At the Bloomberg New Economy Forum in Singapore, the CEO of Macquarie Group, Shemara Wikramanayake, highlighted a crucial challenge for developing nations in regions like Southeast Asia. She pointed out that the prevalence of low-cost coal presents a significant obstacle in these areas, where governments are striving to balance climate goals with the pressing need for economic growth and job creation. Wikramanayake emphasized the reluctance of governments in these regions to impose carbon taxes due to their reliance on coal for a substantial part of their energy needs, making it politically challenging to increase the cost of obtaining basic energy.

She stressed the necessity of making alternative, clean energy sources more economically accessible, especially for those who currently cannot afford the transition. Wikramanayake proposed that reducing the cost of these alternatives is a crucial part of the solution to encourage their adoption.

Additionally, Mark Carney, chair and head of transition investing at Brookfield Asset Management, also emphasized the importance of increasing the flow of green capital into emerging countries. He highlighted the need for a significant scale-up in capital investment, from the current level of a few hundred million to a trillion in cross-border capital by the end of the decade.

It was noted that transitioning developing nations from coal-dependent energy systems to cleaner alternatives will demand substantial investments. There are existing financial mechanisms, such as Just Energy Transition Partnerships (JETPs), designed to channel funds from wealthier economies to major emitters in the developing world. However, the implementation of these mechanisms has been slow and entangled in political complexities.

Looking ahead to the 2023 United Nations Climate Change Conference in Dubai later this month, leaders will be pressed to devise a new framework that can effectively direct financial resources to emerging markets, as outlined by Carney.