By Emily Chasan
Emerging economies investing in clean transport, agriculture
Cuba opened renewable research center as energy market grows
Emerging markets including Nigeria, China and India could be the best bets for investors hoping to fight climate change and boost returns, according to a report Thursday.
If the planet heats up by 5 degrees Celsius (9 degrees Fahrenheit), well above the 2-degree threshold set by the Paris Accord, investors may face $7 trillion in global losses. But that could be mitigated by investments aimed at reducing and removing carbon from the atmosphere, according to the report by Morgan Stanley’s Institute for Sustainable Investing and The Economist Intelligence Unit.
And Cuba, where the energy market is expected to see double-digit growth over the next five years, recently opened a renewable energy research and development center. India offers opportunities for clean transport because vehicle demand is expected to double by 2020, according to the report. Bloomberg New Energy Finance expects more than $4 trillion to be invested in renewable electricity generating capacity in Asia by 2040.
While energy tends to be the leading target for climate-change mitigation, the opportunities to curb emissions from agriculture are highest in China, India and Brazil, according to the Morgan Stanley report. The biggest opportunities for reducing transport-related emissions reductions are n the U.S., China, India, Brazil and Mexico.
Regulatory changes will also play a role in determining the industries investors can tap into to fight climate change. Countries like China and India can see renewable energy as a path to reduce poverty, create jobs and improve energy security and social stability, according to the report.
“China’s announced ban on gas and diesel powered cars is likely to change the game for the energy sector and automobile sector and the implications will be felt broadly,” Irby said. “They’re not the first country to make such an announcement, but they are so large that they are creating a significant new market opportunity through a policy decision specifically related to climate change mitigation.”