Unlocking climate finance for emerging and developing economies will require more than pledges

The document highlights a significant gap in clean energy investment for emerging and developing economies (EMDEs), noting that only 15% of global investment reaches these regions (excluding China). It identifies the primary barrier as an elevated cost of capital—often two to three times higher than in OECD countries—driven by risks such as currency exchange, regulatory uncertainty, and asset expropriation. In Africa, the weighted average cost of capital for power sector projects is 15.6%, making decarbonization prohibitively expensive. The authors argue that COP29 must move beyond pledges toward granular, data-driven plans and bottom-up actions that improve local infrastructure and market performance to make EMDEs more attractive to risk-averse private capital.

• Clean energy investment is heavily skewed away from emerging and developing economies (EMDEs), with only 15% of global investment flowing to these regions, excluding China, despite them housing 66% of the world's population.
• The cost of capital in EMDEs is typically two to three times higher than in OECD countries due to factors including currency exchange risk, project completion concerns, lack of regulatory certainty, contract enforcement risks, and asset expropriation risks.
• In Africa, the weighted average cost of capital for power sector projects is 15.6%, which the authors describe as alarming and a barrier to prioritizing decarbonization for nations lacking fundamental energy infrastructure.

APA

Spokas, K., Odarno, L., & Waltzer, K. (2024). Unlocking climate finance for emerging and developing economies will require more than pledges. Clean Air Task Force. https://www.catf.us/2024/11/unlocking-climate-finance-emerging-developing-economies-will-require-more-than-pledges/

Chicago

Spokas, Kasparas, Lily Odarno, and Kurt Waltzer. Unlocking climate finance for emerging and developing economies will require more than pledges. Clean Air Task Force, 2024. https://www.catf.us/2024/11/unlocking-climate-finance-emerging-developing-economies-will-require-more-than-pledges/.

Wikipedia

{{cite press release |last1=Spokas |first1=Kasparas |last2=Odarno |first2=Lily |last3=Waltzer |first3=Kurt |title=Unlocking climate finance for emerging and developing economies will require more than pledges |publisher=Clean Air Task Force |date=8 November 2024 |url=https://www.catf.us/2024/11/unlocking-climate-finance-emerging-developing-economies-will-require-more-than-pledges/ |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@misc{spokas2024unlocking, author = {Spokas, Kasparas and Odarno, Lily and Waltzer, Kurt}, title = {{Unlocking climate finance for emerging and developing economies will require more than pledges}}, publisher = {Clean Air Task Force}, year = {2024}, month = nov, url = {https://www.catf.us/2024/11/unlocking-climate-finance-emerging-developing-economies-will-require-more-than-pledges/}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }