IMF：2023年10月《全球金融稳定报告》第三章：释放新兴市场和发展中经济体私人气候融资的金融部门政策（摘要）

CHAPTER

FINANCIALSECTORPOLICIESTOUNLOCKPRIVATECLIMATE

FINANCEINEMERGINGMARKETANDDEVELOPINGECONOMIES

3

Chapter3ataGlance

.TheInternationalEnergyAgencyprojectsclimatemitigationinvestmentneedstoincreaseto$2trillionperyearby2030inemergingmarketanddevelopingeconomies(EMDEs).Thiscorrespondsto12percentoftotalinvestmentinthesecountries,upsignificantlyfromthecurrent3percent.

.WeestimatethattheprivatesectorneedstocoverthemajorityofclimatemitigationinvestmentneedsinEMDEs—between80and90percentdependingonwhetherChinaisincluded—becausepublicinvest-mentgrowthisprojectedtobelimited.

.Yet,EMDEsfacesignificantchallengesinattractingprivatecapital.Manyhavesub–investment-gradecreditratings,limitingtheirpotentialinvestorbaseandresultinginhighfinancingcosts.Even

investment-grade-ratedEMDEsmayfinditdifficulttoattractclimateprivatefinanceduetoseveralbarriers.

.Thephasingoutofcoalisnecessarytoreachclimategoals,yetitischallengingasmanyEMDEshighlydependoncoal.Phasingoutcoal-firedpowerplantswillrequiresubstantialprivateinvestmentsandpublicsupport.

.Climatepoliciesandcommitmentsofmajorbanksandinsurancecompaniesarenotyetalignedwithnetzeroemissiontargets,curtailingthealignmentofprivatefinancialflowswiththeclimatetransition.

PolicyRecommendations

.AbroadmixofpoliciesisneededtocreateanattractiveenvironmentforprivatecapitalinEMDEs.

.Carbonpricingcanbehighlyeffectiveinshiftingcapitalflowstowardlow-carboninvestments,butpolicy-makersneedtocomplementitwithadditionalpoliciestounlockprivateclimatefinanceinEMDEs.

.Structuralpolicies,specificallythoseaimedatstrengtheningmacroeconomicfundamentals,deepening

financialmarkets,improvingpolicypredictability,andfosteringinstitutionalandgovernanceframeworks,arekeytoloweringthecostofcapital,mobilizingdomesticfinancialresources,andimprovingcreditrat-ingsinEMDEs.Strongclimatepoliciesandcommitmentscanhelpsendanimportantsignaltoinvestors.

.Appropriatepoliciesandinnovativefinancingstructuresforthecoalphaseoutneedtobetailoredtocoun-trycircumstances.

.Strengtheningtheclimateinformationarchitecture—data,disclosures,andalignmentapproaches(includ-ingtaxonomies)—isanimportantpartofthepolicymix.Investorsrelyonhigh-quality,reliable,and

comparabledata,whichmanyEMDEsstilllack.

.TransitiontaxonomiesinEMDEscouldbeavaluabletooltoalignincentivesandmobilizeprivatefinanc-ingincludingincarbon-intensivesectors.

.Disclosuresandlabelsforsustainableinvestmentfundsshouldenhancemarkettransparency,integrity,andalignmentwithclimateobjectivestoachieveclimateimpact.

.Expandeduseofguaranteesbymultilateraldevelopmentbanksanddonorscouldbeaneffectiveinstru-menttoreducerealandperceivedrisksinEMDEs.

.Blendedfinancestructurescouldimprovetherisk–rewardprofileofinvestmentopportunitiesandbroadentherangeofprivatesectorinvestors,therebyhelpingaddressrealandperceivedrisksinEMDEs.

.TheIMFResilienceandSustainabilityFacility,bysupportingreforms,canhelpcreateanenablinginvest-mentenvironmentandattractprivatecapital.

TheauthorsofthischapterareTorstenEhlers(co-lead),CharlotteGardes-Landolfini(co-lead),EkaterinaGratcheva,ShivaniSingh,HamidTabarraei,andYanzheXiao,undertheguidanceofPrasadAnanthakrishnanandFabioNatalucci.MarkusBrunnermeierwasanexpertadvisor.

