What is an ‘Emerging Market’?
According to Investopedia, an emerging market is the economy of a developing nation that engages more with the global markets as it grows. Countries classified as emerging market economies are those with some, but not all, of the characteristics, one may find in a developed market.
In order to calculate this accurately on a global scale, every country is scored by the International Monetary Fund (IMF) on basis of three main characteristics:
Systemic presence: The size of the country’s economy(nominal GDP), its population, and its share of exports in global trade. Market access: The share of a country’s external debt, as well as whether it is included in global indices used by large international institutional investors and the frequency and amount of international bonds issued. Income level: A country’s GDP per capita in nominal US dollars. The weighted sum of the individual scores reveals a nation’s rank within the emerging market economies list if it already isn't a developed or advanced economy.
Currently, the notable emerging market economies in the globe are India, Russia, South Africa, China, and Brazil. They are a part of an organization called BRICS.
Their mission?
These five nations are expected to be the world’s major providers of manufactured products, services, and raw materials by the year 2050.
But what does this have to do with climate change? Well, let’s find out.
How has climate change impacted their growth?
The BRICS nations account for 42% of the global population, 33% of global GDP, and 17% of global commerce. Why are we stressing about this? Well, because these countries contribute 42% of the entire global emissions. Yes, 42%!
Since 2020, these nations have fallen back on their targets set for the next two years mainly due to the pandemic, but also because of multiple climate-related issues that their communities faced. Let’s look at some that occurred in the recent past:
Russia’s vast Arctic regions warmed twice as fast as the global average, massive forest fires erupted across the nation, and the capital city Moscow had its warmest December ever.
China’s greenhouse gas emissions have resumed their rise and the economic engines of Shanghai and Guangzhou are soon predicted to be submerged by the warming, rising seas, and attacked by associated extreme weather events.
India’s capital city of Delhi suffered unprecedented levels of climate change including intensified air pollution, that closed schools, factories, and transport facilities and caused a spike in premature deaths.
Brazil’s unprecedented forest fires in the Amazon, the critical lungs of the earth, burned 9,123 square kilometres.
South Africa warmed twice as fast as the global average and had suffered since 2015 from a severe drought that almost drained Capetown dry of drinking water.
These stories are just a few from their history books as these nations are in a fight daily against the forces of nature. In order to counter them in a way to impact their economies positively, it is crucial that they collaborate with one another and aim to achieve net zero carbon goals while making strides to become an advanced nation.
What measures have they taken to achieve net zero carbon?
Several countries have made net zero commitments to meet the global policies. The current projection is to limit global warming to about 3°C above pre-industrial levels by 2100, which remains far from achieving the Paris Accords goal of 1.5°C.
Within emerging markets, the landscape varies across a spectrum, ranging from nations that have announced achievable carbon targets to those that have yet to declare any significant policies.
It is critical that the emerging markets’ governments will need to adopt growth-enhancing fiscal and structural reforms that promote sustainable investments, backed by productive and cost-effective climate policies, to achieve climate-compatible development. This is a win-win for both the economy and the world.
Below are some examples of key emerging market economies that announced climate-aware ambitions to limit and reduce emissions, as well as more direct plans to tackle major environmental concerns:
China aims to reach net zero carbon by 2060 which will contribute significantly to the planet as the nation accounts for 30% of the global carbon emissions, having a substantial impact on the world. Since electricity generation and industry account for the majority of her emissions, changing the country’s energy balance is essential. The government has targeted these areas with guidelines that enforce the adoption of green energy, carbon-efficient manufacturing, and energy storage. With the dedication shown to increase her wind and solar generation from less than 10% in 2020 to around 39% as of 2022, China is on the right track to building a sustainable future.
Their neighbours, India, does not currently have a net zero goal, but it does have a strategy to lower the carbon intensity of its gross domestic product by 35% from 2005 levels by 2030. Its ambition has fueled its push for EVs, as well as its call for state-owned enterprises to mitigate climate change. By 2030, India also wants to generate 40% more electricity from renewables than it does now.
Brazil currently boasts one of the world’s cleanest electricity portfolios. More than 80% of its energy sources are renewable, with more than 15% coming from wind, solar, and biomass energy and almost 65% from sizable hydropower projects. The government has pledged to achieve climate neutrality by 2050 rather than 2060, stop illegal deforestation by 2030, increase funding for related law enforcement, and maintain the nationally determined contribution target of reducing greenhouse gas emissions by 43% by 2030 compared to 2005 levels. These commitments are in addition to plans to diversify its renewable energy sources.
Conclusion
Emerging markets are on a path to reaching global domination in the near future. Doing this sustainably is a hard task as the phrase sounds, with many governments to this day opting for the unconventional path of manufacturing and operating with fossil fuels.
It is crucial that every leader makes sure his/her country achieves its carbon targets for the years. If they can do this feat without rustling many leaves, then the future looks good for us.
Positive actions and targets from emerging market economies are critical in our stand against climate change as their win will help inspire billions of humans. Inspire to do what exactly? Well, it should inspire us to help shape a sustainable, green future for our kids and their future generations.
Hope is right around the corner, it’s never too late. All we need is some unity, mindfulness and love to help shape a green future.