Resilient Infrastructure and Financing

Curated and produced by Valdai Discussion Club

The outbreak of the viral COVID-19 pandemic has brutally exposed weaknesses in existing infrastructure systems: “grey infrastructure” expansion and the associated destruction of ecosystems facilitate the spread of zoonotic diseases, whilst excessive reliance on just-in-time transport infrastructure and value chains increases our vulnerability to global shocks. At the same time, sustainable infrastructure is part of any successful response to the crisis: Whilst in the short-term, investments in infrastructure are critical to economic recovery and job creation, the delivery of key public services from health infrastructure to water and sanitation facilities will increase resilience toward pandemics in the long-term. With 75% of all infrastructure predicted to exist by 2050 not yet built, governments must seize the opportunity of stimulus packages to set the world on a zero emissions path toward SDG delivery.

Urbanization and urban demographics are shaping a world both more complex and more unstable, spiraling up with digital transformations and un precedented levels of systemic risks -as illustrated by the covid19 pandemic. While the pivotal role of urbanization for social development and safeguarding the environment has been widely acknowledged since the 1992 Rio Earth Summit and the Habitat Summits of Istanbul (1996) and Quito (2016), we live with a paradigm of urban and infrastructure development focused on powering growth with new technologies, which falls short of realizing the full transformative potential of urban development. G20 Saudi Arabia offers an unprecedented series of opportunities to change course, initiating a process towards effective multilevel policy-making including cities and metropolises that makes urbanization a driving force for the achievement of the SDGs and inclusive growth. The legacy of the Germany, Argentina and Japan G20 presidencies provides a background of high-level principles on habitat and regional planning (2018), quality infrastructure (2019) and the crossing of the G20 and the Agenda 2030 priorities in an interconnected world (2017-2019). In 2020, as the covid19 pandemic highlights the deep interdependency of nations and cities to achieve prosperity, security and sustainability, the development of the G20 engagement group urbanization, the Urban 20 offers a unique opportunity to build a way forward for the G20 with cities. Ahead of the upcoming COP15 Biodiversity, the panel will connect U20, S20 and T20 agendas to discuss the role of cities & metros to shape a multilevel governance that supports growth and meets the planetary boundaries. Moving from principles to actionable agendas, the panel will explore how to realize the full potential of cities as both locations and agents of sustainable development.

Improving the wellbeing of billions of people globally depends on building more and better infrastructure, including for transportation, for access to energy and sanitation. This infrastructure build-up must be sustainable, as otherwise, it can have detrimental effects on people and the planet by destroying local livelihoods as much as the climate and ecosystems. Estimates are that additional investments of $15 trillion in infrastructure must be mobilized until 2040 to meet sustainable development goals; leaving critical funding gaps for infrastructure projects in the implementation of the Agenda 2030. The implementation of the G20 Quality Infrastructure agenda and the promotion of infrastructure as an asset class are meant to bridge global infrastructure funding gaps and attract private sector investments in support of sustainable infrastructure projects. As these approaches are vividly debated, latest research on managing the spillover effects of infrastructure projects, in particular in emerging economies, might pave the way for less doctrinal and more practical infrastructure policies, improving the connectivity between global and domestic finance, including private equity. The panel will raise and discuss proposals and solutions to promote a recoupling of private and public finance and accelerate the implementation of sustainable infrastructure, as a common issue for the G20 Sherpa Track and Development Working Group, the Finance Track and the Infrastructure Working Group, and relevant G20 Engagement Groups. It will also discuss how sustainable infrastructure investments can help build a way for the Agenda 2030, including in response to the covid19 and other such pandemic risks.