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Introduction

Substantialinvestmentinlow-emissionstechnol-

ogiessuchasrenewableenergyisneededtoreduce

globalgreenhousegasemissionstonetzeroby2050.TheInternationalEnergyAgencyestimatesthat,bytheendof2030,climatemitigationinvestmentneedswillincreasetoabout$2trillionperyearinemergingmarketanddevelopingeconomies(EMDEs)—about40percentofglobalinvestmentneeds(seeOnline

Annex3.7foralistofcountries).Thisestimate

impliesthatclimatemitigationinvestmentswill

havetoclimbto12percentoftotalinvestmentsinEMDEsby2030—asignificantincreasefromthecurrent3percent.

Theprivatesectorwillhavetoplayakeyrolein

financingclimatemitigationinvestmentsinEMDEs,givenlimitedfiscalspaceamidchallengingmarket

conditions.Ourestimatessuggestthattheshareof

privatefinancemustincreasesignificantly.1By2030,privatefinancewillhavetocoverabout80percentoftheclimatemitigationinvestmentneedsinEMDEs.ExcludingChina,theprivatefinancingshareisevenhigher—about90percent.

Becausemorethanhalfofglobalgreenhousegasemissionscomesfrommajoremergingmarkets,theyneedsignificantmitigationinvestments.Butthese

countrieshavemarketaccessand,sometimes,deep

domesticcapitalmarkets.Developingeconomiescon-tributelessthan15percenttoglobalgreenhousegasemissions.Theyhavefewerclimatemitigationinvest-mentneeds,butlessaccesstoglobalmarketsandlessabilitytoattractprivatecapital,astheirfinancialandcapitalmarketsarelessdeveloped.

ClimateinvestmentflowshavebeenincreasingbothgloballyandinEMDEsbutremainlimited(Naran

andothers2022).Despiteaproliferationofsupportivefinancialsectorpoliciesandclimatecommitmentsbyfinancialinstitutions,asubstantiveshiftinfinancingflowsfromhigh-tolow-emissionsassets,inparticularinEMDEs,hasstillnotmaterialized.

ManyEMDEsfacefundamentalchallengesin

attractingprivatesectorcapital—evenbeforeconsid-

1Theterm“privatefinance”referstofinancialflowsnotrelatedtothepublicsector.Publicsectorsourcesarepublicinstitutionssuchasgovernments(alllevels),multilateraldevelopmentbanks,nationaldevelopmentbanks,state-ownedbanks,andother

state-ownedentities.

eringbarriersspecificallyrelatedtoclimatefinance.

About40percentofemergingmarketeconomies

andnearlyalldevelopingeconomiesdonotreach

aninvestment-graderatingorhavenoratingatall.

Asaresult,mostlargeinstitutionalinvestorsdonotinvestinthesecountries.InsomeEMDEs,high

politicalrisks,legalandinstitutionaluncertainty,

andimplementationrisksarehurdlesthataddtothealready-highfinancingcosts.Inaddition,thelackofwell-structured,investableclimateprojectpipelinesisoftenanobstacletothedeploymentofprivatecapital.Furthermore,EMDEsstilllackhigh-quality,reliable,andcomparableclimate-relateddata,makingthe

assessmentofrisksandopportunitiesmorecomplexforprivateinvestors.

GiventhepoliticalhurdlesofimplementingcarbonpricingandEMDE-specificchallenges,abroadmixofpoliciesisneededtocreateanattractiveinvestmentenvironmentforprivatecapitaltosupportclimate

financeneedsinEMDEs.Carbonpricing,aswellasthereformoffossilfuelsubsidies,canbehighlyeffec-tiveinshiftingprivatecapitalflowstolow-emissionsinvestmentsbyprovidingastrongandcredible

pricesignaltoinvestors.Butcarbonpricingmaybepoliticallychallengingtoimplementandshouldbecomplementedwithotherpolicies(seeChapter1intheOctober2023FiscalMonitor).FurtherstructuralpoliciesareneededinEMDEstomobilizedomesticandinternationalprivateclimatefinance,includingstructuralreforms,strongclimatepoliciesandcom-mitments,well-designedsubsidieswherefiscalspaceallows,andinnovativefinancingapproachestophas-ingoutcoal.

