Preliminary findings and proposals by Task Force 7 on Infrastructure Investment and Financing
Data and Infrastructure
Limited availability and poor standardization of data and information is a key barrier to both private investments and the life-cycle efficiency of infrastructure projects. More precise and standardized data would help capital-planning decisions based on the expected performance of infrastructures in the different phases of a project – design, construction, operations, and maintenance of infrastructure assets. The G20 should therefore undertake initiatives aimed at:
- Promoting the sharing and reusing of data and pioneering technologies – such as cloud/edge computing, artificial intelligence, digital twins, IoT/smart sensors, 5/5.5G, and distributed ledgers – to help to integrate value chains with the goal of enhancing infrastructure productivity, efficiency, and affordability. Such platform-driven integration would also spur innovation through ecosystem participation and accelerate the achievement of the broader objectives of decarbonization, resilience, and human-centered infrastructure;
- Fostering the application of new technologies to existing infrastructures to improve the services they provide and enhancing their linkages between the various infrastructure systems in dense and smart networks;
- Promoting value chain integration through federated digital platforms or “infrastructure 4.0”;
- Sharing good practices to address the issues associated with governance, design, protocols and implementation of digital platforms;
- Promoting standardization of data to better pool and compare infrastructure projects.
Urbanization, Social Infrastructure and Smart Cities
Cities harbour over 50% of the global population and occupy only 3% of land surface, but they account for 60-80% of global GHG emissions and consume 75% of the planet’s natural resources. Emissions from building and infrastructure construction are the single largest category of consumption-based emissions. Transforming urban infrastructure design is critical to promote resource efficiency and ensure climate change mitigation and adaptation. G20’s priorities in addressing these issues should include:
- Addressing the unequal availability of infrastructure and related services in urban environments to allow all citizens to attain their economic and social potential and reduce the exposure of the most vulnerable population groups to critical risks;
- Promoting a more systemic convergence between social and economic infrastructure investments as well as social innovation;
- Promoting the long-term sustainability of urbanization and in view of the implementation of the 2030 Agenda;
- Supporting programmes for infrastructure investments with not only economic, but also environmental and social objectives as a way of promoting a recovery “from the bottom-up” which does not leave anyone behind;
- Fostering policy actions to mitigate the gap between urban and rural areas;
- Balancing and re-orienting social infrastructure needs.
Mobilizing Capital and Markets for Sustainable Infrastructure
The G20 countries produce around 79% of global CO2 emissions, of which 70% comes from the energy, buildings and transport sectors. Thus, the G20 forum has a key role in accelerating a shift from primary energy sources to low-carbon and energy efficiency infrastructure. Even before the pandemic, there existed a large gap in sustainable infrastructures. Such gap is incompatible with the sustainability goals. There is the need to incorporate new green technologies in both existing and new infrastructures. The gap of sustainable infrastructure investments is estimated to be around $3.2 trillion per year – 2.1% of global GDP. The World Bank estimates that in emerging economies the annual investment gap to achieve SDGs goals is between $1.5 and $2.7 trillions. In light of that, the G20 should work towards:
- Supporting programmes aimed at helping sub-national entities and cities to mobilize private investments to achieve low-carbon and climate-resilient infrastructure;
- Fostering new and innovative financing avenues such as green bonds or new generation of PPPs to attract private investments;
- Promoting data and disclosure standardization linked to the Sustainable Reporting Environmental, Social, and Corporate Governance (ESG) indicators to further mobilize institutional investors;
- Enhancing governance in infrastructure development by improving transparency and strengthening the monitoring process needed to ensure accountability;
- Supporting policies ensuring governments’ long-term commitments to promote private investments in sustainable infrastructure.
The rising risks of disasters, amplified by climate change, pose threats to infrastructure resilience. Extreme events as well as prolonged disruptive phenomena — such as sea level rise, heavy and/or prolonged rain, strong winds etc that damage materials and equipment, cause loss of connectivity and data transmission — can shut down essential facilities and impede the efficient movement of goods and people. The investment deficit in developing countries is estimated to reach $ 3.7 trillion annually. Investing in the resilience of infrastructures in developing countries is estimated to bring an average net benefit of $ 4 for each dollar invested. In order to support infrastructure resilience the G20 should focus on:
- Working on the establishment of a set of common principles on the sustainability of resilient infrastructure taking into account the unique characteristics of each country in terms of their exposure to climate change and disaster risks;
- Promoting new and innovative financing solutions and the introduction of standardized ratings for the maintenance and resilience of infrastructure projects;
- Supporting technical assistance and capacity building to develop and ensure maintenance know-how and expertise.