2023-10-02 13:43:49
If the world wants to achieve carbon neutrality by 2050, the private sector will have to provide 80% of the financing needed in emerging countries to achieve this, according to the annual report of the International Monetary Fund (IMF). These countries are not able to cover these needs unless they increase their debt by almost 50% on average.
A drastic increase in investment will be necessary in order to achieve carbon neutrality by 2050, the International Monetary Fund (IMF) estimated in a publication on Monday, which judges that the private sector will have to take charge of 80% of financing. necessary in emerging countries to achieve this.
2,000 billion dollars of annual investment by 2030
According to chapter 3 of its annual report on global financial stability (GFSR), the entire content of which will be published on the occasion of the annual meetings of the IMF and the World Bank (WB), which will begin on October 9 in Marrakech, “the private sector will need to make a major contribution to the necessary climate investments in emerging and developing economies.”
Taking data recently published by theInternational Energy Agency (IEA), the Fund recalls that 2,000 billion dollars of annual investments by 2030 are necessary in order to achieve the objective of zero emissions in 2050, far from the 400 billion invested annually planned for the next seven years so far.
However, States, particularly emerging and developing ones, will not be able to cover these investment needs, unless they increase their already high debt, by 45 to 50% on average: “this is not fiscally sustainable “, said Ruud de Mooij, deputy director of the Fund’s budgetary affairs department, during an online press conference. “The good news is that 90% of the technologies we need to reduce emissions by 2030 already exist,” said Ruud de Mooij.
The private sector must take charge of 80% of investments
But in order to achieve this, the private sector must double its contribution, currently 40% of investments made, to bring it to 80%, insists the report. However, if certain emerging countries, like China or India, have a private sector with the necessary resources, this is not the case elsewhere, which implies creating the conditions to attract international investments, according to the IMF.
But these countries face difficulties, in particular “due to their rating, 40% of emerging countries are classified under the “investment” category, which means that they are not part of the investment universe”, he said. explained Fabio Natalucci, deputy director of the IMF. Furthermore, although the number of investment funds giving priority to sustainability has grown, this does not imply an increase in financing for needs linked to global warming.
“Only a small part of these funds wish to have a positive impact on the climate, the vast majority make their investments on social, corporate governance and environmental criteria which are not necessary in relation to climate challenges”, points out the report. “In some cases they are not as ‘green’ as the label suggests. It is therefore important to ensure that these labels reflect how ‘green’ the investments are for each of these funds”, underlined Fabio Natalucci .
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