Italy’s Central Bank Governor Fabio Panetta supported a plan to assist poorer countries in reducing carbon emissions, stressing that it would lower the overall costs of the energy transition.
Speaking at a G7 International Energy Association conference in Rome, Panetta noted that investments in sustainable funds have slowed due to political pushback against environmental initiatives in some countries.
Developing nations face significant challenges in securing the funds needed to phase out coal-fired power plants and transition to clean energy.
Financing such changes in emerging and developing economies can be twice as expensive as in advanced economies, according to Panetta.
He proposed a scheme where countries with higher per capita emissions would compensate those with lower emissions.
This financial support would be offset by the economic benefits of avoiding the damage from climate change. Panetta argued that this approach would be more cost-effective in the long run.
Prime Minister Giorgia Meloni’s government has committed to supporting developing countries, particularly in Africa, in their economic growth and adoption of low-carbon technologies.
