The Paris Climate Agreement and the Agenda 2030 represent an unprecedented consensus across the world’s governments, to align our efforts on a comprehensive and ambitious development agenda. This level of ambition now needs to be matched with resources, partnerships and innovation.
To deliver these climate pledges as well as the Sustainable Development Goals (SDGs), developing countries need around US$4 trillion a year, so the private sector is critical. Around US$2 trillion are needed for climate-related sectors alone. However, it is acknowledged that investments are not happening at the pace nor at the geographical scale we need. Most private sector investments are in developed countries and not in developing countries, where most of the earth’s population live.
National climate plans represent at least a US$13.5 trillion market for the energy sector alone and specifically energy efficiency and low carbon technologies. The low carbon technology market is growing significantly and the cost of renewable energy is going down. This means the national climate plans of developing countries can open new market opportunities. However, the transparent aspect enabling regulatory environment with laws and policy incentives is needed as a precondition to unlock the finances.
UNDP recently conducted a survey in Uganda that showed a significant number of enterprises are already interested in contributing to the climate goals and SDGs. These companies work on solar energy and clean cookstoves, in banking, steel manufacturing, water and sewerage, engineering and construction and many other areas.
The primary motivations for the private sector to integrate climate and SDG action into their businesses were to save costs and make their operations more efficient, underlining the business case for climate action.
We cannot tackle climate change without a thriving private sector. Countries have the responsibility to create a climate-friendly business environment for all enterprises. The good news is any country can do this, regardless of its development status.
The blog was originally authored by Alexandra Soezer, Climate Change Technical Advisor in the NDC Support Programme, UNDP and posted on the website.
Photo credit: UNDP Lebanon
The views expressed in the blog and report are the author's own and do not necessarily reflect those of the SDG Philanthropy Platform. The SDG Philanthropy Platform is a global initiative that connects philanthropy with knowledge and networks that can deepen collaboration, leverage resources and sustain impact, driving SDG delivery within national development planning. It is led by the United Nations Development Programme (UNDP) and Rockefeller Philanthropy Advisors (RPA), and supported by the Conrad N. Hilton Foundation, Ford Foundation, Oak Foundation, Brach Family Charitable Foundation, and many others.