Investing in sustainable infrastructure is key to tackling three simultaneous challenges: reigniting global growth, delivering on the Sustainable Development Goals (SDGs), and reducing climate risk. Following the milestone achievements of 2015 – including the ambitious global goals set for sustainable development and
its financing in Addis Ababa and New York, and through a landmark international agreement on climate action in Paris – the challenge is to now to shift urgently from rhetoric into action.
A comprehensive definition of infrastructure includes both traditional types of infrastructure (everything from energy to public transport, buildings, water supply and sanitation) and, critically, also natural infrastructure (such as forest landscapes, wetlands and watershed protection).
More money alone won’t do the job. A range of barriers must be tackled to raise the quantity and the quality of infrastructure investment. Concerted action in four, inter-linked areas can together help
us overcome these barriers and build the sustainable infrastructure of the 21st century:
- we must collectively tackle fundamental price distortions – including subsidies and lack of appropriate pricing especially for fossil fuels and carbon – to improve incentives for investment and innovation, to drastically reduce pollution and congestion, and to generate revenue that can be redirected, for instance, to support poor people
- we must strengthen policy frameworks and institutional capacities to deliver the right policies and enabling conditions for investment, to build pipelines of viable and sustainable projects, to reduce high development and transaction costs, and to attract private investment
- we must transform the financial system to deliver the scale and quality of investment needed in order to augment financing from all sources (especially private sources such as long-term debt finance and the large pools of institutional investor capital), reduce the cost of capital, enable catalytic finance from developmentfinance institutions (DFIs), and accelerate the greening of the financial system
- we must ramp up investments in clean technology R&D and deployment to reduce the costs and enhance the accessibility of more sustainable technologies