put in place and capitalise private-public partnerships in each major sector to pilot, scale and share learning around the deployment of new low-carbon and climate-resilient technologies. We have plenty of examples about how to do this well (and badly). What is currently lacking is sufficient political and business leadership.”