The cooling market in developing economies is expected to grow from around $300 billion to at least $600 billion, per year by 2050, according to a report released on Wednesday by the UN Environment Program (UNEP)-led Cool Coalition and International Finance Corporation (IFC).

The fastest growth in cooling is expected in Africa, which will see the market multiply by a factor of seven, and South Asia, which will quadruple in size, according to the report.

The report calls for prioritizing passive, energy-efficient, environmentally friendly, and economically viable cooling solutions.

The report, “Cooler Finance: Mobilizing Investment for the Developing World’s Sustainable Cooling Needs,” found that developing economies – currently generating two-thirds of global cooling-related emissions – are set to double their cooling demand by 2050 due to population growth, economic expansion, and urbanization.

The report also revealed that sustainable cooling technologies can slash cooling-related emissions by almost half in 2050 in developing economies.

This requires prioritizing passive cooling strategies like insulation, reflective materials, enhancing green areas, and energy-efficient technologies; enforcing minimum energy performance standards and new building energy codes and a faster phase down of climate warming refrigerants; a systems approach to cold chains and large cooling infrastructure services, and incentives to promote innovation.

“The sustainable cooling market represents at least a $600 billion opportunity for the private sector, which could generate more than $8 trillion in benefits for developing countries,

“These nations are especially vulnerable to the deadly effects of rising temperatures and are urgently in need of cooling solutions,” said Makhtar Diop, IFC’s Managing Director.

The report also highlighted the need for significant upfront investments.

Closing existing shortfalls in access to cooling for households and small and medium-sized enterprises (SMEs) in developing countries will require $400-800 billion, in addition to future increases in demand, it noted.

“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.

“We need sustainable, affordable and energy efficient cooling solutions that both meet growing demand and support climate, health, food security, and economic development,

“Governments, private businesses, and multilateral banks can use this report to harness a wide range of financial instruments for sustainable cooling and resilience to extreme heat,” she added.

Key recommendations from the report include improving data on cooling, capital costs, and financing; raising awareness; expanding use of best practice business models and financing tools; increasing seed and high-risk funding for pilot technologies; leveraging blended and concessional finance; and building on the Global Cooling Pledge to create a Sustainable Cooling Finance Partnership.

The transition to sustainable cooling requires an enabling environment to make developing economies more attractive to investors, said the report.

It also said UNEP and IFC are committed to working with governments, businesses, and other stakeholders to de-risk investments and ensure sustainable cooling solutions are accessible to all, especially in low-income regions most prone to increasingly common heatwaves.

IFC — a member of the World Bank Group — is the largest global development institution focused on the private sector in emerging markets.

The organization works in more than 100 countries, using its capital, expertise, and influence to create markets and opportunities in developing countries.

In fiscal year 2024, IFC committed a record $56 billion to private companies and financial institutions in developing countries, leveraging private sector solutions and mobilizing private capital to create a world free of poverty on a livable planet.

UNEP is the leading global organization on the environment. It provides leadership and encourages partnership in caring for the environment by inspiring, informing and enabling nations and peoples to improve their quality of life without compromising that of future generations.

The UNEP-led Cool Coalition is a global multi-stakeholder network that connects a wide range of key actors from government, cities, international organizations, businesses, finance, academia, and civil society groups to facilitate knowledge exchange, advocacy and joint action towards a rapid global transition to sustainable cooling.

The coalition is now working with over 130 partners, including 23 countries.

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