The cooling market in developing economies is expected to grow from around $300 billion to at least $600 billion per year, by 2050 (AFP via Getty Images)
As climate change drives global temperatures higher, developing economies are in urgent need of cooling solutions that don’t contribute to emissions or hike electricity costs.
A new report by the UN Environment Programme (UNEP)-led Cool Coalition and the International Finance Corporation (IFC) projects that the cooling market in these regions could double from $300 billion to $600 billion annually by 2050, with Africa expected to see the fastest growth.
The report highlights traditional cooling methods such as fans, air conditioners, and refrigeration equipment, but stresses the need for affordable, energy-efficient alternatives.
Many people in developing nations, especially in Africa, lack access to electricity or cannot afford basic cooling devices, leaving them vulnerable to increased temperatures.
“These nations are especially vulnerable to the deadly effects of rising temperatures and are urgently in need of cooling solutions. We are proud to present this report, which describes the opportunity to invest in sustainable, affordable, and scalable cooling solutions, aiming for near-zero emissions by 2050,” said Makhtar Diop, IFC’s Managing Director, in a statement.
The report outlines the need for energy-efficient, environmentally friendly, and economically viable cooling technologies. It also warns that if current trends continue, annual emissions from cooling will double by 2050, contributing to over 10% of global greenhouse gas emissions. In 2022, cooling-related emissions accounted for 7.1% of the global total.
“Sustainable cooling solutions can slash cooling-related emissions by almost 50% and reduce electricity bills, equipment costs, and power sector investments by $8 trillion by 2050,” the report found.
Currently, around 3.5 billion people live in hot climates, but only 15% have access to cooling, mainly through air conditioning. Passive solutions like insulation, cool surfaces, and nature-based options such as tree planting and reflective materials are often out of reach for poorer communities.
“As record temperatures continue to be broken across the world, keeping cool is an essential need for both healthy communities and a healthy environment. However, we must avoid creating a vicious cycle of meeting cooling demands through solutions that further heat up the planet,” said Inger Andersen, Executive Director of UNEP.
Andersen stressed the importance of integrating cooling strategies with climate, health, food security, and economic development goals.
“We need sustainable, affordable, and energy-efficient cooling solutions that both meet growing demand and support climate resilience,” she said. The report calls on governments, businesses, and multilateral banks to leverage financial instruments to support sustainable cooling solutions.
In addition to cooling, refrigeration poses serious challenges, particularly for vaccine storage and food preservation. Without proper refrigeration, vaccines could be compromised, and food wastage could increase, exacerbating food insecurity in vulnerable regions.
The report recommends prioritising passive cooling strategies, enforcing minimum energy performance standards, implementing building energy codes, and accelerating the phase-out of climate-warming refrigerants. It also advocates for systems approaches to cold chains and cooling infrastructure, alongside incentives to promote innovation.
To meet the growing demand for sustainable cooling, the report estimates that between $400 billion and $800 billion in upfront investments will be required to close existing gaps, particularly for households and small and medium-sized enterprises (SMEs) in developing countries.
“The transition to sustainable cooling requires an enabling environment to make developing economies more attractive to investors,” the report stated.
UNEP and IFC have committed to working with governments, businesses, and other stakeholders to de-risk investments and ensure that sustainable cooling solutions reach low-income regions most affected by heatwaves.