The green transformation is under way

At the Annual Meeting 2013 in Davos-Klosters, we heard a troubling message from three leading economic voices – the heads of the International Monetary Fund, World Bank and the Organisation for Economic Cooperation and Development – that we will not emerge from the current global economic crisis without addressing resource scarcity and climate change. The Forum’s Global Risks 2013 report echoed these views, with climate change emerging as one of the top global risks.

Mobilizing the required scale of green investment lies at the core of the combined global economic and climate challenge and demands new approaches to trigger action. The past several months of extreme weather occurrences with hefty price tags show that we cannot return to sustainable economic growth without addressing the climate challenge. This is therefore a pertinent agenda for the World Economic Forum. The Forum was pleased to help launch the Green Growth Action Alliance at the Mexican G20 in 2012. A coalition of actors focused on delivering results.

In 2012-2013, we have been privileged to witness true leadership as Alliance members and the Forum’s partner governments have committed to rolling up their sleeves and tackling a series of difficult financing and policy challenges. The results speak for themselves. The Alliance has clearly demonstrated that – with some support and resource – diverse groups can and will work together to achieve a shared outcome, in a time-bound manner.

One Forum member said that we were creating a series of “sandboxes” in specific country and market settings where solutions can be developed, tested and launched with the support of the local government. These include a facility supported by the UK government to guarantee the price of Renewable Energy Certificates in India, which has helped increase lender confidence in projects based on revenues derived from this mechanism; an insurance for geothermal well output in Kenya that would allow the Kenyan government to recycle capital earlier and thus invite IPPs earlier in the exploration process; a groundbreaking agro-forestry fund for climate-smart agriculture in Vietnam whereby excess returns from commercial sustainable projects can be used to fund the projects that for the moment only achieve the environmental bottom-line. Other mechanisms are still in development and the groups are working to turn ideas into practice.

The Forum is proud to have helped create a new model that is generating solutions for the global commons, and is eager to work with partners and other stakeholders to ensure that this approach is permanently embedded into public finance agencies, national planning departments and businesses going forward.

This week the Forum released the Alliance’s first Progress Report, designed as a blueprint for action that government, business and civil society leaders can use to direct the global economy to an economically and environmentally sustainable pathway. It is encouraging that a number of actors are already picking up and advancing the ideas and the processes developed in the course of the Alliance’s first year. Clearly the time is ripe for this sort of action-oriented initiative. We thank all of the Forum’s members, the Forum’s Executive Board, and our Chair for their dedication and leadership, and look forward to celebrating the next round of accomplishments in 2014.

This is just the beginning.  We look forward to welcoming pension funds, investors, governments and additional businesses as partners as we transform the global economy from a resource-deficient, climate-risky one to a sustainable, green growth model for generations to come.

Authors: Thomas Kerr, Principal Climate Policy Officer, International Finance Corporation and Chair, Steering Board, Green Growth Action Alliance and Brindusa Fidanza, Associate Director, Environmental Initiatives, World Economic Forum, Country Lead Coordinator, Green Growth Action Alliance

Image: Technicians are seen working on solar panels REUTERS/China Daily