To bolster economic recovery from the COVID-19 pandemic and halve global emissions by 2030, the developing world will require record amounts of finance to build clean infrastructure this decade – over a trillion dollars annually. The G7 introduced the Build Back Better World (B3W) initiative last year to directly address this massive funding gap. Meanwhile, individual G7 members have since launched similar initiatives of their own, which risk duplicating efforts and can create coordination challenges.
The implementation of this global infrastructure finance vision, however, hinges on all of these programs addressing the same key questions – on the supply of finance, project pipeline planning, coordinating mechanisms, and a supportive diplomatic framework – in order to be successful.
The few public announcements made so far concerning B3W, CGI, and the Global Gateway have largely failed to address:
- Money. Where will it come from and how much? Are these new commitments?
- Modalities. How will these initiatives work together? Where are they housed?
- Pipeline. How will funding be connected to projects? Country platforms? Packages?
To halve global emissions by 2030 and stabilize the climate, time is of the essence. This year, the G7 must address these questions and move expeditiously to shift trillions of dollars in public and private investment toward clean energy infrastructure in lower- and middle-income countries that will lower emissions trajectories. To kickstart the structuring process and move beyond the project-by-project approach, G7 countries need to collectively coordinate their plans.
With climate change accelerating and the pandemic still raging, 2022 must be a decisive year for progress. This policy paper is the first in a series to focus government and multilateral entities on animating Build Back Better World and the other G7 infrastructure initiatives to deliver transformational finance this decade.
The purpose of this briefing is to provide a snapshot of announcements and developments to date and plot a forward path so these initiatives deliver on their promise, geopolitically and ecologically.