Baku should deliver agreement to mobilise $1tn per year for developing countries by 2030: Top experts
The investment breakdown by 2030 shows advanced economies requiring $2.7-2.8 trillion, China needing $1.3-1.4 trillion, and other EMDCs needing $2.3-2.5 trillion
New Delhi: Global climate investment needs are projected to reach $6.3-6.7 trillion annually by 2030, with emerging economies requiring nearly half the funding, according to a new report by the Independent High-Level Expert Group on Climate Finance, which called on the ongoing climate conference to deliver on a commitment to deliver at least a trillion dollars every year by 2030.
The report, co-authored by economists Amar Bhattacharya, Vera Songwe and Nicholas Stern, calls for mobilising $1 trillion yearly by 2030 in external finance for emerging market and developing countries (EMDCs) excluding China to meet Paris Agreement goals. This figure needs to increase to $1.3 trillion by 2035.
“The less the world achieves now, the more we will need to invest later. Delayed action means we will need to mobilise even larger sums in shorter time frames to catch up on critical targets,” the authors warned, emphasising that investment needs for adaptation, resilience, and loss and damage will rise sharply as climate risks escalate.
The investment breakdown by 2030 shows advanced economies requiring $2.7-2.8 trillion, China needing $1.3-1.4 trillion, and other EMDCs needing $2.3-2.5 trillion. By 2035, global requirements are projected to rise to $7-8.1 trillion annually, with advanced economies needing $2.6-3.1 trillion, China $1.3-1.5 trillion, and other EMDCs requiring $3.1-3.5 trillion.
“These needs are our estimations of what is required for delivery on the Paris Agreement, and the investments will also make a vital contribution to sustainable growth and the achievement of the Sustainable Development Goals,” the report noted.
The authors highlighted a significant opportunity for developing countries due to falling technology costs, particularly in solar power. However, they pointed out a stark disparity in investment distribution, noting that “Africa accounts for about 60% of the world’s best solar resources, but received less than 2% of the investment in clean energy in 2023.”
“Ramping up climate investments in EMDCs is the only way to reach the Paris Agreement goals of limiting the global temperature increase to well below 2 degrees Celsius and adapting to climate change, and to arrest the accelerating threat to nature and biodiversity,” the authors emphasised.
Currently, domestic resources fund about 70% of climate finance, capable of financing $1.4 trillion annually by 2030 and $1.9 trillion by 2035. External finance from international public and private sources must bridge the remaining gap of $1 trillion per year by 2030 and around $1.3 trillion by 2035.
The report identified three key priorities requiring immediate attention: preparing and implementing high-quality investments; establishing necessary macroeconomic and sectoral policy reforms; and mobilising finance at scale while improving access to affordable capital.
Investment concentration remains heavily skewed toward large economies like India and Brazil, while many developing nations struggle with challenging policy environments and higher capital costs. The disparity is particularly stark in Sub-Saharan Africa, which receives just $12 per capita in energy transition investments - 40 times below the global average, despite its significant renewable energy potential.
The COP29 in Baku and the upcoming G20 Summit in Rio de Janeiro present crucial opportunities to advance the climate finance agenda, deliver an ambitious New Collective Quantified Goal (NCQG), and identify priority actions for progress, the authors concluded.