Achieving net-zero emissions by 2050 while also sequestering existing CO2 in the atmosphere necessitates a significant increase in low-carbon investments, soaring from $900 billion in 2020 to an annual conservative total of $5 trillion by 2030. Notably, emerging and developing countries (EMDEs) must secure $2 trillion per year, marking a fivefold surge compared to 2020. Increased energy demands globally will require a complete re-imagining of the energy landscape and a shift from the dominating fossil fuel investments to clean tech investments.

Climate finance assumes a critical role in aiding developing nations, which bear a disproportionate share of the climate change impact. A recent report released on December 4th from COP28, underscores the need for emerging markets and developing countries to attract annual investments of $2.4 trillion to mitigate emissions and adapt to climate change.

Although many were encouraged by the financial commitments in the initial week of COP28. This surge in funds directed at addressing climate change seems to resemble more of a trickle. As an example, eight donor governments have unveiled fresh contributions totaling only $174.2 million for the Least Developed Countries Fund and Special Climate Change Fund. Furthermore, the Adaptation Fund has garnered nearly $160 million in new pledges at COP28 far short of what is needed to assist the most climate-vulnerable regions, while pledges exceeding $650 million have been made for the Loss and Damage Fund they in no way match the need.

For investors even though significant more funds are targeted toward future fossil fuel development you stand to do better by investing in clean tech. Global oil demand is projected to slow down in the long term, rising annually by only 0.4 mbpd until 2027, compared to 1.6 mbpd until 2023. Meanwhile global biofuels and hydrogen fuel demand is projected to rise by 44% between 2022 and 2027 as it increasingly substitutes for petroleum-based products.

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