What Will the New Year Bring? 2024 Climate Business Forecast from IFC Experts.

With 2024 now well underway, we’ve asked IFC - International Finance Corporation 's climate experts to share their forecasts on key developments likely to unfold in the coming year, as well as challenges and opportunities in 2024 and beyond. They express optimism regarding the global trajectory in 2024, bolstered by private sector support, while acknowledging the challenges and constraints that private companies face in their transition to low-carbon growth. Bookmark this page and check in with us again at the end of 2024 for a debrief!

William Beloe , Climate Finance:?

“2024 will be a pivotal year for climate finance. The past year’s heatwaves and shocking temperature increases — setting a new record of 1.48 °C warmer than pre-industrial temperatures — made the urgency of climate action crystal clear. I think we’re going to see increased access to finance for both mitigation and adaptation, as well as more funding for Emerging Economies. The need for climate finance is massive — between $2 trillion and $6 trillion per year, depending on the estimates?— and most of it will have to come from the private sector. Multilateral development banks will have a key role in coming up with financial products and economy sectors best suited for this breakthrough.”

?Ignacio de Calonje and R. Balaji, Green Hydrogen

“This year, we are hoping to see a significant ramp up in Final Investment Decisions (FID) on #greenhydrogen projects and bolder actions from governments to support the sector.? In 2023, we only saw a dozen large scale projects achieve FID globally, totaling under 0.5 million tons per annum of hydrogen capacity.? This is really a drop in the ocean compared to the tens of millions of tons of green hydrogen that we will need by 2030. ?A key challenge is making projects bankable and bridging the cost gap versus grey hydrogen.? IFC is working with a number of private sector sponsors, providing support on feasibility studies, pilot projects, etc. ?But we are also partnering with our World Bank colleagues to ensure governments move swiftly to provide grant schemes, clear regulations and offtake support that will incentivize the first movers.”

?Ahmad Slaibi, Climate-Smart Agriculture

“In the past few years, leading agricultural companies have increasingly made commitments to reduce the #GHG footprint of their own production and especially in their supply chains, which are often in the emerging markets and represent the bulk of their scope 3 emissions. In 2024, I expect to see more companies follow with similar plans and accelerate conversion of these commitments to action. ?The EU's new deforestation regulation will help to strengthen commitments and efforts to avoid deforestation. ?I’m expecting that 2024 will be marked by continuing efforts to manage the impacts of climate change on agricultural production through innovation and by scaling up adoption of proven technologies (like drip irrigation) to enhance resilience.? Reducing food losses in the global supply chain will be another priority theme.”

Basak Odemis , Carbon Markets

“This year, we’re going to see a lot more focus on high-quality, high-impact #carboncredits. ?Efforts to enhance the integrity of carbon markets, addressing both demand and supply aspects, will intensify, aiming to establish a robust, efficient, and trustworthy global carbon market. Astute investors are expected to go beyond carbon neutrality and net-zero targets and to endorse projects with a demonstrable positive impact on biodiversity, community engagement, and ecosystem restoration. At IFC, we will expand our support for those efforts.”

?Kartik Gopal, Electric Vehicles

“In the last few years, the adoption of #ElectricVehicles (EVs) has been accelerating in a few Emerging Markets where IFC operates, in areas like manufacturing, bank lending and public transport. I expect the trend to continue in 2024, with investments opening up in newer segments of the EV value chain like commercial vehicle fleets and EV leasing platforms.? We will also see more investment opportunities in new countries.“

Ommid Saberi , Green Buildings

"In 2024, the spotlight on #decarbonization and resilience will shine more intensely than ever, and #greenbuilding finance will be at the forefront of this movement. Despite a slower global economy and higher interest rates, the growth of the green building sector will be more vigorous than ever. With notable growth in?Building Certifications such as LEED, EDGE and BREEAM, I predict that, as interest rates go down, the green building market will flourish toward the end of 2024."

