The cooling market in developing economies is expected to grow from around USD 300 billion to at least USD 600 billion per year by 2050, according to a report released today by the Cool Coalition led by the United Nations Environment Programme (UNEP) and the International Finance Corporation (IFC).
The fastest growth in refrigeration is expected in Africa, where the market will increase sevenfold, and South Asia, which will quadruple in size.
The report concludes that sustainable cooling technologies can reduce cooling-related emissions by almost half by 2050 in developing economies. This requires:
Prioritize passive cooling strategies such as insulation, reflective materials, improved green areas and energy efficiency technologies.
Implement minimum energy performance standards and new building energy codes and a faster phase-out of climate-warming refrigerants.
A systematic approach to cold chains and large-scale cooling infrastructure services, and incentives to foster innovation. “The sustainable cooling market represents an opportunity of at least $600 billion for the private sector, which could generate more than $8 trillion in benefits for developing countries,” said Makhtar Diop, IFC Managing Director. “These nations are especially vulnerable to the deadly effects of rising temperatures and are in urgent need of cooling solutions. We are proud to present this report outlining the opportunity to invest in sustainable, affordable and scalable cooling solutions, with the goal of reaching near-zero emissions by 2050.”
The report highlights the need for significant upfront investments. Closing existing gaps in cooling access for households and SMEs in developing countries will require between $400 and $800 billion, on top of future increases in demand. “As temperatures continue to break records around the world, staying cool is an essential need for both healthy communities and a healthy environment. However, we must avoid creating a vicious cycle where cooling demands are met by solutions that further warm the planet,” said Inger Andersen, Executive Director of UNEP. “We need sustainable, affordable and energy-efficient cooling solutions that meet growing demand and support climate, health, food security and economic development. Governments, private companies and multilateral banks can use this report to leverage a wide range of financial instruments for sustainable cooling and resilience to extreme heat.”
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Key recommendations include improving data on cooling, capital costs and financing; increasing awareness; expanding the use of best practice business models and financing tools; increasing seed and high-risk financing for pilot technologies; leveraging blended and concessional financing; and leveraging the Global Cooling Commitment to create a Sustainable Cooling Financing Partnership.
The transition to sustainable cooling requires an enabling environment to make developing economies more attractive to investors. UNEP and IFC are committed to working with governments, businesses and other stakeholders to de-risk investments and ensure that sustainable cooling solutions are accessible to all, especially in low-income regions more prone to increasingly frequent heatwaves.