Developing economies stand to benefit from an $8 trillion opportunity through the adoption of sustainable cooling solutions, according to a new report from the International Finance Corporation (IFC) and the UN Environment Programme (UNEP)-led Cool Coalition on 25th September 2024, New York.
The report, titled Cooler Finance: Mobilizing Investment for the Developing World’s Sustainable Cooling Needs, highlights the immense market potential for sustainable cooling solutions, projecting growth from $300 billion to at least $600 billion per year by 2050.
Africa and South Asia are expected to experience the most rapid growth, with the market in Africa set to multiply sevenfold and South Asia quadrupling. The report stresses the urgent need for sustainable, energy-efficient cooling technologies in developing economies, which currently generate two-thirds of global cooling-related emissions.
By adopting sustainable cooling practices, these economies could reduce cooling-related emissions by nearly 50% and unlock savings of $8 trillion by 2050 in electricity costs, equipment expenditures, and power sector investments. “Sustainable cooling represents a $600 billion annual opportunity for the private sector, potentially generating over $8 trillion in benefits for developing countries,” said Makhtar Diop, Managing Director of IFC.
“These nations are especially vulnerable to the impacts of rising temperatures and urgently require scalable, affordable, and sustainable cooling solutions. “The report emphasizes passive cooling strategies, such as improved insulation, energy-efficient building designs, and environmentally friendly refrigerants. It also calls for enforcing energy performance standards and fostering innovation in cold chain systems and infrastructure services.
UNEP Executive Director Inger Andersen echoed the importance of sustainable cooling in light of record-breaking global temperatures. “Cooling is essential for healthy communities and ecosystems, but we must avoid exacerbating the climate crisis with outdated solutions. Sustainable, energy-efficient cooling can support not only climate goals but also health, food security, and economic development,” she said.
The report also highlights the need for substantial upfront investment to close the cooling access gap in developing countries, with an estimated requirement of $400 to $800 billion to meet current and future demand. The transition to sustainable cooling, it argues, will require strong collaboration between governments, businesses, and financial institutions to de-risk investments and make sustainable cooling accessible to all, especially in low-income regions.
IFC and UNEP are committed to supporting this transition, working with stakeholders to harness financial instruments that promote resilience to extreme heat and foster a sustainable cooling market globally.
About UNEP:
The United Nations Environment Programme is the global voice on environmental issues, fostering leadership and partnerships to promote sustainable development.
About IFC:
A member of the World Bank Group, IFC is the largest global development institution focused on the private sector in emerging markets, mobilizing private capital to reduce poverty and improve living standards.
About the Cool Coalition:
The UNEP-led Cool Coalition is a multi-stakeholder network aiming to accelerate the transition to sustainable cooling solutions worldwide, working with over 130 partners across 23 countries.
Read the full report here…
