A study released on Tuesday by the International Finance Corporation (IFC), a member of World Bank Group, shows that the historic global agreement on climate change adopted in Paris last year helped open up nearly $23-trillion in opportunities for climate-smart investments in emerging markets between now and 2030.
Since the Paris Agreement was adopted in December 2015, 189 countries have submitted national plans that target aggressive growth in climate change mitigating solutions – including renewable-energy, low-carbon cities, energy efficiency, sustainable forest management and climate-smart agriculture.
The IFC’s study, based on the national climate change commitments and underlying policies of 21 emerging market economies, identifies sectors in each region where the potential for investment is the greatest.
This includes green buildings in East Asia and the Pacific, where China, Indonesia, the Philippines and Vietnam show a climate-smart investment potential of $16-trillion.
Sub-Saharan Africa represents a $783-billion opportunity, particularly for clean energy in Côte d’Ivoire, Kenya, Nigeria and South Africa.
In the Middle East and North Africa, the combined investment potential for Egypt, Jordan and Morocco is estimated at $265-billion, over one-third of which is for renewable-energy generation.
In Eastern Europe, the biggest markets – Russia, Serbia, Turkey and Ukraine – show a combined investment potential of $665-billion, mainly in energy efficiency and new green buildings.
“There has never been a better time than now for climate-smart investing,” said IFC executive VP Philippe Le Houérou.
The report also finds that government action will be critical to unlock the full scale of investment potential.
It recommends that governments integrate national climate commitments into their development strategies and budget processes, strengthen the investment climate for industries that assist in climate change mitigation, and deploy public funds strategically to mobilise private capital.