Professor Jeffrey Sachs, director of the Earth Institute at Columbia University and director of the Sustainable Development Solutions Network, said the role of the infrastructure industry in investing to assist sustainable development is “vital” but is not being done on the scale required.
Delivering the opening speech at the Berlin Summit 2014 in front of around 600 delegates, Sachs said that global economic growth and development over the next decade would need to be investment led rather than consumption led but the models to achieve this do not exist in most of the world, including North America and Europe.
He added that global infrastructure investment needed to be in the region of $5-6 trillion a year – or around 4-6 percent of global GDP – but that it was currently around half this level or less. This was described as a “growth opportunity” for the industry and one that could help to combat climate change. Sachs said the planet could be “wrecked” if the temperature of the planet were allowed to rise by more than 2 degrees centigrade – but, if inaction continues, that figure could reach between 4 and 7 degrees by the end of the century.
Sachs said a process of “deep decarbonisation” was needed, involving a fundamental revamp of energy systems. He told investors in the audience that if they were not financing low carbon, he would rather they were not financing energy at all. He added that, merely to adapt to existing climate changes, infrastructure would need to be built with much greater resilience.
Sachs also called for greater regional cooperation and regional energy strategies. He said that even in Europe, where regional cooperation is most advanced and there were “good goals”, countries “can't get together to plan for a regional grid” that is needed in order to overcome intermittency issues.
He said that the world had got used to thinking markets can solve problems but they can't without forward thinking and a policy framework – and that is not the case when it comes to infrastructure “in most countries”.