Astrongerclimateinformationarchitecture—data,disclosures,andalignmentapproaches(includingtax-onomies)—isnecessarytoattractprivateinvestorsinEMDEs.High-quality,reliable,andcomparabledataareaprerequisitetoassessandpricerisksandoppor-tunitiesandthusmakeinformedinvestmentdecisions.Aweakclimateinformationarchitectureincreasesthe

risksof“greenwashing”(investmentswronglymarketedorclassifiedasclimate-beneficial)andreducesmarkettransparency.

Financialsectorpoliciesshouldrefocuson

fosteringclimateimpact(suchasareductionin

greenhousegasemissions)tohelpmobilizeprivateclimatefinancewhileconsideringEMDE-specificrequirements.Currentfinancialsectorpoliciesoften

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CHAPTER3FINANCIALSECTORPOLICIESTOUNLOCkPRIvATECLIMATEFINANCEINEMERGINGMARkETANddEvELOPINGECONOMIES

focusonidentifyingactivitiesandassetsthatare

already“green.”TransitiontaxonomiesinEMDEs

couldhelpidentifyactivitiesthatcouldbetteralignincentivesandsignificantlyreduceemissionsover

time,includinginthemostcarbon-intensivesec-

tors.2Transitiontaxonomiesandotherclimatealign-menttoolsshouldintegratemeasuresforamanagedphaseoutofcoal-firedpowerplants,giventheneedtoleverageprivatefinance.Disclosuresandlabelsforsustainableinvestmentfundsshouldenhancemarkettransparency,marketintegrity,andalignmentwithclimateobjectivestofosterpositiveoutcomesfor

climateimpact.Climateimpactscoresshouldbeconstructedtobetteralignclimateoutcomeswithinvestorexpectationsonclimateimpacts.

Public–privaterisksharing,includingthrough

enhancingthefinancialcapacityandoperatingmodelofmultilateraldevelopmentbanks(MDBs),iscrucialtoattractmoreprivatecapitalinEMDEs.InnovativefinancinginstrumentscanhelpovercometherealandperceivedhurdlestoprivateinvestmentinEMDEs.Blendedfinance,includingtheenhanceduseof

MDBs’anddonors’guarantees,cangreatlyhelpto

achievederiskingandbroadentheinvestorbaseif

designedwellandusedappropriately.Inlow-incomecountries,largerinternationalpublicsupportisessen-tialgiventhesteepchallengesinattractingprivate

climatefinance.

TheIMFResilienceandSustainabilityFacility

(RSF)canhelpcatalyzeprivatecapitalbyenhanc-ingacountry’scapacityforclimateinvestments

withacombinationofpolicyreforms,capacity

development,andlonger-termfinancing.Throughitsconveningpower,theIMFcanbringtogether

governments,MDBs,andtheprivatesectortofosterthefinancingofmuch-neededclimateinvestments.TheIMFcanhelpstrengthenpublicfinancialandclimateinvestmentmanagementtosupportthe

developmentofapipelineofinvestableprojects

andprovidecapacitydevelopmenttosupportthecollectionofhigh-quality,reliable,andcomparableclimate-relateddata.

2Transitiontaxonomiesaimtoidentifythetypesofactivities,underlyingtechnologies,andindustrialprocessesthathavethepotentialforsubstantialreductioningreenhousegasemissions,allowingforacommonunderstandingofinvestmentscondu-civetoaParis-alignedtransition.Theydifferfrom,say,greenbondtaxonomies,whichtypicallyidentifytechnologiesthatarealreadylowcarbon.

