UNEP and IFC Report Projects Cooling Market in Developing Economies to Double by 2050

The cooling market in developing economies is set to expand significantly, growing from an estimated US$300 billion to at least US$600 billion annually by 2050, according to a report released today by the United Nations Environment Programme (UNEP)-led Cool Coalition and the International Finance Corporation (IFC). The report highlights that the fastest growth in cooling demand will occur in Africa, where the market is expected to expand sevenfold, and in South Asia, where it is forecast to quadruple.

The report, Cooler Finance: Mobilizing Investment for the Developing World’s Sustainable Cooling Needs, calls for prioritizing energy-efficient, environmentally friendly, and economically viable cooling solutions. Currently, developing economies contribute two-thirds of global cooling-related emissions, a figure expected to rise as population growth, economic development, and urbanization drive cooling demand to double by 2050.

Sustainable cooling technologies could halve cooling-related emissions in developing economies by 2050. The report emphasizes the need to prioritize passive cooling strategies, introduce stricter energy performance standards, phase out climate-warming refrigerants, and support innovation in refrigeration and cold chain infrastructure.

“The sustainable cooling market represents a private sector opportunity of at least $600 billion, generating over $8 trillion in benefits for developing countries,” said Makhtar Diop, Managing Director of IFC. “These nations face significant risks from rising temperatures, and this report outlines a critical investment opportunity to achieve near-zero emissions by 2050.”

The report highlights the need for significant upfront investments, with an estimated US$400 billion to US$800 billion required to address cooling gaps in households and small businesses in developing economies.

Inger Andersen, Executive Director of UNEP, stressed the urgency of finding sustainable solutions: “As temperatures continue to break records, cooling is essential for health and environmental preservation. We must avoid worsening the climate crisis with traditional cooling technologies and instead invest in sustainable, energy-efficient solutions.”

Key recommendations include improving data collection, expanding financing tools, and creating a global financing partnership for sustainable cooling to facilitate investments. UNEP and IFC are committed to working with governments and the private sector to reduce investment risks and ensure that sustainable cooling solutions reach vulnerable populations, especially in low-income regions prone to extreme heat.