According to UCL researchers, increasing access to finance to enable poorer countries to afford renewable energy could lead to regions like Africa reaching net zero emission ten years earlier.According to UCL researchers, if countries are able to access finance in a way that is affordable to them, they could be able to afford the funds to switch to renewable energy. This could lead to regions like Africa reaching net zero emission ten years earlier.Credit is essential for the green energy transition required to reduce global greenhouse gases emissions. However, access to low-cost financing is not easy. The cost of capital required to reach net zero varies greatly between regions.The study, Higher cost financing exacerbates climate investment traps in developing countries, was published in Nature Communications. It shows that the path to decarbonisation in developing economies is affected by variations in the weighted-average cost of capital (WACC). This financial ratio is used to determine how much an organisation or company pays to finance operations. It can be either equity, debt, or both. The lower the value, either the government or the company can access funds more easily.Researchers calculated that Africa's current WACC values would be detrimental to its green electricity production, assuming that global warming is maintained at 2C.This study was a collaboration between the UCL Institute of Sustainable Resources (UCL) and the UCL Energy Institute (UCL). Both are part of UCL's Bartlett Faculty of the Built Environment. This study argues for policies to reduce WACC values for low carbon technologies by 2050. This would enable Africa to achieve net-zero emissions around 10 years sooner than if capital cost reductions are not taken into account, 2058 instead of 2066.It describes the "climate investment trap" that developing economies face when climate-related investments are insufficient. These regions already have high costs of financing low-carbon investments. This delays the transition to a cleaner energy system and reduces emissions. Unchecked climate changes would have even greater consequences in these areas, increasing capital costs and disincentive investment. This trap is so ingrained that even poorer countries won't be able to escape it, especially after COVID-19 and its effects on their economies.While the majority of low-carbon investments are required by developing countries, while developed countries have the largest amount of financial capital, the current sustainability initiatives and efforts seem to leave the former out.According to the report's authors, radical changes are required such as underwriting the higher risks associated with low carbon investments in these regions. This will ensure that capital is distributed more evenly and all regions, including those in the global North, are able to reach net zero at the pace necessary to combat climate change to the benefit of everyone.All parties can take responsibility for lowering capital costs in Africa, including investors, policymakers and international organisations like the IMF.Dr. Nadia Ameli, UCL Institute for Sustainable Resources, is the lead author. She stated that "our research shows how early action to improve financing conditions can have a significant effect on the speed of the transition to sustainable energy in lower- and middle-income countries, which in turn will greatly help to protect our planet.""We don’t think it fair that people in regions already suffering from the devastating effects of climate change are forced to pay high-cost financing to switch to renewables. To better allocate capital to regions most in need, radical changes are required in the finance system. We should seize the chance to reform international market finance. A lower cost of capital would allow low-carbon development at an internationally fair cost. The sooner we act, the better.Michael Grubb, UCL Institute for Sustainable Resources, was co-author. He stated: "There is a growing belief in that the developing world will decarbonize much more easily, given the dramatic fall in the average global cost of renewable. We found that there are still major hurdles, especially considering the difficulty many of these countries face in accessing capital at the same terms. To accelerate global decarbonization, it is vital that international financial support be provided.Dr Hugues Chenet, co-author (UCL Institute for Sustainable Resources), said that "our analysis shows the additional difficulty for less developed economies to access capital financing their decarbonization. These countries are being ignored by new policies in sustainable finance, such as the European Union Sustainable Finance Action Plan. This ignores the parts of the globe that most need it.Matt Winning, co-author (UCL Institute for Sustainable Resources), stated that "often developing economies are simply disadvantages when it comes to climate change because they are still developing. Even though there are abundant renewable resources, capital costs for developing regions can be higher due to the risk involved in investing. Our research shows that policies that create a more equal climate finance environment for these economies can have a significant impact.UCL and University of Exeter academics teamed up with the International Centre for Climate Change and Development to launch a 1.5 degree Charter. This Charter aims to show global leaders that achieving the 1.5?C target for temperature rise this century, as outlined in Paris Agreement, will be far more costly than helping poorer countries achieve it.###Notes for EditorsContact:Jane Bolger, UCL Media Relations. T: +44(0)20 3108 9040/+44(0)7713 261 477 E: j.bolger[at]ucl.ac.ukNature Communications published the paper Higher cost finance worsens climate investment trap in developing countries.This paper's DOI will be 10.1038/s41467-24305-3It can be viewed online at http://www. 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