TheCrucialRoleofPrivateFinance

Largevolumesofclimatemitigationinvestment

areneededby2030(Figure3.1,panel1).Toachieve

netzerogreenhousegasemissionsby2050,globalgrossclimatemitigationinvestmentwillneedtoreachabout$5trillionannuallyby2030.3Althoughtherearenota-bleuncertaintiesaroundtheseestimates,themostwidelyusedprojectionssuggestthatabout60to70percentofinvestmentneedsareintheenergysector.

ClimatemitigationinvestmentneedsinEMDEs

areprojectedtoincreaseto$2trillionby2030,which

representsabout40percentofglobalmitigationinvest-mentneeds.Thistranslatestoabout12percentoftotal

investmentsinEMDEsin2030,afourfoldincreasefromthecurrentshareofabout3percent(Figure3.1,panel2).

Privatecapitaliskeyforfinancingclimateinvest-

mentneeds,bothgloballyandinEMDEs.Judging

fromtheIMF’scountry-by-countrygrossinvestmentprojections,thegrowthintotalpublicinvestment

willnotcovertheincreasingclimateinvestmentneedsby2030.Privatecapitalwouldhavetoaccountforamuchlargershareofclimateinvestmentneedsthanthecurrent40percentinEMDEs(Figure3.1,panel3).4Inascenarioinwhichtheshareofclimateinvestmentsintotalpublicinvestmentincreasesbyafactorof1.5fromcurrentlevels,theprivatesectorwouldhave

tocover80percentofclimateinvestmentneedsinEMDEsby2030(seeOnlineAnnex3.2fordetails).WhenChinaisexcluded,itismorethan90per-

cent.Chinahasampledomesticfinancialresources,andthepublicsectorhasplayedasignificantroleinfundingclimateinvestmentneeds,includingthroughstate-ownedentities.

Climatemitigation,however,isonlyonepartofthechallenge.Adaptationfinanceisalsoimportant,becauseEMDEsneedtobuildresilienceagainst

thefuturephysicaleffectsofclimatechangeandcompensateforeconomicandsocialconsequences.

3ThisprojectionreferstogrossinvestmentneedsasestimatedbytheInternationalEnergyAgency.Allprojectedinvestmentneedsreportedinthischapterareadjustedforinflationandareexpressedin2020USdol-lars.Alargeshareofclimatemitigationinvestmentsisexpectedtocomefromareallocationofinvestmentwitharelativelysmallnetincreaseininvestmentataround1percentofGDP(seeIMF2021).Theestimateincludesinvestmentsduetoincreasingenergydemanddriven,for

instance,byeconomicdevelopment.SeeOnlineAnnex3.1fordetails.

4Theprivatesectorshareofclimatefinanceiscalculatedastheresidualofclimateinvestmentneedsnotcoveredbythepublicsector.Grosspublicsectorinvestmentin2030isbasedonIMFprojections.SeeOnlineAnnex3.2fordetails.

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Figure3.1.EstimatedClimateInvestmentNeedsandtheKeyRoleofPrivateFinance

Globalclimateinvestmentneedsare

estimatedtoincreasetoabout$5trillionperannumby2030.

1.AnnualMitigationFinancingNeedsby2030toAchieveNetZeroby2050

(TrillionsofUSdollarsperannum)

Electricitysystem

Energyefficiency

Negativeemission

Others

Global:IEA

Global:IRENA

EMDEs:IEA

0123

ClimatemitigationinvestmentsinEMDEsneedtoincreaseto12percentoftheirtotalinvestments...

2.EMDEsClimateMitigationInvestmentNeeds:Currentversus2030

(PercentoftotalEMDEinvestment)

Otherinvestment

Climateinvestment

Current(2020)

Estimated

2030total

Estimated2030climateinvestmentneeds:US$2.0

investment:

US$0.4trillion

trillion

investment:

US$17trillion

12%

3.4%

Current(2020)

investment:

US$10trillion

97%

88%

...withprivatefinancehavingtocoveramajorshareofclimatemitigationinvestments.

