This decade presents an opportunity to make a breakthrough on both development and climate goals. The past decade’s slowdown in poverty reduction has been accentuated by the recent coronavirus disease (COVID-19) pandemic and the war in Ukraine. This slowdown is further compounded by the deepening climate crisis. A continued slowdown in poverty reduction and shared prosperity would erode global prosperity, as the current historic demographic transition will place virtually all the global population increases over 2020–50 in emerging markets and developing economies (EMDEs) where most of the poverty is concentrated. Collective action must therefore be taken to avert catastrophic climate change and address the slowdown in development gains. Greater awareness worldwide of the climate change challenge offers a unique opportunity for a reset, setting countries on a high-growth green, resilient, and inclusive development (GRID) path that goes hand in hand with environmental goals and social inclusion and addresses the risks to people, the planet, and the economy in an integrated manner tailored to country needs and objectives.

This report combines insights from members of the High-Level Advisory Group on Sustainable and Inclusive Growth including Center for Sustainable Development scholars Amar Bhattacharya and Homi Kharas. The report makes the case for a big investment push for EMDEs’ sustainable recovery and development, assesses the magnitude and composition of such investment, presents actions needed for an energy transition, looks at the role that innovations and state capacity can play in facilitating GRID, and proposes actions that governments, the private sector, MDBs, the IMF, and donors can undertake to mobilize financing at the large scale needed.