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Energy markets and access<br />
KEY TAKEAWAYS<br />
Financial markets are increasingly<br />
investing in low-carbon innovation<br />
Scaling up green finance means<br />
removing market distortions<br />
Scott<br />
Vaughan<br />
President and CEO<br />
International Institute<br />
for Sustainable<br />
Development<br />
Scott Vaughan is President and<br />
CEO of the International Institute<br />
for Sustainable Development and<br />
a former Counsellor with the World<br />
Trade Organization. He has served<br />
as Canada’s Commissioner of the<br />
Environment and Sustainable<br />
Development as well as the<br />
Director of the Department of<br />
Sustainable Development at the<br />
Organization of American States.<br />
He is a former Visiting Scholar<br />
at the Carnegie Endowment for<br />
International Peace and the<br />
former Head of Economics at the<br />
North American Commission for<br />
Environmental Cooperation. At<br />
the United Nations Environment<br />
Programme, he initiated the<br />
Finance Initiative and work on<br />
trade and environment.<br />
@IISD_news<br />
www.iisd.org<br />
Expanding green<br />
finance, ending<br />
fossil fuel subsidies<br />
The <strong>G20</strong> should build on the commitments made in the<br />
Paris Agreement last year to accelerate phasing out<br />
fossil fuels, writes Scott Vaughan<br />
Sustainable development is<br />
about investments. They enable<br />
a choice between a coal-fired<br />
power plant or renewable energy,<br />
light rail transit or a six-lane<br />
highway, and oil and gas or small-scale,<br />
off-grid solar-powered households. These<br />
investment decisions are made daily<br />
around the world. Together they set the<br />
trajectory towards either a low-carbon and<br />
clean economic future or business as usual.<br />
Financial markets are increasingly<br />
investing in clean, low-carbon innovation,<br />
from transportation and infrastructure to<br />
electricity and forestry practices. Green<br />
finance is growing steadily from a small,<br />
boutique market niche into a broader range<br />
of green financial products.<br />
The <strong>G20</strong> has been important in both<br />
mirroring and pushing these structural<br />
shifts. Its Working Group on Green Finance<br />
is exploring how different financial market<br />
actors, from central banks and asset<br />
managers to green bond providers and<br />
purchasers, can work together.<br />
<strong>G20</strong> work supports convergence<br />
on a common definition of what green<br />
means within financial markets, as well<br />
as standardised accounting, third-party<br />
disclosure and verification practices.<br />
Markets need tools to identify how green<br />
investments differ from standard financial<br />
products. Scaling up green finance means<br />
removing market distortions that block<br />
progress, such as the hundreds of billions<br />
governments spend on fossil fuel subsidies.<br />
214 <strong>G20</strong> China: The Hangzhou Summit • September 2016 G7<strong>G20</strong>.com
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