The year 2015 connected the dots in sustainable development, starting with the Addis Ababa Action Agenda (AAA) signed in July, which provides a broad framework for the international community to finance sustainable development.

In September, nations adopted the 2030 Agenda for Sustainable Development. The associated Sustainable Development Goals (SDGs) signaled a firm global intent to integrate environmental development into economic and social development. In December, the historic Paris Agreement was adopted, committing the world to finally tackling climate change and providing a high-level climate policy framework for environmentally sustainable growth.

Cumulatively, these global initiatives could transform development models, addressing issues such as hunger, poverty, unemployment, human health, climate change, degraded ecosystems and social inequity. These milestones should be celebrated. However, achieving environmentally sustainable, socially and economically inclusive development in an impactful and lasting way will require innovative actions on all fronts.

Massive investment needed

Financing the SDGs will require at least $1.5 trillion extra annually over what was required for the Millennium Development Goals (MDGs). To put this into perspective, the cost of achieving the MDGs globally was estimated at over $120 billion annually. Currently, public finance is inadequate. For instance, large infrastructure development in Latin America, Asia and Africa – covering transport, energy, water and sanitation, and telecommunication – requires between $689 billion and $1.28 trillion in incremental annual investment to meet SDG 6 (clean water and sanitation), SDG 7 (expand access to affordable clean energy), SDG 9 (build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation) and SDG 11 (sustainable cities and communities).

On energy alone, Africa will require cumulative investments of up to $490 billion by 2040 for new electricity generation capacities, and 31% more for an aggressive focus on renewables to bring power to an estimated 621 million Africans who have no access to electricity.

To make progress on action climate change (SDG 13), the UNEP Global Adaptation Gap Report says the world will need to invest up to $500 billion annually by 2050, even if the target of no more than 2°C global temperature rise is achieved. Therefore, innovative approaches, including private funding, are clearly needed to bridge the funding gaps.

Environment and sustainable growth

Global processes, including the AAA and the UN Environmental Programme Inquiry into sustainable financing, buttress the view that sustainable development requires diversified sources of financing in addition to the traditional international public finance. With appropriate policies, the environment can contribute to achieving the SDGs directly, through ecosystems goods and services and indirectly, through earnings from the environment.

Nature provides staggering amounts of money and services to economies. For example, between $235 billion and $577 billion worth of annual global food production relies on direct contributions of pollinators, a critical ecosystem service. The global cocoa bean crop, valued at $5.7 billion annually, depends on biodiversity resources, including pollinators such as the cecidomyiid and ceratopogonid midges. By protecting pollinators, therefore, nations directly contribute to SDG 2, which is to end hunger, achieve food security and improved nutrition, and promote sustainable agriculture.

In Asia, meanwhile, the economic value of captured fisheries in the Mekong River basin alone is estimated to be between $1.4 billion and $3.9 billion annually. Over 120 million people in the Coral Triangle, a marine area in the western Pacific Ocean, depend directly on local marine and coastal resources for their income, livelihoods and food security.

In Africa, environmental resources account for 77% of total exports and 42% of government revenues. Over 70% of the sub-Saharan Africa population depends on forests and woodlands for livelihood.  This means environmental resources can create income opportunities for people at national and household levels, contributing to SDG 1, which is to end poverty in all its forms.

However, substantial environmental resources are being lost. For example, the cost of environmental degradation is $9 billion annually in the Middle East; in South Asia, it is estimated at $1.5 billion; and in sub-Saharan Africa, the loss is estimated at $68 billion per year. According to UNEP’s Environmental Crime Crisis report, the monetary value of all transnational organized environmental crimes is between $70 billion and $213 billion annually. This money finds its way into the pockets of criminal groups.

Environment and SDGs implementation

To achieve adequate capacity in implementing the SDGs, countries and regions should ensure the efficient management of natural capital, including reversing environmental loss, resource plunder and illicit financial flows.

Once environmental loss is reversed, an example of a policy measure that can be achieved through national actions is to prioritize the allocation of a percentage of environmental-based earnings to sectors that will catalyze the implementation of the 2030 Agenda.

Other examples include programmes that enhance agro-productivity, and clean energy – two highly potent sectors that derive from natural capital. This could, especially in the developing world, enhance food security and boost the development of rural industry, thus creating jobs and income opportunities. It will combat poverty (SDG 1), enhance food security (SDG 2) and expand access to affordable clean energy (SDG 7). It is particularly worthwhile for regions such as Africa, where enhancing productivity of the agro-sector could potentially enhance efforts to achieve all the SDGs.

There are many other examples of specific ways that natural capital can contribute to achieving the SDGs in Africa. By reversing and recouping environmental losses, over $200 billion annually on average can be injected into high initial cost areas such as healthcare and education, or infrastructure and industrial development. In addition, these funds can be leveraged as seed capital to explore additional large-scale international public sources, such as an increase in Overseas Development Assistance loans or private sources. 

A portion of the average revenues that countries earn directly from the environment through export of timber, fisheries, minerals, agro-produce and tourism could be re-invested to boost productivity of highly potent and inclusive sectors. For example, investing in Ecosystem-based Adaptation-driven agriculture will impact sustainable commercial value chains and enhance food security by up to 128% yield increases and farmers’ incomes, and create jobs (estimated at 17 million jobs in Africa alone). It can also catalyze Africa’s agro-sector worth $1 trillion by 2030.

There is no doubt that sustainably managing the environment offers a cost-effective mechanism for implementing the SDGs. Strategies are urgently needed to sustainably harness the world’s environmental resources, including appropriate policies and practices to reverse ecosystems degradation and combat environmental crimes.

A need exists, also, to prioritize the reallocation of current earnings from environmental resources to environment-based sectors. This task is huge, but it is worth tackling. If pulled off, the world will be well on the road to creating a better and more just future for all.

Mr. Ibrahim Thiaw is a UN Assistant Secretary-General and Deputy Executive Director, UN Environment Programme (UNEP)