Fixing the Green Investment and Coherence Gap through Structural Green Transition Policies

The G20 governments face compounding crises or ‘polycrisis’ while delivering the green transition over several political cycles. The multilateral challenge can only be addressed by engaging the G20, allowing structural green solutions to be embedded into national development pathways. COVID-19 green recovery packages have helped the progress of the green transition, but structural green transition policies that deliver longer-term returns-for example, natural capital/ nature-based solutions-have received limited attention and investment. Governments need the assurance of a coordinated multilateral response and favourable treatment from international financial institutions. Policy options include continuing the status quo, with structural green policies remaining uncoordinated across governments, treated on a case-by-case basis, thereby leading to underinvestment; coordination among G20 members to define and promote structural green transition policies, identify priority policy areas, create concessionary finance opportunities and drive national investment; and development of a multilateral framework for structural green transition policies, inspired by the lessons learnt from the G20’s Enhanced Structural Reform Agenda (ESRA) and Debt Service Suspension Initiative (DSSI) and aligned with such approaches as the Bridgetown Initiative. We recommend that the G20 adopt a shared, ambitious agenda that allows structural green transition policies to act as enablers of other policy goals and be the ‘badge’ that facilitates flow of green investment to low-income countries.