SLoCaT Summary on the Third International Conference on Financing for Development

The Third International Conference on Financing for Development (FfD3) was held from 13-16 July 2015 in Addis Ababa, Ethiopia.  FfD3 followed on the first international conference on FfD in 2002, which yielded the Monterrey Consensus, and the second international FfD conference in 2008, which produced the Doha Declaration.  

The SLoCaT Partnership has released a summary report to present the key topics of discussion of the FfD3 from the perspective of sustainable transport. Its initial reaction to the AAAA is measured, based on the modest increase in direct references to transport, which have increased from four to five between the zero draft and the final outcome document.  

Direct transport references include intentions to develop more efficient transport systems for landlocked developing countries (para 8); to bridge the infrastructure gap by investing in sustainable and resilient infrastructure in transport and other sectors (para 14); to support local authorities in LDCs and SIDS in implementing environmentally sound infrastructure in transport and other sectors (para 34); to encourage MDBs and regional banks to address gaps in trade, transport and transit-related regional infrastructure by connecting LLDCs, LDCs, and SIDS through regional networks (para 87); and to provide technical assistance to improve trade- and transit-related logistics in LLDCs (para 90).  

In addition, the AAAA provides important references with indirect relevance to transport, which include reaffirming a commitment to rationalize inefficient fossil-fuel subsidies that encourage wasteful consumption (para 31); and encouraging innovative financing mechanisms to bring together public and private resources, such as green bonds and carbon pricing mechanisms (para 69).  

Despite these direct and indirect transport references, SLoCaT notes that the AAAA still does not make adequate explicit references to rural transport, goods transport (including agricultural products), and road safety, as recommended in SLoCaT’s June 2015 comments to the FfD3 co-facilitators.  In addition, SLoCaT notes that AAAA’s references to transport focus primarily on the provision of transport infrastructure at the expense of the equally crucial provision of transport services.  Finally, SLoCaT notes that additional sector-specific recommendations in the outcome document could do more to advance the position of transport relative to other sectors. 

Furthermore, SLoCaT concludes that while private sector participation has a key role to play in providing sustainable transport infrastructure and services (and by extension, in other sustainable development sectors), it must place within strong public sector regulatory and planning frameworks that maximize the private sector’s knowledge, technology and assembly of capital resources to yield the most optimal outcomes under often sub-optimal circumstances.  SLoCaT is encouraged by the fact that these points are generally reflected in the AAAA (para 48). 

Finally (as noted in the review of the zero draft AAA), SLoCaT notes that the AAAA fails to make the critical point that sustainable, low carbon transport investments are more cost-effective than traditional approaches, when considering environmental and social co-benefits (e.g. air quality, GHG reductions, time savings, fuel savings, road safety).  Thus the FfD agenda has missed a key opportunity to note that within the transport sector and other sectors, the most efficient way to generate development finance is to leverage efficiencies that reduce the need for such finance in the first place.

In sum, while SLoCaT is encouraged by existing references to sustainable transport in the AAAA, additional emphasis this crucial cross-cutting function of sustainable transport is required in forthcoming dialogue on development finance.  Thus, while SLoCaT applauds these small steps forward for transport, key arguments remain overlooked.

In the wake of Addis Ababa, the SLoCaT Partnership will continue to develop and promote its financing framework for sustainable low carbon transport in the context of discussions on sustainable development in September 2015, climate change in December 2015, and sustainable urban development at Habitat III in October 2016.

The SLoCaT Partnership has also posted a draft assessment of the AAA zero draft in March and submitted comments to the co-faciliators of FfD3 on the position of sustainable transport in the final draft AAA in June. For more information, please go to here.