$8 Trillion Opportunity in Sustainable Cooling for Developing Economies: IFC and UNEP Report
By Gloria Sarauniya Usman
NEW YORK, 25 September 2024 — A newly released report by the UN Environment Programme (UNEP)-led Cool Coalition and the International Finance Corporation (IFC) projects a dramatic rise in the cooling market for developing economies, with annual growth expected to double from around $300 billion to at least $600 billion by 2050. The report identifies Africa and South Asia as the regions set for the most rapid expansion, with Africa’s market growing sevenfold and South Asia’s quadrupling.
Titled “Cooler Finance: Mobilizing Investment for the Developing World’s Sustainable Cooling Needs,” the report underscores the urgent need to focus on sustainable, energy-efficient cooling solutions to address the surge in demand. It warns that developing economies, which currently account for two-thirds of global cooling-related emissions, will see their demand for cooling double by 2050 due to population growth, urbanization, and economic expansion.
Sustainable cooling technologies are positioned as a critical solution, with the potential to reduce cooling-related emissions in developing countries by nearly half by mid-century. The report calls for immediate action, emphasizing strategies such as:
Prioritizing passive cooling solutions like insulation, reflective materials, and enhancing green spaces;
Implementing energy-efficient technologies and strict energy performance standards;
Developing large-scale cooling infrastructure and incentivizing innovation;
Phasing out harmful refrigerants that contribute to global warming.
Makhtar Diop, Managing Director of the IFC, highlighted the significant business opportunity in the sector, noting, “The sustainable cooling market represents a $600 billion annual opportunity for the private sector, with the potential to generate over $8 trillion in benefits for developing nations by 2050.”
He further emphasized the vulnerability of these regions to rising temperatures and the urgent need for scalable, low-emission cooling solutions.
The report also points to the need for substantial upfront investment, estimating that $400-800 billion is required to close existing gaps in cooling access for households and small businesses in developing economies. This figure will rise as future demand increases.
UNEP Executive Director Inger Andersen stressed the critical nature of the challenge, saying, “As the world experiences record-breaking temperatures, cooling is essential not only for public health but also for environmental sustainability. We must avoid meeting rising cooling demand with solutions that contribute to global warming. Sustainable, affordable, and energy-efficient technologies are key to supporting climate resilience, health, food security, and economic development.”
The report outlines several key recommendations, including improving data on cooling needs, enhancing awareness, expanding the use of best practice business models, and leveraging financial tools like blended and concessional finance. It also calls for the creation of a Sustainable Cooling Finance Partnership, building on the Global Cooling Pledge.
IFC and UNEP are committed to working with governments, businesses, and other stakeholders to create an investment-friendly environment that encourages the development and adoption of sustainable cooling technologies, particularly in low-income regions most vulnerable to extreme heat.
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