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Environment

G7 Finance Ministers and Central Bank Governors Meeting: Working Breakfast: Climate and Green Finance

 

Remarks by Angel Gurría

OECD Secretary-General

18 July 2019 - Chantilly, France

(As prepared for delivery)

 



Dear Ministers and Governors,


Globally, we have a 3 trillion dollar annual investment gap in climate-friendly and climate-resilient infrastructure for energy storage, transport, and buildings. There is no shortage of resources. Yet, to shift trillions to climate and green infrastructure, we need a pipeline of “bankable”, sustainable infrastructure projects as well as innovative financing instruments and investment vehicles.


Let me share with you some of OECD’s climate and green finance initiatives that can help fill the investment gap.


First, the Vision for an Environmentally Responsible Transition – Infrastructure – the VERT-Infra - an initiative we developed for the One Planet Lab with the IFC, the Climate Policy Initiative, HSBC, the Institute for Climate Economics, the Green Climate Fund and the French government.


It aims at systemically scaling up global climate finance, with a focus on three key but under-developed sustainable infrastructure sectors: energy storage, transport and buildings. By ensuring a supply of viable sustainable projects, establishing financing vehicles and setting up a Policy and Planning Capacity Initiative (PPCI) Fund, Vert-Infra addresses financing and capacity needs for the entire infrastructure project cycle, providing a holistic framework to mobilise financial institutions.


Second, our effort to keep mobilising public funds and unlock private investment. The joint MDB report for climate finance in 2018 shows a sharp 22% year-on-year increase. This is good news, but precisely how it impacts the trajectory towards our USD 100 billion goal will not be clear until we have latest data to analyse, which we will publish ahead of the UN SG’s Climate Action Summit in September.


Third, our work on the alignment of development co-operation finance with climate objectives. In doing so, we look not just at direct finance for projects, but also at development co-operation as a key tool for providing developing countries with the required capacity and technologies to adapt to and mitigate climate change.


Fourth, the OECD Paris Collaborative on Green Budgeting , which brings together Ministries of Finance with environmental and climate experts to ensure that governments’ central policy tool – the national budget – helps to prioritise and achieve our climate and environmental goals.


Finally, it’s not just climate where we can wield the power of finance and investment. Greener economies also means investing in life-supporting – and economically invaluable – ecosystem services. I am delighted that the French Presidency of the G7 has made biodiversity a priority this year, and invited the OECD to contribute a report to build the case for scaling up, aligning and better tracking finance for biodiversity. The needs are great: as our preliminary estimates suggest that finance flows for biodiversity are in the range of 50 to 80 billion USD a year – not much, compared to the 500 billion USD a year going to subsidies that are harmful to biodiversity!


Ultimately, it is up to you – Ministers– to allocate these resources to fight climate change and support biodiversity. The OECD stands ready to support you.

 

 

 

See also:

OECD Centre on Green Finance and Investment 

 

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