3.ThePrivateFinancingShareinEMDE

ClimateInvestments:Currentversus2030

(Percent)

CurrentshareofprivateclimatefinanceRequiredshareofprivatesectorby2030

+45pp

+40pp

EMDEsEMDEsexcludingChina

100

90

80

70

60

50

40

30

Sources:ClimatePolicyInitiative;InternationalEnergyAgency2021,2023a;InternationalRenewableEnergyAgency2023;andIMFstaffcalculations.

Note:Amountsinpanels1and2areinflationadjusted.Inpanel1,investmentneedsrefertoanetzerogreenhousegasemissionsby2050scenario.Inpanel3,themaximum(minimum)rangereferstoascenariowheretheclimateshareofpublicinvestmentsstaysthesame(doubles)asthecurrentlevel.Thepointestimateisbasedonapublicclimatefinancingsharethatincreasesbyafactorof1.5until2030.SeeOnlineAnnexes3.1and3.2fordetails.EMDEs=emergingmarketanddevelopingeconomies;IEA=InternationalEnergyAgency;IRENA=InternationalRenewableEnergyAgency.

Thisisespeciallythecaseindevelopingeconomies,

whichareoftenstronglyaffectedbyclimatechange

butmaynothavethenecessarycapacitytoadapt.

Althoughcurrentadaptationinvestmentsaresmall

relativetomitigationinvestmentneeds,theymaygrowsignificantlyifclimatemitigationeffortsfallshortandclimatehazardsintensify(seeChapter2oftheOctober2022GlobalFinancialStabilityReport).

BarrierstoDeployingPrivateClimate

FinanceinEMDEs

Amajorconstrainttoattractingprivateinvestmentisthelackofaninvestment-gradesovereigncreditratingformanyEMDEs.Onlyabout60percentofemergingmarketsandamere8percentofdevelopingeconomieshaveaninvestment-graderating.5Thesovereignratingalsoservesasabenchmarkforthecreditratingofprivateentities(the“ratingceiling”).Thedistinctionbetween

instrumentsrated“investmentgrade”versusthoserated“belowinvestmentgrade”isofutmostsignificancein

5Amongdevelopingeconomies,58percenthavearatingbelowinvestmentgrade,and34percenthavenosovereignratingatall.SeeOnlineAnnex3.3.

internationalcapitalmarkets,effectivelydeterminingthepotentialinvestorbase.Manyfiduciariesdefinetheirsoleeligibleinvestmentsasthoserated“investmentgrade.”Variousbankingandinsuranceregulationsdiscourage,ifnotprohibit,regulatedentitiesfromholdingnon–

investment-gradeinvestments.

Currentmethodologiesofcreditratingagenciesdonotrewardmiddle-andlower-incomecountriesthatimplementbetterclimatepolicies.Climate-related

policiesarehighlyrelevantforthelong-termabilityofsovereignstoservicetheirdebt.Yet,middle-andlow-incomecountriesdonotbenefitfromeffective

energytransitionpoliciesintermsofimprovedcreditratingsoroutlooks,despitecreditratingagencies

claimingtoconsidercredit-materialenvironmental,social,andgovernance(ESG)factorsintheirratings(Box3.1).Aslongasthispracticepersists,thepoten-tialbenefitsofclimateinvestmentsforcreditratingsandtherebyfinancingcostsarelimited.

SupplyofcapitaltoEMDEsisstronglydrivenby

capitalallocationdecisionsofglobalfinancialinstitu-

tions,andallocationstoEMDEsaresignificantlybelowtheircontributiontoglobalGDPortheirgrowthpoten-tial.Mostlargeinstitutionsappeartouse“top-down”

