Fri, Apr 9, 2021
In the final session of this year’s Annual Meeting, Afsaneh Beschloss, Thierry Déau, and Jérôme Haegeli joined Aniket Shah to discuss how countries can accelerate their transitions to a green economy. According to Shah, despite significant efforts from the private and public sectors, the global economy was largely off course from achieving the Sustainable Development Goals and Paris Climate Accord before the pandemic. Covid-19 has kick-started a significant public investment program that has the potential to reorient progress on climate change.
Green Infrastructure Investments: The Covid-19 pandemic has led to a significant acceleration in private and public sector interest in green infrastructure investments. However, despite an abundance of infrastructure project funding, supply of these projects generally falls short of demand. According to Déau and Beschloss, improving public procurement in infrastructure and accelerating careers in project development could help boost absorptive capacity and correct this mismatch. Further, Haegeli emphasized the need to improve the tradability of infrastructure by achieving standardization of the asset class.
Sovereign Debt: Beschloss advocated for the development and use of innovative financial instruments, such as debt-for-climate swaps, that would allow lower-income countries to reduce their debt burden and utilize the freed funds to invest in green projects. Haegeli agreed, describing the DSSI as a “missed opportunity” to link debt with sustainability outcomes and, more narrowly, to Article 9 of the Paris Agreement.
LICs, MICs, and the Push Toward Net-Zero Emissions: The speakers emphasized that it is imperative that policies are tailored so that low- and middle-income countries, who are generally less responsible for climate change, are not disadvantaged in the push toward net-zero emissions. In particular, Beschloss advocated for moving towards zero-emissions on a “relative basis” rather than taking a standardized approach while Déau stressed the importance of a just transition that allows countries to industrialize and grow.
International Financial Institutions: According to the panel, in order to support green investment globally, the IFIs must encourage debt transparency, work more effectively with the private sector, coordinate more closely with each other, and leverage their balance sheets to lend more to countries in need.