Cost of Sustainable Development Goals
Decades of uncertainty over the interpretation of the concept of “sustainable development” finally ended with the 2015 approval of the Sustainable Development Goals (SDGs) for the period 2016-2030. The SDGs are fully supported with quantifiable targets and indicators, applicable to all countries.
The World Economic Forum has estimated a total cost of the SDGs at $3.9 trillion per annum, compared with a current annual level of development finance of $1.4 trillion. The UN’s World Economic Situation and Prospects 2017 suggests that investment in the 48 Least Developed Countries will need to rise by at least 11 per cent annually in the period to 2030.
These are just two examples from many estimates offered by multilateral development institutions. The formidable task is generally based on an aggregation of costings of individual targets, many of which benefit from years of analysis. For example, experts in global health and education are confident in their price tags for vital targets such as universal access to reproductive healthcare or provision of secondary education for all.
Putting a price on sustainable development must also overcome the complication that many of the Goals overlap. For example, a programme to diversify crops on small farms in Africa makes as much good sense for poverty reduction as for adaptation to climate change. Protecting a tropical forest preserves biodiversity as well as reducing carbon dioxide emissions. These “win-win” options are valuable for prioritisation but confuse the financial equations.
Endorsement of the SDGs was not accompanied by a plan to pay for them, despite the efforts of the UN Financing for Development Conference. This is doubly unfortunate in that the new vision to “leave no one behind” is radical and has significant implications for cost.
Furthermore, there is growing awareness of the expense of adapting to global environmental change, due to its adverse impact on social and economic development. Whilst responsibility for most degradation largely rests with industrialised countries in the northern hemisphere, the impact is likely to be felt disproportionately in poorer countries located in tropical regions.
Estimating the cost of climate change mitigation and adaptation in developing countries can barely keep pace with new evidence of the scale of harmful impacts. The same is true of financial projections for meeting the Aichi Biodiversity Targets, a set of goals agreed under the Convention on Biological Diversity. Whichever estimates are adopted, the annual cost of tackling environmental change in the poorest countries alone will amount to hundreds of billions of dollars, several times the current supply of foreign aid.
It is clear that conventional sources of finance for the poorer countries will not be sufficient to meet this perfect storm of rising demand. However, dedicated sources of finance for sustainable development are available to shore up the funding gap for low income countries, ranging from conventional foreign aid to new vehicles such as the Green Climate Fund.