As COP28 Looms, IMF calls for accelerated private sector Involvement and Technology Innovation to Achieve Net-Zero Goals by 2050
The International Monetary Fund (IMF) asserts that achieving net zero by 2050 necessitates a substantial increase in green investments. From $900 billion in 2020, this figure must surge to $5 trillion annually by 2030, as outlined in a recent blog by IMF officials Simon Black, Florence Jaumotte, and Prasad Anandakrishnan.
EMDEs (Emerging and Developing Countries) specifically require $2 trillion annually, a fivefold increase from 2020, even if advanced economies fulfil their promise to contribute $100 billion annually. The IMF contends that the lion's share of financing for low-carbon investments must come from the private sector.
The blog warns that policies, eight years after the Paris Agreement, are insufficient to stabilise temperatures and counteract the worst effects of climate change. With emissions reduction lagging, the IMF stresses the urgency for increased investment, financing, and technology.
This IMF guidance precedes the COP28 meeting in Dubai, where global leaders will strategise future climate mitigation efforts. The COP28 conference, scheduled from November 30 to December 12, 2023, is pivotal for shaping climate action.
According to the IMF, private sector involvement in climate finance must surge from 40 percent to 90 percent of the total EMDEs by 2030. Overcoming barriers such as foreign exchange risks and underdeveloped capital markets is crucial to achieving this shift.
While it is possible to achieve over 80 percent of the required emissions cut by 2030 with existing technologies, reaching net zero by 2050 will require developing and adopting new technologies. Unfortunately, the number of patent filings for low-carbon technology has declined since 2010, hindering progress in spreading key technologies to emerging and developing nations.
India, committed to becoming a developed nation by 2047, pledged ambitious targets at COP26 in 2021, including 500 GW of non-fossil electricity capacity, half of energy from renewables, a 1 billion tonne emissions reduction, a 45 percent decrease in emissions intensity of GDP, and net-zero emissions by 2070.
In anticipation of COP28, India's finance minister, Nirmala Sitharaman, urged tangible action on climate funding and technology transfer, highlighting the challenges of developing economies. The summit, she emphasised, must provide clear directions for both technology transfer and funding to address climate change effectively.