Cooler Finance: Investing in Sustainable Cooling for a Warming World

The Cooler Finance: Mobilizing Investment for the Developing World’s Sustainable Cooling Needs report underscores the growing importance of sustainable cooling in a rapidly warming world. With billions of people facing the risks of extreme heat, food spoilage, and inadequate healthcare, sustainable cooling is not only an environmental necessity but also a business opportunity. By bridging the financing gaps and adopting innovative cooling technologies, developing countries can safeguard the health of their populations while contributing to global climate goals.

As the world grapples with the escalating impacts of climate change, the need for sustainable cooling solutions is becoming ever more critical. In developing countries, where temperatures are soaring and economic resources are often limited, access to adequate cooling is not just a matter of comfort but survival. The report is titled Cooler Finance: Mobilizing Investment for the Developing World’s Sustainable Cooling Needs, published in September 2024. This report was developed through a collaboration between the International Finance Corporation (IFC) and the United Nations Environment Programme (UNEP), led by the Cool Coalition. The report highlights the growing importance of addressing these needs while balancing the challenge of reducing global emissions. With the cooling market expected to grow to over $600 billion annually by 2050, the report outlines the challenges and opportunities for sustainable cooling in developing economies.

The Urgent Need for Sustainable Cooling

Across the developing world, the lack of sustainable cooling poses serious risks to human health, productivity, and food security. As global temperatures rise, millions are exposed to extreme heat without air conditioning or refrigeration access. This not only impacts people’s ability to work but also leads to spoilage of vital food supplies and vaccines. The Cooler Finance report notes that approximately one-third of the world’s food production is lost due to inadequate cold storage and transportation, a problem that disproportionately affects developing countries.

Cooling, however, comes with its own set of challenges. Increased use of conventional air conditioning and refrigeration significantly contributes to greenhouse gas emissions, especially in countries where energy comes from fossil fuels. Developing economies, which already account for two-thirds of global cooling-related emissions, are at risk of exacerbating climate change if they do not adopt sustainable cooling solutions.

Financing Gaps and Opportunities

Sustainable cooling presents a unique business opportunity, with the potential to mitigate emissions while addressing the cooling needs of billions. The Cooler Finance report estimates that sustainable cooling markets could grow to more than $600 billion annually by 2050, driven by the demand for both active cooling solutions (like energy-efficient air conditioners) and passive cooling strategies (such as building design and insulation).

Despite the enormous potential, financing remains a major barrier. The report identifies a significant gap between the availability of funds and the growing demand for sustainable cooling technologies. For many developing countries, fiscal constraints and perceived investment risks hinder the large-scale deployment of these technologies. However, the report emphasizes that a massive increase in private-sector investment, combined with strategic public-private partnerships and concessional financing, could help close these gaps.

Benefits of Sustainable Cooling

The adoption of sustainable cooling solutions can lead to substantial economic and environmental benefits. According to the Cooler Finance report, accelerating the adoption of passive cooling strategies and energy-efficient technologies could save consumers up to $5.6 trillion in electricity costs by 2050. Furthermore, this would reduce the need for new power generation infrastructure, cutting investment requirements by $1.8 trillion over the same period.

Beyond economic savings, sustainable cooling is vital for meeting global climate goals. By reducing energy demand and transitioning to low-emission refrigerants, developing countries can help mitigate climate change while ensuring equitable access to cooling solutions. For the most vulnerable populations, especially in Africa and South Asia, sustainable cooling is a critical factor in improving health outcomes and boosting productivity.

Policy and Global Collaboration

The report also highlights the pivotal role of governments in creating an enabling environment for sustainable cooling. Governments can lead by example through public procurement, and adopting cooling strategies in public buildings and infrastructure. Additionally, national cooling plans, regulatory frameworks, and fiscal incentives are essential to drive private investment in sustainable technologies.

International collaboration is equally crucial. The Cooler Finance report advocates for greater cooperation between multilateral organizations, development finance institutions, and the private sector to mobilize investment in sustainable cooling. It calls for more accessible data on cooling needs, better awareness of business opportunities, and increased technical assistance for governments.