WASHINGTON: The private sector must drastically increase its climate-related investments, most crucially in developing countries, for the world to reach net zero carbon by 2050, the International Monetary Fund (IMF) said in a report published Monday.
To attain the 2050 goal, $2 trillion would need to be invested annually by 2030, according data from the International Energy Agency (IEA) cited in the report.
But this is far above the estimated $400 billion planned for the next seven years, the IMF said.
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The report warns that countries, especially ones with emerging or developing economies, will not be able to increase their debt levels by an average of 45-50 percent.
“We consider this as fiscally unsustainable,” Ruud de Mooij, deputy director of the IMF’s fiscal affairs department, said in an online press conference.
The good news, he said, is that 90 percent of the technologies needed to reduce emissions by 2030 already exist.
But to reach sufficient deployment, according to the report, private sector must double its contribution from 40 percent to 80 percent.
The report is part of the fund’s Global Financial Stability Report (GFSR), which will be released in full at the IMF and World Bank’s annual meetings, beginning October 9 in Marrakesh.
While some emerging countries, such as China and India, have a well-resourced private sector, this is not the case elsewhere, which means creating the conditions to attract international investment will be necessary, according to the IMF.
Fabio Natalucci, deputy director of the IMF, said more work had to be done to improve developing nations’ credit ratings.
He said that about 40 percent of emerging markets are rated sub-investment grade, meaning, for now, “they’re not part of the investable universe.”
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