Emerging Markets Ripe for Climate Deals, but Come With Social Costs, Risks
By Jennifer Laidlaw
There is huge need for financing climate-related projects in emerging markets, but the social costs and the lack of return are acting as deterrents to global lenders.
Developing countries will play a crucial role if the world is going to meet climate goals like the Paris Agreement on climate change, which aims to limit global temperature rises to less than 2 degrees C. Investors and policymakers in developing countries are caught between a rock and a hard place, however, as the social and financial cost of a rapid green transition could be huge, something that has been compounded by the coronavirus pandemic, market participants say.
The World Bank’s International Finance Corp. estimated funding needs of $29.4 trillion by 2030 in infrastructure, energy-efficient buildings, renewable energy and water management in emerging markets.
Photo courtesy of Lukas Bato.