Jeffrey Sachs visiting Stockholm

Sida's Director General Charlotte Petri Gornitzka talking with Jeffrey Sachs, Ban Ki-moon's special advisor on the Millennium development goals, at an investors' conference in Stockholm.

Photo: Karin Svensson, Sida

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Private capital needed for sustainable development

Updated: 16 January 2015

"The private sector is fundamental for financing for sustainable development," says Jeffrey Sachs, special advisor on the Millennium development goals. He also advocates a broader pool of donor countries to boost global climate efforts.

Today's world needs a surge in sustainable infrastructure such as low-carbon energy, public transportation, and climate-resilient coastal management for flood control, says Jeffrey Sachs, Director of the Earth Institute, Columbia University and Ban Ki-moon's special advisor on the Millennium development goals, while on a visit to Stockholm to speak at an investor conference and meet with Prime Minister Stefan Löfven.  

”Only private capital will provide the financing at the scale that is needed.”

Being one of the initiators of Sida’s Swedish Leadership for Sustainable Development, he says that we are moving to an age in which government-business cooperation can provide “key breakthroughs at all stages of the value chain.”

Public-private partnerships can help to develop new sustainable technologies. They could also help in service delivery, such as in ICT for health and education, and in smart grids for sustainable cities.  

“I am a great fan of Swedish Leadership for Sustainable Development, since it is finding new and expanded ways for Sida to work with some of the world's leading and most innovative firms, such as Ericsson, H&M, and Volvo. I am seeing the results on the ground, such as Ericsson's leadership in ICT for schools, H&M’s work on service delivery in the communities where its shops are located in the US, and Volvo's leadership on sustainable transportation,” says Jeffrey Sachs.

Window of opportunity

The oil price, having fallen dramatically from around 100 USD a barrel to 50 USD is an “opportunity” according to Sachs, due to less interest in new investments in drilling. This represents a great moment to instead boost investments in renewable energy systems, including hydro, solar, wind and, in some countries, nuclear and perhaps carbon capture and sequestration.  

But the long-term challenges are great, and there is a need for much greater commitment from companies, countries and the wealthy in order to achieve the sustainable development agenda during this year.

"This is a unique opportunity. 2015 is a breakthrough year in terms of setting a new environmental agenda and the new sustainable development agenda", says Jeffrey Sachs.

The year of 2015 holds three crucial UN meetings that will have a great impact on the future: In mid-July, the UN Conference on Financing for Development in Addis Ababa; in September, the meeting of the UN General Assembly in New York to adopt Sustainable Development Goals; and in December, the UN climate summit in Paris, COP21.

"But environmental and climate issues must be brought up already during the Financing for development conference in Addis Ababa in July. Otherwise we risk out on not making the schedule."

Sustainable Development Goals

All this will be framed by the work on the new SDG objectives, Sustainable Development Goals, in which all parameters must be set and intermingled.

Jeffrey Sachs notes that after the development goals are set and adopted it is important to define an action plan, and he has several suggestions. When it comes to environmental goals he recommends that each country is forced to specify how it will reduce carbon emissions so that they become virtually non-existent by the end of the century, which is necessary for the world to reach the agreed-upon global upper limit of 2 degrees Centigrade of warming. To Jeffrey Sachs it is crucial that private companies, technology companies and especially oil companies, are co-funding the climate agenda and the fight for carbon reduction.

"The oil companies could be involved in funding research on how to capture and store carbon dioxide, for example."

Jeffrey Sachs also suggests that the UN should reach a commitment for each country to contribute funds for “climate financing” based on their carbon emissions. If each high-income country contributes $2 per ton of CO2 emissions, the total sum would be around $36 billion, a substantial contribution towards the $100 billion per year by 2020 that has been promised for climate financing for low-income countries. 

Broader pool of donors

With regard to the overall Sustainable Development Goals Jeffrey Sachs suggest a broader pool of donors.

"All high-income countries should commit to giving 0.7 per cent of their gross national income (GNI) in ODA, whether or not they are DAC/OECD members. Also, upper-middle income countries such as China and the other BRICS countries are becoming donors as well. The Upper-Middle Income Countries (UMICs) could, for example, commit to contribute 0.1 percent of their gross national income as development aid. There must be a global solidarity of high-income and upper-middle- income countries with low-income countries."

The world's richest people should also be involved in funding the development agenda, recommends Jeffrey Sachs. More than 1600 individual billionaires have a combined net worth estimated at around 6.4 trillion USD and if they gave a small part of this to development, it would make a huge difference, he says.

"I want to propose a new global fund for education, like GAVI (the Vaccine Alliance) and I think our new sustainable development goals should include universal secondary education for all children."

The underdeveloped health systems can be addressed with another new global fund for health, that combines GAVI, the global fund to fight AIDS, TB, and malaria, World Bank funding, and a new “aid window” for health systems.

Page owner: Communication Unit

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