According to the analysis, emerging economies as a whole will need to spend an extra $94.8 trillion to fulfil their long-term global warming objectives on time.
According to a recent study by Standard Chartered, India would need to spend $12.4 trillion to achieve net-zero long-term objectives by 2060. Furthermore, the report revealed that India’s household expenditure might decline by $5.8 trillion if the money it needs is self-funded.
However, if the money comes from outside the country, Indian family spending could rise by $7.9 trillion on the route to zero. According to the analysis, India would need to spend $8.5 trillion on electricity to meet its climate goals.
The government will need to invest $6 trillion in energy efficiency (including industry, transportation, and buildings). $573.3 billion in early scrappage and heating subsidies and $2.7 trillion in offsets (carbon tax, domestic heating tax, etc).
China’s transition funding shortfall is roughly $35.1 trillion, compared to India’s $12.4 trillion demand. Other emerging markets include Indonesia ($2.7 trillion), Nigeria ($283.3 billion), South Africa ($833.6 billion), Malaysia ($909.9 billion), Kenya ($413.6 billion), and the United Arab Emirates ($671.1 billion).
Emerging Country Markets
According to the analysis, developing economies themselves will need to spend an extra $94.8 trillion to reach long-term global warming objectives in time. It is in addition to the funds already set aside by nations as part of their current climate programs.
Household consumption in emerging economies might decline by 5% on average each year if they finance their transformation without the support of established markets. If emerging countries are to reach climate objectives without raising people’s living costs, they will require an extra $94.8 trillion — a figure more than the annual global GDP.
According to the report, emerging market self-financing would result in higher taxes and government borrowing, leaving some of the world’s poorest people having less money to spend on necessities. The average annual loss for households in these markets would be $2 trillion.
Between now and 2060, developing market family consumption might be lowered by $79.2 trillion. If developed markets pay for the shift, spending in emerging markets could rise by $1.7 trillion per year on average, which would boost global growth by $108.3 trillion between now and 2060.
“The stakes have never been higher for emerging countries if they attempt to move to net-zero. An Emerging market’s success might be delayed or reversed without assistance from established markets.
It would only be unfair, but also detrimental to the world economy as a whole, ” Bill Winters, Group Chief Executive of Standard Chartered, makes a point in a report. According to “Just in Time,” which investigates the transition finance gap for emerging markets and how to bridge it, developed market funding, in the form of grants and loans, will be critical to ensuring that emerging countries can transition without harming their growth or consumer spending.
This study looks at how to close the transition financing gap for emerging markets. According to the analysis, private investors can contribute $83 trillion of the needed $94.8 trillion, highlighting the critical need for financial institutions to fulfil green and transition financing promises.
Edited by Subbuthai Padma
Published by Iram Rizvi
