LONDON, Oct 14 (Businesshala) – Emerging market economies need $1 trillion per year of public and private finance to transition to a low-carbon economy in the fight against climate change, said a report by asset manager BlackRock.
BlackRock said in a report that while the figure is a sharp increase on the United Nations’ goal of raising $100 billion annually, adding emerging markets was “essential” to ensure that the world is successful in limiting global warming.
The issue is expected to become a central point of discussion at the next round of global climate talks, due to begin in Glasgow on 31 October, urging all countries to accelerate their efforts to reach net-zero emissions by 2050. being done.
BlackRock said that to reach the target financing, public bodies would need to contribute $100 billion per year in grant-equivalent financing, which could be leveraged with additional public and private sector investments.
They had so far had only “limited success” in attracting private capital, despite multilateral institutions working for years to help prepare for and mitigate the effects of climate change.
The main barrier to investment was the additional risk involved in investing in emerging markets, including political, legal, regulatory and macroeconomic risks, it said.
To fix the problem, public investors will need to be willing to take on more risk and make up for potential losses.