$5 trillion annual green investment crucial for net zero, says IMF

As the world grapples with the urgent need to address climate change, the International Monetary Fund (IMF) has underscored the necessity of significantly increasing green investments.

In a recent blog post, IMF officials Simon Black, Florence Jaumotte, and Prasad Ananthakrishnan asserted that the path to achieving net zero emissions by 2050 requires annual green investments to escalate from USD 900 billion in 2020 to an ambitious USD 5 trillion by 2030. Their analysis particularly emphasized the requirement for emerging and developing countries (EMDEs) to secure USD 2 trillion annually, marking a fivefold increase from 2020 levels.

Even with the commitment of advanced economies to provide USD 100 billion annually, the IMF argues that the lion’s share of financing for these crucial low-carbon investments must come from the private sector. The blog pointed out that, eight years after the Paris Agreement, global policies are still insufficient to stabilize temperatures and avert the worst effects of climate change. The international community is falling short on essential fronts such as emission reduction, necessary investment, financing, and technology deployment.