The COVID-19 crisis has presented a unique opportunity for governments to work together on sustainable development goals (SDGs) in order to level the playing field.
As the world recovers from the pandemic, a new report called Global Outlook on Financing for Sustainable Development 2021 from the OECD has called for all relevant organisations to be on board to securely place people and planet at the heart of the global financial system.
Even before the onset of the pandemic, progress to achieve the United Nations SDGs was starkly uneven across the targets and countries.
“The crisis has increased inequalities, and not all countries can raise the funds necessary on domestic or international markets to effectively respond and recover,” the report says.
The onset of the COVID-19 pandemic has further eroded progress and is driving up costs to achieve the universal goals by 2030.
The report predicts that the SDG financing gap could widen by 70% due to COVID-19, rising from $2.5tn (£1.9tn) to $4.2tn.
One hundred million people have been pushed into extreme poverty and job losses have occurred across all sectors.
Developing countries are still bracing for the worst, with growth prospects at their lowest level since World War II. While OECD countries are deploying trillions of dollars for recovery, fiscal space in developing countries is limited.
The next frontier to finance sustainable development means bringing all actors along the investment chain behind the SDGs to respond to the crisis in the short-term and rebuild over the long-term for a more resilient and sustainable future, the report says. Support for misalignment must be phased out.
In a call to arms, the report says: “The cost of inaction now exceeds the cost of action.”
“The global threat of climate-related disasters, future pandemics, and other shocks have brought the development finance world to a tipping point. However, the adjustment of markets, policies and behaviours will require pro-active interventions by all actors along the investment chain.”
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It goes on to note that already, in the period between the beginning of the pandemic in early 2020 and 15 July 2020, G20 countries committed at least $151bn to fossil fuels but only $89bn to clean energy in their stimulus and recovery packages.
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