Ex-World Bank official: emerging markets need trillions from net zero investors
Emerging markets around the world will need at least $1 trillion per year in fresh net zero investments in order to meet any of their climate goals.
That is the stark warning from a former World Bank official, who said that without the funds less developed countries will not be able to reduce their high carbon emissions.
Mari Elka Pangestu, a former World Bank managing director of development policy and partnerships, said that "the estimate is like $1 trillion to $3 trillion a year for developing countries to be able to transition."
The former Indonesian government minister told CNBC program 'Squawk Box Asia' that investors should cough up most of the funds needed in order to get these countries net zero-ready.
A lack of fresh funding, and a modest interest in net zero issues generally, have complicated and slowed the reduction of high carbon emissions and the rollout of clean energy models, Pangestu added.
"How do you transition from the high emission now to clean energy? It will require resources and investment."
As a result, friction and confrontation between developing nations and developed markets are increasingly emerging, she warned, as developed nations are pushing harder for progress on net zero.
"This debate is going to continue unless developed countries can see that this is about development and climate — not just about climate," Pangestu noted.
"And that has been the source of tension. You can not separate the two," she added, stressing that the "key word is actually, after all, transition."
This debate was "part of the bone of contention" for the lack of progress made at the recent G20 summit of climate ministers in India, Pangestu recalled.
Since there is no political consensus across the board, the focus should shift to investors to let them take their responsibility, as Pangestu this requires a "greater effort".
"There's a scale and urgency to address the climate crisis. Part of that will have to come from countries' own resources," she noted.
"It has has to come from multilateral development banks and other sources, which are going to reduce the cost and risks — so that you can get the private sector to come in," Pangestu concluded.
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