Innovation is a fundamental engine of long-term economic growth, and a critical driver for reducing emissions and tackling climate risk. There is a need to scale up innovation efforts to reduce emissions cost-effectively beyond 2030 consistent with limiting dangerous climate change, in particular through supporting research, development and demonstration (RD&D) for technologies which have not yet been deployed at scale and are unlikely to without strong government support. 

Energy demand is projected to grow by a third in the next 15 years. A rapid scale-up of low-carbon energy sources and energy efficiency is essential to drive global growth, reduce the air pollution and greenhouse gas emissions (GHGs) associated with fossil fuel use and help provide reliable access to modern energy for those who lack it. This need has become more urgent following the global commitment made in the UN Paris Agreement in December 2015 to reducing net GHG emissions to zero in the second half of the century. 

Investing in sustainable infrastructure is key to tackling the three central challenges facing the global community: reigniting growth, delivering on the Sustainable Development Goals, and reducing climate risk in line with the Paris Agreement. Transformative change is needed now in how we build our cities, produce and use energy, transport people and goods, and manage our landscapes. And the challenge is urgent. 

In urban infrastructure the investment decisions taken today will shape tomorrow. Despite the critical importance of infrastructure for urban development, financing to scale up smarter, more sustainable urban infrastructure remains an immense challenge, particularly in emerging and developing economies. 

After the Paris agreement, many countries are looking to scale their investment in infrastructure that is socially inclusive, low carbon, and climate resilient. The huge quantity of investment required means that establishing the right conditions to attract private-sector investment is critical. In this paper by the McKinsey Center for Business and Environment, the authors highlight the major barriers that must be overcome and the ways to encourage more capital investment in sustainable infrastructure. The paper determines that a “muscular set of nudges and risk-sharing instruments are required”. 

Strong, predictable and rising carbon prices send an important signal to markets and can reduce greenhouse gas emissions without harming the economy. Around 40 national jurisdictions and over 20 cities, states and regions, have adopted or are planning explicit carbon prices, covering about 12% of global GHG emissions.

This report finds that growth strategies which fail to tackle poverty or climate change will prove to be unsustainable, and vice versa. A common denominator to the success of both agendas is infrastructure development. 

About US$90 trillion in infrastructure investment is needed globally by 2030 to achieve global growth expectations, particularly in developing countries. To achieve this, infrastructure investment needs to be both scaled up and climate objectives need to be integrated due to climate risks. The Global Commission on the Economy and Climate recommends that G20 and other countries adopt key principles ensuring the integration of climate risk and climate objectives in national infrastructure policies and plans. 

The Global Commission on the Economy and Climate recommends that cities commit to developing and implementing low-carbon urban development strategies by 2020, using where possible the framework of the Compact of Mayors, prioritising policies and investments in public, non-motorised and low-emission transport, building efficiency, renewable energy and efficient waste management. The actions suggested could reduce annual greenhouse gas (GHG) emissions by 3.7 Gt CO2e by 2030. 

This report documents a wide range of projects, programmes and plans currently being pursued by African cities as part of a new mode of low-carbon urbanism that is simultaneously helping to realise virtuous cycles of local economic development and social inclusion, as well as climate risk reduction.