The introduction of the Sustainable Development Goals and the signing of the Paris Agreement in 2015 marked significant victories for future generations, but actions to translate these goals into reality in 2017 may be more noteworthy, starting with China’s expected announcement by the end of the year that it will put a price on carbon dioxide emissions. By engaging with emerging market regulators, it will hopefully provide the policy support to encourage them to follow China’s lead on sustainable finance.

The reported price that China will introduce is $5 per tonne, which is below the social costs of CO2 emissions (the Organisation for Economic Co-operation and Development estimated a lower bound cost of €30 ($35) per tonne) but the symbolism is more significant. As one of the largest and fastest growing CO2 emitters in the world, China’s action to put an economic price on carbon emissions shows a change in the narrative around climate change. As the cliché goes, ‘if you can measure it, you can manage it’ and by introducing a price on carbon, it changes the way that businesses view CO2 emissions by bringing it on-balance sheet.

While the Middle East prepares for a post-oil era, Dubai is making headway towards sustainability and has recently announced the largest single-site Concentrated Solar Power (CSP) project in the world, which will be built at a total cost of 14.2 billion UAE dirhams ($3.8 billion). The project, which represents the fourth phase of the Mohammed bin Rashid Al Maktoum Solar Park, will generate 700MW of clean energy to support Dubai's electricity grid. The project is considered an integral part of the Dubai Clean Energy Strategy 2050. The emirate is expected to announce new developments and initiatives at the World Green Economy Summit later this month.

In a parallel development showing commitment from emerging markets for climate action, the Emerging Markets Committee of the International Organization of Securities Commissions (IOSCO) announced it would establish a task force on sustainable finance. With the announcement of the task force being made before the European Commission’s High Level Expert Group on Sustainable Finance makes its final report by year-end, the task force will have the benefit of seeing both the final recommendations and perhaps more importantly be able to point to the financial institutions and supervisory authorities’ reactions to the recommendations.

In both of these developments, the focus of global climate efforts is shifting to Asia, where China’s shift towards more environmentally sustainable development has spurred the green bond market globally, helping it to cross the $100 billion mark for new issuance in 2017. Similarly, IOSCO’s emerging markets-focused sustainable finance task force was led by the Committee’s Vice Chairman, Datuk Ranjit Ajit Singh, who serves as chairman of Malaysia’s Securities Commission.

What regulators from IOSCO’s Emerging Market Committee and China’s government may realise, that others overlook, is that emerging markets have been able to reshape key aspects of the development narrative and may be in the process of doing it again with regards to sustainability. Emerging markets have not needed to make landline telephones universally available, mainly due to mobile phones becoming much more widely distributed, even where landlines are not available. In finance, FinTech provides access to finance to those who do not live near a bank. Likewise, in sustainable energy, distributed renewable power is providing access to electricity for those who live outside of the electricity grid.

Government regulations are critical to accelerating and bringing new developments to scale by curbing the free rider problem where those who incur costs for becoming more sustainable do not have to compete against those who can avoid similar cost. This will align incentives to bring the discipline of the market to force more serious consideration of external costs.

While it is possible to imagine development of sustainable energy, sustainable finance and sustainable development happening with or without regulatory structure, there are significant costs to any delay and time is truly of the essence when it comes to climate change. The costs of delay are real and have human impacts that governments have a responsibility to take action on and there will be significant economic opportunities for countries and businesses that are at the forefront of this.

Any opinions expressed here are the author’s own.