New Delhi: The need for sustainable finance for green growth as a critical focus area was stressed at the recently concluded World Sustainable Development Summit, held in New Delhi last week. Several leaders who spoke at the summit emphasized the need for sustainable finance and the absence of new instruments to facilitate long-term lending to fuel green growth, especially in the emerging economies and least-developed countries.
Dr Vibha Dhawan, Director General, The Energy and Resources Institute (TERI), said that though renewable energy has received a reasonable level of financing, areas such climate adaptation, sustainable consumption and production and biodiversity and ecosystem integrity and pollution abatement have not received the level financing required.
Manish Bapna, President Natural Resources Defense Council, India, pointed out that the current financial architecture is not geared up to handle the challenges posed by climate change.
“We know that finance is at the heart of tackling climate change. The fundamental question here is can we transform the global financial system to handle today’s challenges and to do so in ways that promote low carbon, resilient growth.”
Laszlo Broberly, state counsellor to the prime minster of Romania, added, “We need three things: a vision of what we want to do, an inter-institutional framework to do what we want to do and leadership.”
Dr Pradeep Tharakan, Regional Advisor – South Asia, Asian Development Bank (ADB), said that ADB is currently working on developing innovative financing models to enable the transition to clean energy through financing for retiring coal fired power plants and repurposing them to provide renewable energy and grid services as well as giving loans to countries for developing climate change policies.
Helen Clarkson, CEO, The Climate Group, identified finance as the key barrier faced by state and regional governments and said, “Facilitating climate finance and diversifying fiscal base for green growth should absolutely be a top priority. Capacity building should be top of the agenda to deliver the transformational change needed.” She added that both the national and sub-national finance ministries need to increase their capacity with instruments such as green budgeting, and carbon tax and pricing.
Drawing attention to the need for financial models to enable green transitions, Ms Kathleen McGinty, vice president and chief sustainability government and regulatory affairs officer, Johnson Control, said “We have never been better situated to figure out how we mobilise the financial resources but the question is what are the best models, what are the best ideas for this.”
Suggesting measures that could be part of the Green Development Pact, Jagjeet Singh Sareen, principal, Dalberg Advisors observed that the pact should bring G20 members together on a climate competitiveness framework or principles. “Our recommendations on climate finance would be to expand the scope of climate finance and make climate smart transition of the financial sector overall. Also, let’s build infrastructure which enhances our resilience rather than enhancing the resilience of the infrastructure we have already built,” said Sareen.