1. Financing for Development Regional perspectives and the role of the
Dialogue with the Second Committee
23 OCTOBER I NEW YORK
Financing for Development
Regional perspectives
and the role of the
UN Regional Commissions
To implement the 2030 Sustainable Development Agenda, we will need significant resources. Mobilising these resources requires a combination of public and private efforts. The main focus of my presentation today will be how to engage the private sector to meet the financing for development needs .
I would like to start with a key message: If we want to reach out to the private sector, we should think – and present our thinking- not only in terms of needs but also of opportunities. The private sector is increasingly waking up to the need to make business sustainable. There is a growing understanding that sustainability can be good business.
UNECE is actively engaged in many areas that have been identified as major market opportunities by the Business and Sustainable Development Commission. To give but a few examples, let me mention affordable housing, increasing energy efficiency in buildings, sustainable mobility, water and sanitation infrastructure, expansion of renewables. The list is long…
The SDGs, in effect, provide guidance on future business opportunities, and identify areas where public resources are likely to flow and demand is likely to increase.
Ms. Olga Algayerova
Executive Secretary, UNECE

2. Global infrastructure needs are large Total, 2015-2030, $ trn
Source: The Global Commission on the Economy and Climate
45%
Needs are particularly large for infrastructure investment. Globally, recent estimates indicate that in the next 15 years approximately $89 trillion will be required in infrastructure investment across transport, energy and water systems in a “high carbon” scenario. Making this infrastructure green in a “low carbon” scenario would add an estimated 4.5% to the total spending, according to the Global Commission on the Economy and the Climate. And let me add another important message: green infrastructure involves slightly higher upfront investments than traditional infrastructure but brings additional benefits, including reduced operational costs due to higher efficiency.

3. Infrastructure needs to be improved
Source: Global Competitiveness Report, World Economic Forum
What is the situation in the UNECE region? It is quite diverse across countries, both regarding the quantity and the quality of infrastructure. Many infrastructure needs remain unaddressed. There are however, indications that the differences among countries have narrowed. In the EU, the new member States have been catching up with older members. In the UNECE region as a whole, progress in South Eastern Europe and the CIS is perceived to be more rapid than in other economies with a better starting position. By contrast, it is felt that in several advanced economies, the quality of infrastructure has deteriorated due to insufficient maintenance spending and the ageing of networks. These are the findings of the Global Competiveness Report by the World Economic Forum.

4. Increase efficiency and impact of public spending
Across the region significant infrastructure spending will be required, both public and private. In many countries, public spending will be limited by the negative impact of the global financial crisis on public debt, despite low financing costs. In others, low levels of savings also constrain investment.
Given these limitations, there is a need to increase the efficiency and impact of public spending. What matters is not only building new infrastructure but how it is used. And improved standards and regulations can help us reach higher levels of efficiency. To give but one example, UNECE works on regulations for Intelligent Transport Systems. They will reduce congestion and promote safer and cleaner transport, thereby allowing countries to maximise the impact of transport investments. Innovative approaches generate greater impact – we need more of them.

5. Public policies can shape the space for sustainable private investment
That said, public financing, even if it is efficient and has high impact, will not be sufficient to meet our financing needs. We must engage the private sector.
There are multiple ways –financial and otherwise- in which the public sector can contribute to channelling private resources towards the SDGs.
Public policies can shape the space for private investment, in particular through appropriate regulations. UNECE supports member States in developing such policies. For example, our work on air pollution (Air Convention) creates incentives to develop new solutions that address this significant problem in our region that has such dramatic health implications.
UNECE also provides direct recommendations in its Environmental Performance Reviews on how to improve environmental services, such as water supply and sanitation or waste disposal. The aim is to increase the amount of resources available for investment, including by creating better conditions for private sector participation. For example the Performance Reviews identify that excessively low pollution charges do not create incentives to introduce abatement technologies- Water-tariffs that are not cost-reflective do not encourage water saving. Appropriate pricing and tax changes are necessary first steps to attract the financing required to address these environmental problems.
Information is costly to acquire. Therefore, standardizing this information can facilitate investment. UNECE has developed a classification system for renewable energy resources based on the UN Framework Classification for Resources.

