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As the world faces rising emissions, the global net-zero transition has yet to begin, with annual emissions at an all-time high. While the EU and the US are making progress in decarbonization, their efforts are offset by rising emissions in emerging and developing market economies (EMDEs). With less than six years of carbon budget left to limit global temperature rise to close to 1.5°C, and with each extra 0.1°C increasing the risk of increasingly dire climate outcomes, the need for EMDEs to decarbonize rapidly is critical. The climate crisis, driven predominantly by fossil fuels, requires targeted climate finance to phase out fossil fuels and scale renewable energy in these economies.

This Bruegel event brought together leading climate policymakers to discuss the economic case for scaling up climate finance, with a primary focus on supporting decarbonization in EMDEs, while also addressing the need to strengthen domestic decarbonization efforts within the EU. As COP29 approaches, with a focus on setting a New Quantified Goal of Climate Finance, the event explored how climate finance is not only equitable but also economically beneficial for advanced countries. The discussion also considered how filling the international climate finance gap represents perhaps the biggest economic opportunity of the 21st century. The discussion drew on existing partnerships like those with South Africa, Indonesia, and Vietnam to evaluate how to implement expanding renewable energy and phasing out fossil fuels in EMDEs.