Government commitments to reduce carbon emissions represent a huge opportunity for public and private investors. The World Bank’s International Finance Corporation projects a $23 trillion investment opportunity between now and 2030 in just 21 emerging market economies if these countries deliver on their national climate commitments made as part of the global climate agreement.
For example, as China continues to urbanize, the IFC estimates investments of $2.1 trillion in green buildings by 2020. In Jordan, the 117 megawatt, $290 million Tafila Wind Farm, is being followed by a dozen solar projects totaling 190 megawatts. The IFC expects more opportunities like Panama’s Penonome wind farm, a 215-megawatt plant that will be Central America’s biggest.
To increase the likelihood that private capital flows to such investments, countries must turn their climate commitments into policies and budgets, and be willing to use public funds to reduce the risk of private investments.