1) Boosting economic growth does not require locking the world into a high-emissions future if pro-growth reforms are combined with coherent climate policy and alignment across the economy. 2) More ambitious climate policies will not harm growth and the combined actions of climate policies and economic reform still deliver net GDP increase in the long run. 3) Getting investment flowing into climate solutions requires a 10% increase in infrastructure spending, offset by $1.6 trillion in annual fossil fuel savings, to achieve a well-below 2 degree scenario.

1. Anthony Cox
Environment Directorate
Climate Change Expert Group Meeting
Paris, 7 March 2018
Climate, Growth and Infrastructure:
Where to from here?

2. Boosting economic growth does not mean locking the world
into a high-emissions future,
provided pro-growth reforms are combined with coherent
climate policy and alignment of policies across the economy.

3. More ambitious climate policies will not harm growth
The combined actions of more ambitious climate policies and economic reform
still deliver a net GDP increase in the long run.

4. Getting investment flowing: three components of a well-
aligned policy framework for climate and growth

5. An ambitious 2°C scenario requires only a 10% increase
in infrastructure investment …
Increased expenditures are needed
in energy demand and electricity
USD 3.4 -4.4
trillion:
Current total
infrastructure
spending

6. ... This is more than offset by USD 1.6 trillion savings in
fossil fuel expenditures per year

8. By 2021, only 1/3 of the renewable GWs required by 2025 in a well
below 2°C scenario may have been built.
0
500
1000
1500
2000
2500
3000
3500
4000
Additional capacities under construction
WB2DS capacity additions (2016-25)
GW
Planned capacity additions to 2021 verses an estimate of
needed additions in WEO well below 2° scenario

9. Acceleration of the green bond market
 Diversification of
players and countries
 Proliferation of
standards and
guidelines
 Emergence of
“sovereign” green
bonds
Source: SEB analysis provided to OECD, based on Bloomberg data
Annual issuance of green bonds (USD billion)

10. Taking steps towards a financial system that fully accounts for
climate factors
Source: Recommendations of the Task Force on Climate-Related
Financial Disclosures – Final Report (2017), https://www.fsb-
tcfd.org

11. Paris Collaborative on Green Budgeting
1. Elaborate on green budgeting definition
2. Scope potential green budgeting tools
3. Engage working groups for further scoping
4. 4.Develop new methodological approaches
5. Pilot and refine new green budgeting tools

12. Multilateral Development Banks are key
But only about 1/3 of commitments by MDBs are to infrastructure sectors that
will contribute to climate mitigation and adaptation

13. Making the transition progressive, inclusive and good for
business
 Avoiding stranded
assets
 Dealing with heavy
industry
 Ensuring a just
transition

14. Carbon entanglement: G20 governments’ dependency on
fossil fuel rents is a challenge for climate policy

15. Next steps – Making financial flows consistent with the goals of
the Paris Agreement
“We invite the OECD, UNEP and the World Bank to compile
ongoing public and private activities within the G20 for making
financial flows consistent with the Paris goals and, building on
this, to analyse potential opportunities for strengthening these
efforts and present this analysis in 2018.”

16. Infrastructure and financing for climate futures
• Taking a systems approach to examine a range of possible
futures in 2050
• The shift in infrastructure systems and technologies that will be
necessary to achieve Paris goals under this range of possible
futures
• The implications on business models and financing for achieving
these objectives
• The present implications of those scenarios, and the range of
policy options and innovative practices that G20 countries should
scale-up
Are our systems “fit for purpose”?

17. The full report and further information on
Investing in Climate, Investing in Growth
can be found at
http://oe.cd/G20climate