6. Large differences in renewables use Share of renewable energy in total primary energy consumption, 2014
Source: UNECE Renewable Energy Status Report
Iceland 89
Macedonia, FYR 11
Tajikistan 49
Bulgaria 10
Norway 46
Turkey
Latvia 37
Czech Republic 9
Sweden 36
France
Austria 33
Moldova
Montenegro
Poland
Finland 30
Slovak Republic
Kyrgyz Republic
Belgium 8
Denmark 27
Hungary
Georgia
Ireland
Bosnia and Herzegovina 26
Armenia 7
Portugal
United Kingdom
Croatia 25
United States
Switzerland 21
Belarus 5
Romania 19
Israel
Canada 18
Luxembourg
Italy
Netherlands
Lithuania
Russian Federation 3
Slovenia
Ukraine
Spain 16
Azerbaijan 2
Serbia 15
Malta
Estonia 14
Uzbekistan
Germany 12
Kazakhstan 1
Greece
Turkmenistan
Estimating and classifying renewable energy resources in a coherent and consistent manner brings clarity and facilitates much needed investments in this area, where further advances are still required, despite recent progress.

7. Public-private partnerships
Standards:
Facilitate transactions
Protect public interests
Promote sustainable developement
Public-private partnerships (PPP) can be used to attract private financing for infrastructure development and the provision of public services in a wide range of sectors relevant to sustainable development. It is however important to assess the impact of PPPs on the fiscal space and to ensure that PPP transactions protect public interests. UNECE, in collaboration of other members of the UN family, elaborates standards that aim to facilitate the involvement of the private sector, while also providing safeguards for the quality and continuous delivery of public goods and services.
People-first PPPs

8. Joining forces and pooling resources: The example of road safety
Source: Draft proposal for a United Nations Road Safety Fund
Worldwide road traffic deaths
Meeting the 3.6 SDG target to halve global deaths from road traffic accidents by 2030 requires resources from multiple stakeholders
More generally, public financing should be used as a catalyst to attract private resources, in order to get a multiplicative impact. Combining different sources of funding can generate momentum, as initial outlays pave the way for additional investments. I will give one example from the area of road safety. Last year, the Secretary-General tasked UNECE, in collaboration with relevant UN partners, to develop a proposal for establishing a road safety trust fund to support the implementation of the Global Plan for the Decade of Action for Road Safety and the related SDGs. The rationale of generating multistakeholder investment momentum from an initial (and likely public) outlay underpins the proposal we have coordinated. Road traffic injuries represent a major preventable cause of death. Currently, the number of cases is decreasing but investments will need to rise far above their current levels to meet SDG target 3.6. Therefore we need to engage all stakeholders, member States, the automotive industry, civil society and many more to raise and pool funding for concerted action and greater impact, in order to meet this target and other goals of the Decade of Action for Road Safety.

9. ODA is necessary to meet SDGs ODA as percentage of GNI, 2016
Source: OECD
Stressing the importance of private financing should not lead us to neglect the critical role that public funding and, for some countries, ODA, will continue to perform. Traditional public financing is required in some areas where the risk-return and time profiles of investment cannot become sufficiently attractive for the business sector. Well-designed policies will enhance the impact of ODA and its catalytic role in attracting more private financing – but increased ODA remains necessary.

10. Sustainable investment keeps growing
Source: Global Sustainable Investment Alliance
From , assets managed under sustainable, responsible and impact investment principles almost doubled to $ 23 trillion.
2012
2016
Total, $ trn
As % total assets
Europe
8.8
49.0
12.0
52.6
United States
3.7
11.2
8.9
21.6
Global
13.6
21.8
22.9
26.3
In order to achieve the SDGs, investment decisions must fully take into account the multiple dimensions of sustainable development: economic, social and environmental. And here there are clear signs of progress. Assets managed under sustainable, responsible and impact investment (SRI) principles almost doubled between 2012 and 2016 to reach $23 trillion. Impact investment, which has an explicit social or environmental purpose, has grown particularly fast, albeit from low levels.

11. Thank you! 23 OCTOBER 2017 I NEW YORK
And to conclude, a final reflection. The 2030 Agenda is a transformative blueprint and no real change can take place without a change in the allocation of resources. But the Agenda also offers a meeting point where multiple efforts can converge. This collaboration, based on a shared view of the future, will make the promises of the 2030 Agenda a reality.
Thank you!