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According to the International Monetary Fund (IMF), developing economies need to invest $1 trillion per year in renewable energy by 2030 to keep up with the goal of achieving net zero greenhouse gas emissions by 2050.
The IMF stated that developing and emerging economies are responsible for two-thirds global greenhouse gas emissions. These economies are also highly vulnerable to climate risks. It said that these countries would require significant climate financing over the next few years in order to reduce their carbon emissions and adapt to climate change. These economies could invest USD 1 trillion annually in renewable energy if they want to remain on track to reduce greenhouse gas emissions to zero by 2050. It also stated that the investment needed by developing countries to adapt their agriculture, infrastructure, and water supply to combat climate change will exceed USD 300 billion per year.
If efforts to reduce greenhouse gas emissions fail to meet the global temperature targets set out by the Paris Agreement then adaptation financing will be needed for emerging markets as well as developing economies.
It further said that estimates range from USD 520 billion to USD 1.75 trillion per year after 2050, depending on the emission pathway. The IMF released a report on Friday, ahead of the annual meeting of IMF and World Bank. It stated that emerging markets and developing countries will require significant climate financing in the coming years to reduce greenhouse gas emission (mitigation finance), and adapt to the physical effects of climate change.
In its report, the IMF stated that the IMF recommends a multi-pronged approach to scaling up climate finance in emerging markets. This includes support from multilateral development banks (MDBs), IMF and the public sector.