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By Frank Rijsberman, Director-General, Global Green Growth Institute. This blog originally appeared online in The Huffington Post
At GGGI we believe that attracting increased investment to sustainable infrastructure is essential for green growth. It is a central discussion topic for both the Sustainable Development Goals (SDGs) and the Paris Agreement on Climate Change. The world needs to invest in resilient and sustainable infrastructure for a triple win: (1) boost growth, (2) create a more inclusive future and (3) tackle global warming. This is a key message of New Climate Economy’s 2016 report on ‘The Sustainable Infrastructure Imperative: Financing for Better Growth and Development’. GGGI is one of the partners supporting the New Climate Economy project.
Looking back, 2015 was a momentous year. The most notable milestones on the climate change and development front last year were the International Conference on Financing for Development in Addis Ababa; the Sustainable Development Summit in New York and the COP21 Climate Change Conference in Paris. The Paris summit was a political triumph in that it put the international climate process back on track. Last week’s Kigali Amendment to the Montreal Protocol that phases out HFCs is another significant climate mitigation step the world has taken to deliver on the Paris Agreement and the Sustainable Development Goals.
Moving forward, mobilizing investment for green growth, of which climate change is a cross cutting theme, is crucial but challenging to address. Although financial resources may be available, according to the New Climate Economy’s 2014 report, Better Growth, Better Climate; only 3% of the 60 trillion dollar investment made in 2013 by institutional investors was put into long-term investment in infrastructure. Profit considerations will remain the main driving force behind private investment. Investors need to be convinced about the bankability of projects in an increasingly volatile geo-political environment.
Effective regulatory policies and mechanisms need to be in place to help unlock and accelerate investment for climate-smart infrastructure projects. A top priority for GGGI is to assist countries to develop pipelines of projects that are investment-ready. GGGI is attempting to change the direction of investment more towards climate smart and green growth investments by building capacity of governments in designing bankable projects, initiating and pilot testing de-risking instruments and blended financing and helping governments to access international climate finance.
An action plan for financing sustainable infrastructure needs to be drawn up to address investment barriers. More money alone won’t do the job. NCE’s Sustainable Infrastructure Imperative Report notes there are four ways to build sustainable infrastructure and overcome obstacles. First, collective action must be taken to deal with fundamental price distortion to enhance incentives for investment and innovation. This unified effort will contribute significantly to reducing pollution and congestion and ultimately generate profit that can be redirected to help the poor. Second, strong policy frameworks and institutional capacities must be reinforced to generate enabling conditions for investment to build pipelines of sustainable projects. Third, the financial system must be transformed to deliver the scale and quality of investment needed in order to increase financing from all sources, including private investors. Last, mobilizing finance and scaling up investments in clean technology R&D and deployment are pivotal to reducing the costs and enhancing the accessibility of more sustainable technologies.
The report also states that the world is expected to invest US$90 trillion in infrastructure over the next 15 years to combat climate change and ensure that this money is spent on low-carbon, energy-efficient projects. The report adds that both developed and developing countries will face different infrastructure challenges in the 21st century. Developed countries will have to replace or repair aging infrastructure, while the majority of construction of new infrastructure will happen in low and middle income countries. There needs to be better deployment and mobilization of finance and investment from domestic and external sources, including national and local governments, multilateral and development banks, private companies and institutional investors.
To overcome the barriers, national action plans for financing sustainable infrastructure need to be put in place while investment priorities and the financial system should be reviewed by national and international actors. GGGI will work hard to support its member governments to green their investments to deliver inclusive, pro-poor green growth, as well as climate action.
On October 6, 2016, the New Climate Economy published it latest report, The Sustainable Infrastructure Imperative: Financing for Better Growth and Development. The report examines how 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.
Read the full report here.
Go to the official report website at http://newclimateeconomy.report/2016/
GGGI, in association with Center for Study of Science, Technology and Policy (CSTEP), produced a special report, ‘Electric Buses in India: Technology, Policy and Benefits’. The report is a reference document, which has the potential to catalyze deployment of electric vehicles in India, especially in light of several recent policy initiatives by Government of India (GoI). Key insights and findings from this special report would also be relevant for other countries, facing similar transportation challenges.
Within the context of increasing transportation demand and growing number of private vehicles, electric buses offer sustainable mobility solutions, since they significantly reduce GHG emissions, air and noise pollution, and dependence on fossil fuels.
The report assesses green growth benefits and global technology trends related to electric buses, and also summarizes the current policy landscape in India.
The report compliments sub-national Green Growth Strategies, prepared by GGGI, for Indian states of Karnataka and Himachal Pradesh (HP). GGGI-led analyses identified electric mobility in public transport as a high impact green growth opportunity. As a follow up, GGGI supported the State Government of Karnataka and HP with a pre-feasibility assessment of battery powered electric buses for public transport, also establishing a business case. The proposal, jointly developed by Government of HP and GGGI, became the first successful initiative by any state government in India to secure a national grant ($ 5.5 million USD), under the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles (FAME) scheme of Government of India.
Read the full report here.
SEOUL – October 14, 2016 – The President of the Republic of Costa Rica, Luis Guillermo Solís Rivera, met yesterday with Mahua Acharya, GGGI’s Assistant Director-General and Head of the Investment and Policy Solutions Division , during the President’s recent visit to Seoul, Republic of Korea.
As one of the founding members of the Global Green Growth Institute (GGGI), Costa Rica’s government is continuing its collaboration with the institute to develop finance mechanisms that promote sustainable practices in the land use and forestry sector in the country. The Ministry of Environment and Energy (MINAE), and Forestry Financing Fund (FONAFIFO), are working together with GGGI to develop national finance vehicles such as the the country’s recently established Environment Bank Foundation (FUNBAM).
In collaboration with FUNBAM, GGGI will work to identify innovative financing mechanisms and develop projects for their eventual financing, with plans for developing and implementing identified projects being discussed next year.
Benefitting from Costa Rica’s leadership position on ‘payment for ecosystem services’ (PES), GGGI has been working on a knowledge sharing program where other countries in the GGGI membership can benefit from their experiences. The success of Costa Rica’s payment for ecosystem services program was highlighted in a forthcoming GGGI policy analysis publication titled Bridging the Policy and Investment Gap for Payment for Ecosystem Services: Learning from Costa Rican Experience and Roads Ahead.
In the report, GGGI analyzes Costa Rica’s innovative PES scheme called “Pago por Servicios Ambientales”, which along with a Forestry Law, led to a dramatic increase in Costa Rica’s forest cover from less than 30% in the 1980s to 54% of its territory today.
Emphasizing the significance of their collaboration, Mahua Acharya said, “The PES program in the Republic of Costa Rica is a model for the world and shows the potential of green growth. In partnership with the Republic of Costa Rica, GGGI has the ability to share knowledge from the Costa Rican experience in sustainable land use management with our other member countries around the world.”
About the Global Green Growth Institute (GGGI)
Based in Seoul, GGGI is an intergovernmental organization founded to support and promote green growth. The organization partners with countries to help them build economies that grow strongly, are more efficient and sustainable in the use of natural resources, less carbon intensive, and more resilient to climate change. GGGI works with countries around the world, building their capacity and working collaboratively on green growth policies that can impact the lives of millions. To learn more about GGGI, see http://www.gggi.org and visit us on Facebook and Twitter.
Notes to the Editor:
NFVs represent a means to streamline finances, procedures, coordination, and costs through a single mechanism that increases access to international climate finance from a combination public, private, bilateral, and other sources of capital.
Mr. Darren Karjama
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