Publication - Actions to Mobilize Capital to Emerging Markets and Developing Economies
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Title
Actions to Mobilize Capital to Emerging Markets and Developing Economies
Publisher
Glasgow Financial Alliance for Net Zero (GFANZ)
Author
Glasgow Financial Alliance for Net Zero (GFANZ)
Published in
November 2024
Abstract
Achieving net zero requires a truly global, whole-economy transition. The transition of emerging markets and developing economies (EM&DEs is critical to achieving global climate goals. Estimates indicate that by the end of the decade an additional US$ 1 trillion per annum will be required for clean energy investment in EM&DEs alone to put the world on track to reach net zero by 2050.
Despite this, there has been insufficient momentum in mobilizing climate finance to support their just transition to economies with clean, affordable, and accessible energy.
New BloombergNEF research commissioned by GFANZ, Mobilizing Capital into Emerging Markets and Developing Economies, explores the current state of energy transition investment in order to better understand and address the challenges and opportunities of mobilizing capital to support EM&DE transition. Positively, domestic investment into renewable energy plants in EM&DEs has increased 19% in 2020-2021, reaching new highs and recording the largest increase since 2015. Overall, renewable energy investment in EM&DEs increased 40% in 2017-21 compared with 2012-2016, but much more is needed. The overall picture, including international flows, has been less positive in recent years; energy transition asset finance in EM&DEs remained flat in 2021 at $67 billion, the same level as in 2019 and a marginal decline from the $73 billion peak reached in 2018. The impact of the pandemic explains some of this stagnation, but energy transition investment in developed nations has recovered and grew 24% year-on-year in 2021 — the climate finance mobilization gap is widening.URL
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