?Katherine Koh, Climate-Resilient Infrastructure

“Infrastructure networks (power generation plants, logistic networks, utilities, and telecom infrastructure) are increasingly exposed to more frequent, extreme weather conditions and longer-term climate change effects.? However, they will also play a vital role in building resilience to those impacts – for example, expanding satellite coverage to enable better emergency response for small island developing states in the Pacific or enhancing water supply for water-challenged regions in Latin America. ?In 2024, capitalizing on the momentum built at #COP28, there will be even greater emphasis on directing more private and concessional capital toward building infrastructure for climate adaptation and resilience. ?MDBs will have a critical role to play in bridging the public and private sectors, helping build capacity and catalyzing funding in this space.”

Irina Likhachova, Biodiversity Finance

“The work to shape the #biodiversity finance market has been firing on all cylinders across political commitments, market rules and standards, and pledges by investors and corporates. In 2024 we can expect to see growth in nature and biodiversity-themed portion of the sustainable finance market. The biggest opportunities will come from investments to transition economic activity towards practices that halt and eventually reverse damage to ecosystems. 2024 is the year of first nature-related disclosures in accordance with TNFD, contributing to deepening the market understanding of risks, dependencies and impacts on nature. The biodiversity COP16 in Colombia will be a crucial checkpoint on progress against numerous market commitments.”

Sean Whittaker, Offshore Wind

“2023 was a difficult year for #offshorewind. Rising inflation, higher commodity prices and supply-chain bottlenecks placed a strain on developers and suppliers as well as emerging-market governments seeking to kick-start their offshore wind ambitions. In 2024, I expect to see these issues subside. We will also see a renewed interest in new markets like Colombia, Brazil, Romania, Türkiye, Sri Lanka, India, the Philippines and Vietnam — all of which have benefitted from the support of the ESMAP-IFC Offshore Wind Development Program.“

?Diep Nguyen-Van Houtte, Climate Innovation

?“#COP28’s agreement to move away from #fossilfuels will jump-start innovation in renewable energy. Battery energy storage systems will fully emerge from the supply-chain crisis. Manufacturing capacity will continue to grow, and prices will go down — all of which will lead to global growth of between 15% and 20%, and perhaps even a battery price war later in the year.? Other innovations like sodium-ion batteries and long-duration energy storage will grow, particularly in markets with high levels of renewables, as well as in remote areas. #Greenhydrogen, #greenammonia and e-methanol will continue to mature. IFC hopes to make headway in technologies like district cooling and other more efficient cooling techniques – which have great potential to reduce energy consumption and reduce emissions but haven’t yet taken off.”

Franziska Deininger, Gender Finance

“While the global dialogue on climate action is gaining momentum, there is one glaring gap: the role of women leaders in accelerating effective and inclusive climate solutions, and a gender disbalance on corporate boards and in policy circles. In the new year, we will see a growing recognition that large-scale decarbonization efforts and locally-led adaptation are not possible without the participation of women and other marginalized groups. “

Prashant Kapoor, Green Cities

In 2024, more cities are expected to adopt sustainability-linked financing, aligning financial incentives with broader climate goals for more effective urban development. Cities like Quezon City, Medellin, Chennai and Bangkok are utilizing APEX climate investment diagnostics to identify diverse financing instruments. These include innovative options like property-linked finance for building retrofits and vehicle upgrades, alongside traditional approaches such as PPP and loans, ensuring comprehensive funding for their green city transformation.

Oxana Meggle, Sustainable Finance

“The past year was all about reinforcing the integrity of sustainable finance markets, with more issuers and borrowers preferring to issue traditional green bonds rather than tapping into sustainability-linked debt. Going forward we see a growing willingness of market participants to advance credible and just ecological transition plans alongside their value chains and to use sustainable finance instruments to fund their implementation. Having interoperable taxonomies of green and transition economic activities will be one of the main drivers to increasing investors’ confidence in financing transition using green and sustainability-lined loans and bonds.”