The transition wall: Assessing climate investment dynamics in vulnerable countries

Some developing economies are approaching what can be described as a “transition wall” – a situation in which they are highly vulnerable to climate change and nature loss, yet unable to mobilize the investments required to mitigate and adapt to their impacts. More specifically, the concept refers to transition pathways that, while theoretically feasible, prove financially or socially unsustainable, making the political economy of the transition unlikely to succeed. Such situations may arise when the transformations required to shift toward greener, more resilient, and investment-led growth pathways that would enable the transition risk generating unsustainable macroeconomic, fiscal, or social pressures.