Green Finance And Sustainable Development Goals: Lessons From Select South Asian Economies

Abstract

Sustainable Development is a process of rejuvenation that aims for long-term resilience, where social inclusion, environmental sustainability, and economic development possess equal worth. In September 2015, all the member states of the United Nations reached a consensus to transform the world through Agenda 2030, which consists of 17 Sustainable Development Goals (SDGs) and 169 specific targets. The World Bank and the International Monetary Fund placed importance on the development finance, which is crucial for achieving the 17 SDGs. The Organization for Economic Co-operation and Development (OECD) and the United Nations Development Programme (UNDP) have collaboratively designed a framework to enhance the developmental impact of international private-sector investments by aligning them with the Sustainability Development Goals (SDGs). This framework also recognizes the important role of the public sector in creating an environment to synchronize the private sector investments with the SDGs. The SDG-aligned capital flows should be mobilized towards the countries having a funding gap in the SDG oriented sectors.

This study attempts to explore the need for financing the SDG-oriented dimensions of the selected South Asian economies, namely Bangladesh, India, Pakistan and Sri Lanka. A composite index is constructed using Principal Component Analysis for each dimension ranging from 2000 to 2019. The trends of the indices confirm that financing is necessary with regard to the stated dimensions. It is highly imperative for the policy makers to focus on the SDG related dimensions for the selected economies for a safe and sustainable future.