Uneven net-zero transition could leave emerging economies behind

According to a research released by the Asian Infrastructure Investment Bank (AIIB), emerging and developing economies (EMDEs) are in danger of falling behind the net-zero transition, unless immediate action is made to increase state capacity alongside the private sector. The bank suggests development of a fresh capacity to accelerate green innovation and the adoption of new technologies.

The net-zero transition is described as a “moonshot”  a once-in-a-lifetime opportunity that will need mission-driven industrial policy across economies globally. In order to speed up green innovation and the uptake of new technologies, it calls for the better use of state capacity that already exists as well as the development of new capacity.

“Specifically, the move toward decarbonization requires a significant shift away from the business-as-usual path. Challenges mainly lie on two fronts: first, bringing the actors together who adapt and evolve for the common cause, which will require moonshots toward innovations, technology, capacity building, etc.; second, developing the financial system to suit the immense investment needs during the transition process by facilitating innovative products and services,” the report added.