More than 80% of investments aimed at reducing greenhouse gas emissions are coming from the private sector in affluent countries, according to Avinash Persaud, special adviser to the president of the Inter-American Development Bank. Persaud highlighted a growing disparity in funding efforts between rich and developing countries, noting that such emission-reduction investments are not taking off in lower-income regions.
“This investment pattern underscores a troubling gap,” said Persaud. “While private capital is accelerating clean energy and low-carbon projects across wealthier nations, the same is not true in the developing world.”
Experts warn that this funding imbalance may hamper global efforts to combat climate change, as many developing countries are both highly vulnerable to its effects and in need of substantial financing to transition to greener economies.
The issue points to a broader challenge—mobilizing global financial systems to support sustainable development universally, not just in economically advanced regions. Bridging this gap may require stronger public-private partnerships, incentivized financing models, and policy reforms geared toward making developing markets more conducive to investment in climate action.
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