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The fight against climate change today is urgent, accessible and generates social and economic benefits we cannot ignore. This report signals the opportunity that stands before us for a more sustainable and prosperous future, by using existing resources better.

But for these dividends to take hold we need a wave of green reforms, including increasing support for decarbonisation in the poorest countries – where more than one billion people lack access to electricity – and eliminating concessional development finance that supports and promotes development based on traditional approaches that we know today conflict with sustainability.

These policy reforms, no matter how exigent, will only work if we can make the case that they will stimulate better economic and social conditions. Policymakers and citizens alike must recognise the importance of linking the international development, climate and biodiversity agendas in a way that provides practical, economical alternatives. This report builds on previous work by the OECD demonstrating that a climate-compatible policy package can increase long-run GDP by up to 3% on average across the G20 in 2050. Limiting global warming to well below two degrees could yield a direct economic gain of USD 26 trillion by 2030. And renewable energy is already less expensive than fossil fuel sources in most parts of the world.

Development co-operation has a central role to play in helping developing countries mitigate climate change, become more resilient, and protect the people and places most at risk. Development co-operation also has a unique role to play, as the risks from climate change are greatest for those who have contributed to it least: the poorest and most vulnerable communities. Least developed countries are the ones already feeling the worst effects of the climate crisis and will need sustained support over the coming decades. Small island developing states are just one example of those already experiencing the effects of a changing climate. Those with low-lying terrain fear vanishing completely as sea levels rise, while adaptation for all small islands will be more and more necessary and difficult as temperatures continue to increase.

Many development co-operation providers are already moving to align their development co-operation efforts with ambitious climate action. However, as a whole, donors lack adequate mandates, resources, incentives and strategies to re-orient aid to address the climate emergency, in support of positive national and regional efforts. This work is a first step to help accelerate this transition to pro-climate sustainable development co-operation, the only way forward for healthier people and planet by 2030.

Jorge Moreira da Silva

Director, OECD Development Co-operation Directorate

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