Closing the Green Finance Gap
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. Closing the US$2.5 trillion annual gap for achieving the SDGs is a top priority, particularly for climate change and the other environmental pillars. Climate finance has also emerged as one of the greatest opportunities on the road to 2030, as expressed in the recent UN Secretary General’s Strategy for Financing the 2030 Agenda. A key focus is on putting in place new mechanisms at global, regional and country levels to increase innovative finance.
The 2030 Agenda calls for transformational change and new approaches. The United Nations Development Programme (UNDP) plays a key role, supporting platforms for solutions to complex problems such as climate change, and using networks to connect a new generation of partners beyond the traditional development community. This aims to shift from closed to open source and help countries mobilize new forms of capital and innovation that have remained largely untapped.
To help close the green finance gap leading up to the Secretary General’s Climate Summit in September 2019, UNDP has spearheaded the launch of a new US$7 million SDG Climate Facility initiative in the Arab region. A partnership between the League of Arab States, Arab Water Council, FAO, UNDP, UN Environment, UN Habitat, UNISDR and WFP, the SDG Climate Facility has emerged as a UN platform to accelerate climate finance in a way that combats climate change while creating benefits across the SDGs on poverty, gender and peace. The Middle East and North Africa is already the most water insecure region and the most dependent on food imports, and temperatures are rising faster than the global average. Unless green finance reaches the most vulnerable, the SDGs will be derailed and hundreds of millions of people will be left behind.
Through the lead role of UNDP and UN Environment, and building on the Inquiry into the Design of a Sustainable Financial System, it will help countries incorporate green solutions into national financial structures, such as the rules and institutions governing the banking sector, capital markets, insurance, and investment. Partnerships with banks, insurers and investors will see increased application of methodologies to assess opportunities, innovative techniques such as futures thinking and scenario-based planning to test new solutions, and strategic positioning for emerging investment opportunities such as impact-based finance for action on climate change and the SDGs.
Second, and through catalytic funding by UNDPs Innovation Facility, UNDP and the International Renewable Energy Agency (IRENA) will help make renewable energy less risky. This includes support for new policies, regulations and fiscal instruments that can help overcome the market barriers often faced by investors, and encourage private sector and institutional investments. With the region holding the world’s highest levels of solar radiation, an acceleration of green investments for solar expansion can lead to transformation change and a more resilient development model beyond oil.
Through this innovative partnership, the UN Development System is addressing multidimensional and complex risks posed by climate change for SDG achievement, to help overcome market barriers holding back large scale investments to achieve the 2030 vision, to promote a network approach mobilizing the full range of knowledge and expertise from across the UN system, and to expand the scale of financial and technical resources from the private sector to accelerate action on the road to 2030.
As the UN repositions itself to help countries achieve the SDGs, UNDP and our partners are helping to identify next generation solutions to close the finance gap and establish new integrated solutions for sustainable development. 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 opinions expressed herein are solely those of the authors and do not necessarily reflect the official views of the GGKP or its Partners.