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CHAPTER3FINANCIALSECTORPOLICIESTOUNLOCkPRIvATECLIMATEFINANCEINEMERGINGMARkETANddEvELOPINGECONOMIES

allocationmodelsbasedonhistoricaldata.Several

largeinvestmentinstitutionsavoidEMDEsaltogether.Marketparticipantssuggestthatinvestorsareconcerned,amongotherthings,about(1)theperceivedrisk–returnprofilesofinvestmentsinEMDEsnotbeinginline

withinstitutionalinvestors’riskbearingcapacity;(2)

difficultiesinnavigatingEMDEs’perceivedcomplex-

ities;(3)reputationalriskofinvestinginmarketswithinadequategovernance,poorinstitutionalcapacity,andanuncertainpolicyenvironment;and(4)inparticularforclimatefinance,increasinglystringentESGregula-tionsinadvancedeconomies,whichraisecompliance

risksandcostsforEMDEinvestments.MorespecializedfirmsactivelyseekingEMDEinvestmentstypicallytakeadvantageofinformationalasymmetriestoidentifyqual-ityinvestmentopportunities.AlthoughtheseinvestorsunderstandthefullcomplexityofEMDEsandinvest

resourcesintoactivelydevelopingthesecapabilities,theirscaleisstilllimited.

InvestorswhoseekEMDEinvestmentopportuni-

tiesciteseveralconstraintstodeployingtheircapi-

tal.EMDEslackwell-structured,investableproject

pipelinesinlocalmarketsthatmeettherisk–return

requirementsofprivateinvestors.Thebankableprojectsinlower-incomecountriesaredrivenprimarilyby

MDBsandtheirownbalancesheetdeployment,withlimitedparticipationfromtheprivatesector.Project

implementationinEMDEsoftenfacesslowdisburse-ments,regulatorychanges,andtypicallylongtimelineswellbeyondthoserequiredintheprivatesector.Typicalprojectsaresmall,apartfromsomelargeinfrastructureprojects.Thedearthofpooledinvestmentsatscaleleadstohighduediligencecostsandlackofdiversification,foilingparticipationofglobalinstitutionalinvestors.

ProjectexecutioninEMDEsisfurthercompli-

catedbylowdomesticcapitalmarketdevelopment.

Lower-andlower-middle-incomecountriesdonothaveestablishedormaturecapitalmarkets.6Lowfinan-

cialandcapitalmarketdevelopmentlimitsdomestic

resourcemobilizationanddetersinternationalinvestors.Inaddition,evenEMDEswithmoredevelopedcapitalmarketsmayhavecomplexoperatingenvironmentssuchaswithholdingtaxes,localregulatoryrestrictions,and

potentialcurrencyrepatriationrestrictions.

6Seeforinstance,theIMFFinancialDevelopmentIndexDatabase,whichsummarizeshowdevelopedacountry’sfinancialmarketsand

institutionsareintermsofdepth(sizeandliquidity),access(abilityofindividualsandcompaniestoaccessfinancialservices),andefficiency(abilityofinstitutionstoprovidefinancialservicesatlowcostandwithsustainablerevenuesandlevelofactivityofcapitalmarkets).

Challengesinmanagingforeignexchangeriskareoftencitedasimpedimentstomeaningfullyscaling

upprivateclimatefinanceinEMDEs.Theman-

agementofforeignexchangeriskischallengingfor

climatefinanceinEMDEs,soinvestorsresorttocli-mateinvestmentswithlimitedornoforeignexchangeriskexposure.Foreignexchangeriskcanthushindercross-borderinvestmentflowsandlocaldebtmarketdevelopment.Commercialhedgingoptionsexist,

primarilyinlargerEMDEs,buttendtobeexpensive,withlimitedliquidity,andincomplete,especially

atthetenorandsizeneededtosupportlarge-scale,

long-termprojects.Markethedgingoptionsare

virtuallynonexistentinsmalleremergingmarketsandlow-incomecountries.

PotentialLimitstotheSpeedoftheEnergyTransitioninEMDEs

Inadditiontobroadbarrierstoprivatecapital,

EMDEsfaceseveralhurdlesspecifictothetransitiontorenewableenergywhilephasingoutfossilfuels.

