MUMBAI : The report, titled “Climate Finance Needs of Nine G20 Emerging Market Economies: Well Within Reach” by the Centre for Social and Economic Progress, challenges the notion that emerging markets face “unaffordable” climate transition costs. It focuses on Argentina, Brazil, China, India, Indonesia, Mexico, Russia, South Africa, and Türkiye, nations that together account for 30% of global GDP, 47% of the population, and 30% of global carbon emissions.

According to the study, these economies will need an average of USD 255 billion per year between 2022 and 2030 to decarbonise key sectors like power, transport, steel, and cement, which produce nearly half of their total emissions. Excluding China, the financial requirement for the remaining eight economies drops to USD 854 billion, roughly 0.5% of their combined GDP.

The biggest funding needs lie in the steel (USD 1.2 trillion) and cement (USD 453 billion) sectors, where emissions are hardest to reduce due to limited technological alternatives. The road transport sector is estimated to need USD 459 billion, mainly for electric vehicle infrastructure, while the power sector will require USD 149 billion, the lowest among the four, thanks to falling renewable energy costs.

The analysis estimates that climate investments in power, steel, and cement could prevent 33 billion tonnes of carbon dioxide emissions by 2030 at an average cost of USD 53 per tonne. Authors Janak Raj and Rakesh Mohan argue that the transition is economically feasible and “well within reach,” provided there is access to cheaper financing and international cooperation.

However, the report warns that while the costs are manageable, many emerging economies may struggle to absorb large external capital inflows without destabilizing their economies. Multilateral development banks (MDBs) are expected to play a crucial role, yet their current contributions remain modest, just USD 12 billion in 2022, projected to rise to USD 34 billion by 2030, covering only 7–9% of total needs.

The authors urge MDBs to treat decarbonising heavy industries like steel and cement as “public goods” and attract private investment to scale up funding. The report comes ahead of COP30 in Belém, Brazil, where climate finance for developing nations is set to be a central issue.

Developing countries, including India, have long argued that climate finance from developed nations has fallen short of pledges, and that at least USD 1.3 trillion a year will be needed by 2035 to meet global climate goals.