Green construction in emerging markets needs USD 1.5 tn: Decarbonizing the construction sector in emerging markets needs USD 1.5 tn in investments, according to an International Finance Corporation (IFC) report released last week. Construction contributes around 40% of global CO2 emissions with an expected increase of another 13% by 2035, two-thirds of which come from emerging markets. These emissions can be reduced through energy-efficient designs for new buildings and improvements to old ones, the report highlights.

The tech needed is already out there, but policy changes and financing are needed: Methods of decarbonizing the construction industry are available but "the issue is getting them to be more widely used and that is a matter of financing, a matter of policy," IFC vice president for economics and private sector development Susan Lund told Bloomberg. A Senegalese subsidiary of French cement maker Vicat SA is exploring biomass fuels to cut emissions by around 300k tCO2/year. Governments are behind on green construction policies, as about 110 countries have no mandatory building energy codes, the report adds. Emerging markets also issued only around 10% of the USD 230 bn of the global private debt financing for green construction.

The IFC is trying to boost the sector: Establishing new markets for green buildings in emerging countries needs derisking, Lund added. As this can be done through tools like blended finance and performance-based incentives or first-loss guarantees, the IFC is establishing a new facility for private investors to increase financing for green construction in emerging markets, the report reads.