Renewableenergyproductionanddistributionhas

highupfrontfixedcapitalcosts(forexample,solar

panelsandelectricitygridswithenergystoragecapac-ity),whereassubsequentmarginalcoststendtobe

lower.Renewableenergyprojectstypicallycarrysig-nificantpolicyrisks,especiallyinEMDEs—ariskthatcompaniesstruggletopriceandmanagecompared

toconventionalmarketrisks.Toimplementthese

projects,anumberofissuesneedtobeaddressed,

suchasprerequisiteinfrastructures,intermittencyofrenewablesandstoragecapacity,supplychainissues,permits(ofteninmultiplejurisdictionsorinvolv-

ingmultipleregulations),andintegrationintothe

electricitydistributionnetwork.DuetoacombinationofpolicyuncertaintyandriskpremiumforEMDEs,renewableenergyinEMDEsisfinanciallylessattrac-tivethaninadvancedeconomies.Insomemajor

emergingmarkets,highborrowingcostsmorethandoublethecostofrenewableelectricityproduction.7

7ArecentreportbytheInternationalEnergyAgency(2023a)

states,“Forthemoment,thecostofcapitalforatypicalutility-scalesolarprojectcanbetwoorthreetimeshigherinkeyemerging

economiesthaninadvancedeconomiesorChina,reflectingrealandperceivedrisksatthecountry,sectoralandprojectlevels.Tacklingtheserisksandbringingdownthecostofcapitalwillrequirenew

andbetterwaysofworkingbetweenthepublicandprivatesectors.”SeealsotheInternationalEnergyAgencyCostofCapitalObserva-

tory(/reports/cost-of-capital-observatory/tools

-and-analysis#abstract

).

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Historicaldata

Net-zero-emissionsscenario(2021–40)

GLOBALFINANCIALSTABILITYREPORT

Figure3.2.RenewableEnergyInvestmentinEMDEsandLithiumPriceProjections

...whileexpectedincreasesinthepricesofcriticalmetalssuchaslithiumcouldslowtherenewableenergytransition.

2.LithiumPricesinaNetZeroScenario

(Thousandsof2020USdollarsametricton)

RenewableenergyinvestmentinEMDEs(excludingChina)isstill

laggingbehindfossilfuels...

1.RenewableEnergyversusFossilFuelInvestment

(Ratio)

1.00.90.80.70.60.50.40.30.2

0.1

Renewables/totalfossilfuel:global

Renewables/totalfossilfuel:EMDEsexcludingChina Renewables/totalfossilfuel:EMDEsincludingChina

0.0

2015161718192021222319708090200010203040

25

20

15

10

5

0

Sources:Boer,Pescatori,andStuermer2023;InternationalEnergyAgency2023b;andIMFstaffcalculations.

Note:Bandsinpanel2showtheconfidenceintervalaroundpriceestimate.SeeBoer,Pescatori,andStuermer2023.EMDEs=emergingmarketanddevelopingeconomies.

Despiterecentimprovements,investmentinrenew-ableenergyinEMDEs(exceptforChina)stilllags

behindinvestmentsinfossilfuel(Figure3.2,panel1).Estimatessuggestthatatargetratioofabout4:1forrenewableoverfossilfuelinvestmentisrequiredglob-allythroughoutthisdecade(BloombergNEF2022).Inaddition,totalfossilfuelsubsidieshavesurgedtoarecordhighin2022andareexpectedtoincrease

furtherinEMDEs(IMF2023).

Atthesametime,actionstakenbyadvanced

economiescouldslowtherenewableenergytransitioninEMDEs.Asadvancedeconomiesacceleratetheir

energytransition,thesupplyofcriticalmetalsand

mineralsisprojectedtofallshortofdemand,puttingupwardpressureontheirpricesandfurtherraisingthecostsofrenewableenergy(Figure3.2,panel2).

Aphaseoutofcoalisnecessarytoreachclimate

goals,consideringthatcoal-basedenergyproductionisthesinglelargestsourceofgreenhousegasemissionsglobally(about20percent).Amidasurgeincoal-firedpowercapacitysince2000,EMDEsnowaccountforthree-fourthsoftheworld’s9,000coal-firedpower

plantsandabout90percentoftheglobalcapital

tiedincoal-firedpowerplants(WorldBank2023).However,onlyabout20percentofcurrentcoal-firedgenerationiscoveredbyagreementsamongcountries

tophaseoutcoalorstopdevelopingnewpower

plants(InternationalEnerg