Rising global temperatures mean demand for cooling in homes, workplaces, and across supply chains is accelerating, particularly in developing economies where the impact of extreme heat is already being felt most acutely. Heat-related deaths are running at an annual average close to 500,000 globally, highlighting the urgency of boosting access to cooling. As well as averting fatal outcomes, ensuring populations have access to cooling – for human comfort as well as preserving perishable goods – means workers are more productive, farmers can deliver produce to market before it spoils and healthcare services can provide lifesaving vaccines. But more intensive use of refrigeration and air conditioning could trigger surges in energy demand, putting stress on power grids and potentially generating higher greenhouse gas emissions that fuel yet more warming. That means new cooling solutions must be sustainable, based on energy efficient technology and maximizing reliance on so called passive strategies, such as making use of shade, or building with reflective materials. These come at a cost, however, with passive design as well as new and efficient equipment for space cooling and refrigeration beyond the reach of many firms and households in developing countries. But effective interventions by governments, multilateral institutions, and donor organizations could make the financing and provision of sustainable cooling solutions in developing economies an attractive opportunity for private investors. A new analysis from IFC and the United Nations Environmental Programme (UNEP) finds that the market for sustainable cooling in developing economies is set to more than double over the next 25 years from around $300 billion in annual demand currently. That means the business opportunity for investors will amount to at least $600 billion in annual demand by 2050, most of which will be attributed to active cooling. The study also finds that adopting sustainable cooling solutions, as opposed to inefficient equipment that uses more power, could cut emerging economy consumers’ electricity bills by as much as $5.6 trillion over the next 25 years. It will also reduce the amount of new investment needed in additional power generation to meet peak electricity demand by $1.8 trillion.
Authors
- Citation
- “ International Finance Corporation . 2024 . Cooler Finance: Mobilizing Investment for the Developing World’s Sustainable Cooling Needs . © Washington, DC: World Bank . http://hdl.handle.net/10986/42208 License: CC BY-NC-SA 3.0 IGO . ”
- Collection(s)
- Other Environmental Study
- Identifier externaldocumentum
- 34395761
- Identifier internaldocumentum
- 34395761
- Pages
- 188
- Published in
- United States of America
- Region country
- World
- Report
- 193276
- Rights
- CC BY-NC-SA 3.0 IGO
- Rights Holder
- World Bank
- Rights URI
- https://creativecommons.org/licenses/by-nc-sa/3.0/igo
- UNIT
- IFC
- URI
- https://hdl.handle.net/10986/42208
- Volume
- 1
- date disclosure
- 2024-09-26
Files
Table of Contents
- _Hlk173837428 44
- _Int_Bdm9v1r9 80
- _Int_iZHjdJpX 142
- _Int_7gIoL24P 143
- _Int_PUSXnplZ 143
- _Int_WbkvwqQs 143
- _Int_k37FNcXW 144
- _Int_VKjI11jV 144
- _Int_FARUdB7B 144
- _Int_oTgiI2FM 144
- _Int_jcrO51W8 144
- _Int_4E4wkWaB 144
- _Int_TUpPudCR 145
- _Int_6GHdVyiT 146
- _Int_2lVyQZ38 146
- _Int_mqXAkOA3 146
- _Int_gXgxTbzK 146
- _Int_ZvO5tGNM 146
- _Int_2zIMkFcp 147
- _Int_nvLvrzxq 148
- _Int_C0WBgaeE 148
- _Int_6SSxVB3I 150
- Acknowledgements 4
- Abbreviations and Acronyms 6
- Foreword 8
- Executive Summary 10
- The Urgent Need For Sustainable Cooling Solutions in Developing Countries 17
- 1.1 Implementing Sustainable Cooling is Critical to Addressing Urgent Adaptation Needs and Meeting Sustainable Development Goals 23
- 1.2 The Importance of Financing Sustainable Cooling 28
- 1.3 How this Report Contributes to the Global Cooling Agenda 31
- Diverse Sources and Sectors Imply Diverse Cooling Financing Needs 37
- 2.1 Mapping the Investment and Financing Landscape for Cooling 38
- 2.2 Estimating the Cooling Market Size in Developing Economies 44
- 2.3 The Economic and Business Case for Accelerating the Adoption of Sustainable Cooling 50
- 2.4 Estimating Cooling Financing Gaps Across Developing Economies 56
- Challenges and Response Strategies for Promoting Sustainable Cooling 71
- 3.1 The Challenges to Private Investment in Sustainable Cooling in Developing Economies 72
- 3.2 Strategies for Addressing Challenges to Investment in Sustainable Cooling 83
- Financing Solutions and Innovations 105
- 4.1 From Cooling and Financing Needs to Business Models and Financial Instruments 106
- 4.2 Business Models Addressing Affordability and Financial Constraints 107
- 4.3 Program Design to Address Market Barriers to Sustainable Cooling Finance 113
- 4.4 Financing for Different Stages of Business Maturity 113
- 4.5 The Role of Concessional Funding to Support Sustainable Cooling 124
- 4.6 Financing Instruments for Sustainable Cooling 127
- 4.7 Development Finance Institutions as Key Mobilizers 137
- Conclusions and Recommendations 141
- 5.1 Conclusions 142
- 5.2 Recommendations 147
- Annexes 153
- Annex 1: Technical Description of the Global Cooling Emissions and Investment Model 154
- Annex 2: Methodology for Estimating the Total Cost to Close Cooling Gaps 167
- Bibliography 178
