Investing in sustainable development is about encouraging fundamental changes in how we produce, distribute and dispose of goods. This means investing in new technologies and processes that can replace unsustainable practices. It also means public spending that addresses inequality, tackles climate change and ends poverty and hunger all this while helping communities build resilience to climate-related extreme weather events like flooding, storm surges, forest fires and prolonged drought.
Markets are already shifting away from so-called "brown" investments, and investors are increasingly changing their calculus of sustainability, driven not only by climate risk in exposed sectors, but also by higher rates of return in cleaner solutions. In 2017, global capacity for solar energy grew faster than all fossil fuels combined, including coal, oil and gas-fired power stations.
Meanwhile, consumer demand for sustainable goods and services continues to grow. In a 2014 survey, more than half of global online consumers said they would pay more for a product or service if the company was committed to positive social and environmental change. This demand has led, among other things, to a wide range of voluntary sustainability standards that track performance against the triple bottom line of environmental quality, social equity, and economic prosperity.
The State of Sustainability Initiatives provides a bird's-eye view of market and performance trends across 16 of the most prevalent standards initiatives operating across 10 different commodity sectors.
But markets alone are not enough. Tax policies send important signals, which is why IISD is working to remove tax-distorting policies like fossil fuel subsidies, which cost governments a staggering USD 425 billion annually. Reforming them could reduce emissions and the ensuing financial savings could be used to boost health, education, renewable energy, public transport, infrastructure and social safety nets. IISD supports international processes, national governments and civil society organizations with the aim of aligning subsidies with sustainable development.
As developing country governments seek to capitalize on the coming green economy, we are working to show how low-carbon and resilient infrastructure, together with infrastructure that uses nature, is reliable and provides value for money. We are also working to scale up sustainable procurement, given that public procurement is estimated to represent 15-20 per cent of global GDP.
And as countries ramp up their climate policy actions, green industrial policy is an increasingly hot issue area. The goal is to go green while also driving economic development. Electric vehicles and the coming transport revolution represent a technological turning point, and many countries are looking to invest in vehicle manufacturing and battery technologies.
As this transition takes place, we analyze how trade and investment law can be made more friendly to climate objectives and help countries reform rules and institutions that govern international investment flows. Our model investment agreements and on-the-ground investment contracts and support to negotiators aim to bring lasting jobs, housing, public health, schools and other benefits to communities.