Time to focus on climate funding

Discussions about climate finance often focus on the most vulnerable countries, such as small island developing states and for good reason.

- RAKESH MOHAN JANAK RAJ

But the nine major emerging-market economies (EMEs) - Argentina, Brazil, China, India, Indonesia, Mexico, Russia, South Africa, and Turkey also have significant climate-finance needs, which must be met if the world is to have any chance of achieving its climate goals. Nowhere are those needs larger than in China.

This is a key finding of our new study, which examined the climate-finance needs for the four highest-emitting sectors (power, steel, cement, and road transport) in the nine major EMEs for the period 2022-30. We estimate that China's climate-finance requirements for these sectors amount to some $1.3 trillion (42.1 trillion baht)61% of the total climate finance required by all nine EMEs ($2.2 trillion) implying an annual average of $155 billion. The steel sector has the highest need (55% of the total), followed by road transport (25%), cement (16%), and power (4%).

Start with steel. In 2022, China accounted for 77% of carbon dioxide emissions from steel production in the nine EMEs. We expect this share to decline to 66% by 2030, as slowing economic growth, falling investment in new infrastructure projects, and declining downstream demand cause China's annual steel output to drop from 1,020 million tonnes to 910 million tonnes.