Developing countries need private sector help. They can’t fight the climate crisis on their own | Sultan Ahmed Al Jaber and William Ruto

Wwithout urgent action to strengthen green jobs in developing economies, the collective action needed to win the fight against climate change will remain elusive. Developing countries face a number of socio-economic challenges, which force them to intensify spending. More people worldwide live in hunger, and 2 billion people do not have access to safely manage drinking water at home. More than 60% of low-income countries are in, or at high risk of, debt distress, while access to capital is limited and the cost of borrowing is prohibitive. This leaves minimal room for creating the debt and spending needed to finance climate action.

Green industrialization provides an opportunity for developing nations to achieve socio-economic transformation by combining environmental stewardship and economic progress. It provides a path for sustainable and inclusive growth and can address these structural challenges by improving access to energy, industrialization and diversification, and growing employment.

We have seen how climate policies such as the US Inflation Reduction Act and the European Net Zero Industry Act have unlocked capital to drive their green industrialization agenda. In its first year is the Inflation Reduction Act unlock capital, reduce emissions, create new jobs and transform the US economy. In the United Arab Emirates, we also launched the Green Economy for Sustainable Development initiative, which produced promising results.

As powerful as these national initiatives are, none of these programs will have the global impact needed to unlock sufficient funding and reduce emissions at the required rate. The world will not avoid the dangerous impacts of climate change without a significant increase in investment in developing countries. The Songwe Stern Report calls for an investment of more than $2.4tn per year, including a trillion in external financing for low-income and emerging markets in the global south.

While we have seen private and global capital markets increase investment in emerging and low-income countries over the past 20 years, these resources have not directly supported the green industrialization revolution. Investment must drive a new form of green economic growth and contribute to a green transition, driving the development of new industries, manufacturing and jobs.

Take electrification for example. Under a scenario of net zero by 2050, there will be continued demand for critical minerals such as copper, nickel and lithium, providing a unique opportunity for mineral-rich developing countries. Africa today has 40% of the critical minerals needed for the energy transition and thus green industrialization can contribute to long-term economic development, green jobs and facilitate trade and investment.

As world leaders, industry and civil society meet in Dubai for Police 28the agenda must address the private sector’s support for green industrialization and focus on three key areas.

First, developing countries must take tangible steps to design comprehensive green growth strategies that build on their comparative advantages. It must put human development and inclusivity at their heart, ensuring that these strategies have attractive and implementable policies that address the energy transition, while also protecting the livelihoods of those working in manufacturing and all other job-creating sectors.

Second, unlocking capital in the private sector by creating project-appropriate financial instruments, guarantees, instruments to reduce risks and working with philanthropy to identify and support investments is crucial. Complementing these investments by offering credit enhancements, blended financing or guarantees can also help attract the necessary equity financing, and will support innovation, technology transfer and opportunity creation.

Finally, reforming global financial architecture to include access to more sustainable finance is critical. Pension and sovereign wealth funds in emerging markets already provide long-term capital for investment, but more is needed. Credit rating agencies and other key organizations such as the Basel Committee on Banking Supervision, which provides a global forum to work on common banking standards and approaches, and the Glasgow Financial Alliance for Net Zero, which unites businesses to collaborate on decarbonisation efforts, should all work with financial institutions to support a more investor-friendly regulatory framework. This will enable transformational projects to be launched and attract private investment.

It will also ensure that countries do not face the climate battle burdened by debt, essentially with one hand tied behind their backs. Making adequate levels of finance available to all by unleashing the full power of the private sector will reignite collective global green industrialization and support, accelerating the pursuit of net zero and creating jobs and wealth.

This is the existential struggle of our generation. The challenge is too great and too important to fail.

The world must use all the tools at its disposal to fight for our shared planet. The question is whether leaders will have the foresight to make the investments before it is too late.

• Cop28: Can fossil fuel companies switch to clean energy?
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