(Bloomberg) --
Billionaire investor Ray Dalio said rising interest rates have made it harder to get climate projects off the ground.
“Is it more difficult to finance now that you might have an 8% cost of funds rather than free money? Yes it is,” he said at the Bloomberg Green summit at COP28 in Dubai on Tuesday. He added that lenders need a real return or else risk creating a bubble.
The Bridgewater Associates founder said the only way to unlock the up to $10 trillion a year needed in climate investments is to make green solutions profitable.
Read more: What Is COP28 and Why Is It Important?
Dalio said climate change is an expensive problem and investors have a limit given global GDP is only about $100 trillion. “We are living in a world that doesn't have enough money,” he said.
The investor noted there are some inventive ways being developed to direct money toward the climate crisis. Dalio said the United Arab Emirates' newly announced Alterra climate fund, which aims to mobilize $250 billion by the end of the decade, is a “wonderful template.” BlackRock Inc., Brookfield and TPG are inaugural launch partners.
Still, Dalio said it's unlikely the planet will meet its warming target of 1.5C, meaning there needs to be a greater focus on adaptation, which “will be an area for great investment and great productivity.”
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