An ambitious global agenda on climate change and sustainable development has emerged from the landmark international agreements of 2015. Together, the UN 2030 Sustainable Development Goals (SDGs), the Paris Agreement and the Addis Ababa Action Agenda aim to deliver strong, sustainable, balanced and inclusive growth, reduce global poverty and secure a better and more sustainable future for people and the planet for decades to come.

Investments in quality and sustainable infrastructure will lay the foundation for improving growth trajectories and achieving ambitious development goals. Under the Japanese Group of 20 (G20) presidency, quality infrastructure has been set as a central plank of this year’s G20 working program and deliverables. While the focus on quality infrastructure is timely, there is a need for an integrated and ambitious agenda on quality infrastructure that can deliver on the SDGs and the goal of limiting global warming to 1.5°C.

In a new report, Amar Bhattacharya, Minji Jeong, Kevin P. Gallagher, Miquel Muñoz Cabré and Xinyue Ma review the G20’s agenda to accelerate the delivery of sustainable infrastructure to meet development and climate ambitions, the role and contributions of the G20 and how they can be enhanced and better aligned with climate goals and the 2030 agenda.

Key findings:

• Sustainable infrastructure investments are falling short of investment needs by $3.2 trillion per year. To achieve baseline SDGs and the Paris Agreement targets, the global community will need to invest upwards of 7.6 percent of GDP.
• Multilateral development banks (MDBs) are not mobilizing adequate levels of financing. Moreover, MDBs are not sufficiently crowding in private participation in infrastructure financing.
• National development banks and other development finance institutions play a larger role in sustainable infrastructure, but are dominated by major players in Brazil, China and Germany and only amount to 1.2 percent of the global need.
• Private capital flows from G20 countries into sustainable infrastructure are also very small, just 0.5 percent of the total global need.

Based on these findings, the authors make several policy recommendations for the G20. These include committing to align the infrastructure agenda with the 1.5°C target and the SDGs, unlocking investments at scale in sustainable infrastructure, eliminating fossil fuel subsidies and mainstream carbon pricing, phasing out coal and other fossil fuels, mobilizing finance at scale with a strong alignment to sustainability and establishing measurement and monitoring systems to track progress. The authors emphasize the scale and urgency of the challenge, noting that the decisions made in the next one to two years will shape the trajectory of investments and will determine the future of people and the planet.