Published: October 25, 2022
According to a report by Standard Chartered, emerging markets like the UAE will require significant private investment if they are to achieve a just transition.
The UAE will require AED2.5 trillion (US$671.1bn) to finance its transition to net zero, a report by Standard Chartered has found. The report, titled Just in Time: Financing a just transition to net zero, highlights the need for private investors to make good on their COP26 pledges and fill the emerging market financing gap.
The report estimates that emerging markets as a whole will need to invest an extra AED350 trillion (US$94.8 trillion) – a sum higher than annual global GDP – if they are to meet long-term net zero targets. While emerging markets like the UAE could raise the money themselves, doing so would come at the cost of their prosperity and growth.
“There are several ways that markets could find thve funding necessary to transition to net zero, whether through grants, private investment, or taxation,” Rola Abu Manneh, Chief Executive Officer, UAE, tells EMEA Finance. “We looked at the two most extreme scenarios in our report, which are developed markets funding all the money or emerging markets exclusively self-funding.
If emerging markets raised the needed funds exclusively through taxes, households there would be around US$2 trillion poorer annually between 2021 and 2060.”