A report released by International Energy Agency (IEA) and by the International Finance Corporation (IFC) revealed that annual investments in clean energy in emerging and developing economies will need to more than triple by the early 2030s. , reach the US$ 2.8 trillion mark in order to meet growing energy needs and align with the climate targets set out in the Paris Agreement.
The report, titled “Scaling Up Private Finance for Clean Energy in Emerging and Developing Economies“, points out that public investments alone will not be enough to face the challenges of the energy transition and combat climate change. Instead, increasing private finance, in partnership with private sector capital, is critical to reducing project risks and driving the advancement of renewable energy.
According to the report “the case for building tomorrow's energy systems around clean technologies is a compelling one, allowing the Paris Agreement emission targets and energy access targets to be met, while sustaining growth. sustainable economy and job creation. Although high-income economies account for the majority of past emissions, without a focus on transforming their energy systems, emerging and developing economies (EMDEs) will continue to account for the biggest source of future emissions growth.”
The report further reveals that “a major increase in clean energy deployment across all EMDEs will require an increase in all funding sources: public and private, national and international, utility and non-utility”.
According to the IEA, around two-thirds of the funding needed for clean energy projects in emerging and developing economies – this context excluding China – will need to come from the private sector. Currently, private investments in these countries total US$ 135 billion annually, but it is necessary to increase them to US$ 1.1 trillion per year in the next decade.
IEA Executive Director Fatih Birol underscored the importance of private investment to ensure countries are not left behind in this global energy transition. He emphasized that investment needs go beyond public funding capacities, making large-scale mobilization of private resources urgent. In addition to the environmental benefits, such as expanded access to clean energy and the reduction of greenhouse gas emissions, the sector's ability to improve is directly linked.
The report also highlights the need for international technical, regulatory and financial support to unlock the potential of clean energy in emerging and developing economies. Strengthening regulatory frameworks, institutions and energy infrastructure, as well as facilitating access to finance, are essential measures to overcome the obstacles that currently impede investments in clean energy in these countries. Another conclusion of the report highlights the potential for green, social, sustainable and sustainability-linked bond issuance.
Climate finance going to emerging countries, which encompass developing nations such as Brazil, India, South Africa, Indonesia and Vietnam, is forecast to double over the next three years. Currently, this financing is around 30 billion dollars, however, given the urgent need to face the challenges of climate change, a significant increase in this amount is expected. China, which is the second largest global economy and the largest emitter of greenhouse gases, presents a different context. Due to its scale and importance on the international stage, China requires a specific and targeted approach to address climate challenges.
The secretary general of the United Nations (UN), Antonio Guterres, highlighted the importance of reviewing the functioning of the international financial system, in order to provide assistance to countries affected by climate catastrophes, such as the recent case of Pakistan, which faced floods historic this year. Guterres highlighted the need for more robust and effective financial support for these nations, with a view to strengthening their capacity to deal with the impacts of climate change.
Growing awareness of climate urgency has driven efforts to increase climate finance in order to enable mitigation and adaptive actions in emerging countries. These investments play a key role in transitioning to a sustainable economy and building resilience in the face of climate challenges.
As the international community recognizes the critical importance of supporting developing countries, it is expected that financial resource mobilization will intensify, enabling these nations to address the impacts of climate change and forge a sustainable path for the future.
Issues that Impact Climate Patterns
Climate change refers to long-term changes in Earth's weather patterns resulting from increased concentrations of greenhouse gases in the atmosphere. These gases, such as carbon dioxide (CO2), methane (CH4) and nitrous oxide (N2O), are mainly released by burning fossil fuels, deforestation and industrial activities.
Climate change results in a range of impacts and changes in weather patterns. Among the main changes are:
Temperature rise: Global warming is one of the main effects of climate change. Average temperatures are rising around the world, leading to record heat, more frequent and prolonged heat waves, and the melting of glaciers and ice caps.
Changes in precipitation patterns: Climate change affects the distribution of rainfall. Some regions may experience more intense and prolonged droughts, while others suffer from heavy rainfall and flooding. These changes can have significant impacts on agriculture, water availability and food security.
Sea level rise: Melting ice caps and glaciers contribute to sea level rise. This poses a threat to coastal areas and low-lying islands, increasing the risk of coastal flooding and coastline erosion.
Weather extremes: Extreme weather events such as more intense storms, hurricanes, tropical cyclones and tornadoes are becoming more frequent and intense due to climate change. These events can cause significant damage to infrastructure, agriculture and human life.
Ocean acidification: Increasing concentrations of carbon dioxide in the atmosphere also have an impact on the oceans. CO2 absorbed by the oceans leads to acidification of the seas, which negatively affects coral reefs, marine organisms and the ocean food web.
Changes in ecosystems: Climate change affects terrestrial and aquatic ecosystems, leading to changes in the distribution of species, extinction of some species, imbalances in ecosystems and loss of biodiversity. This can affect food availability, the health of natural ecosystems and the balance of ecosystems.
The effects of climate change are observed around the world and include the increase in the average temperature of the Earth, the melting of the polar ice caps and glaciers, the rise in sea levels, the acidification of the oceans, the intensification of extreme weather events such as storms, droughts and floods, and the loss of biodiversity.
Climate change is considered one of the greatest threats facing humanity and the planet as a whole. It has significant impacts on human health, food security, water supplies, the global economy and natural ecosystems.
To combat climate change, global efforts are being made to reduce greenhouse gas emissions, increase the use of renewable energy, improve energy efficiency, promote sustainable agricultural practices and protect natural ecosystems.
Mitigating climate change requires international cooperation, effective government policies, investments in clean technologies and changes in individual behavior. Furthermore, adapting to climate change is critical to dealing with impacts already underway and ensuring the resilience of communities and ecosystems.
Emerging Countries in the Search for Bold Climate Goals
In a global scenario of growing concern about climate change, emerging countries are becoming protagonists in the search for sustainable solutions and ambitious climate goals. These developing nations, such as Brazil, India, South Africa, Indonesia and Vietnam, recognize the importance of taking effective action to combat climate change and ensure a sustainable future for their citizens.
Emerging countries face unique challenges in reconciling economic development and reducing greenhouse gas emissions. However, they are determined to find innovative solutions and invest in clean technologies to drive the energy transition. Renewable energy has been a major issue in these nations, with significant investments in sources such as solar, wind, hydroelectric and bioenergy.
Emerging countries recognize the need to adapt to the consequences of climate change. With extreme weather events becoming more frequent, climate resilience measures are being implemented to protect vulnerable communities and reduce negative impacts.
To achieve their climate goals, emerging countries rely on international partnerships and financial investments. The engagement of developed countries and multilateral institutions is essential to provide needed resources, technology transfer and capacity building. Such global cooperation is critical to accelerating the transition to a low-carbon economy.
It is important to emphasize that the climate action of emerging countries not only benefits the environment, but also drives socioeconomic development. The adoption of sustainable practices creates job opportunities, promotes the growth of green sectors and improves the quality of life of local communities.
Emerging countries face financing constraints, technological barriers and the need for effective public policies to promote sustainable transition. The continued support of the international community, as well as the exchange of knowledge and experiences between countries, are fundamental to overcome these obstacles and reach more ambitious climate goals.
As emerging countries step up their efforts to address climate change, they become significant agents of change on the global stage. Its actions inspire other countries and demonstrate that it is possible to reconcile economic growth with environmental sustainability. The fight against climate change is a shared responsibility and requires the collaboration of all nations, regardless of their stage of development. Together, we can build a safer, more sustainable future for present and future generations.
