Amitabh Kant: Global SDGs and energy transition require USD 5 trillion in funding every year
To achieve sustainable development (SDG) and energy transition goals, the emerging and developed market India needs $5–6 trillion annually, which may generate $90 trillion in commercial potential, according to India’s G20 Sherpa Amitabh Kant.
However, he said that developing market economies need to improve their project preparation to tap into the huge financial opportunities that will emerge in the coming years.
“If emerging markets have to provide most of the growth, the global financial architecture and the flow of resources have to be altered to suit this to provide greater impetus to this group,” Kant said after a G20 meeting of 40 leading global thinkers organized by Niti Aayog here.
According to the International Monetary Fund, 80% of global growth is going to come from emerging markets.
Kant said that the global financial architecture needs to support the post-Covid era’s impacts, the cost of living crises, the SDG goals, and other challenges.
To ensure that resources flow from the developed world to the emerging economies and not the other way around as it is at the moment, the international financial architecture would need to be properly adjusted, he said.
The International Energy Agency estimates that the energy transition will require $4.5 trillion per year by 2030. The G20 Independent Expert Group on MDB (multilateral development banks) reforms said that an extra spending demand of $3 trillion per year by 2030, of which a small fraction flows through MDBs and the rest from private sources, is needed to address urgent global issues and SDGs
“It’s important to understand that if the world is transitioning to a clean economy (via an annual investment of $5-6 trillion), that will be providing business opportunities of almost $90 trillion,” Kant said.
According to him, the globe does not lack resources because there is currently close to $350 trillion accessible for investment. According to him, institutional investors and pension funds have access to $150 trillion.
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Content Credit: Financial Express