As the world races toward net zero, pioneering batteries, green hydrogen and carbon capture, one of the most immediate climate threats continues to go largely unnoticed: the global cooling crisis.

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A recent report by the IFC and UNEP puts this into stark perspective. Today, nearly 3.5 billion people live in regions classified as “hot,” with the vast majority residing in the Global South. As temperatures continue to rise, 2024 was the second consecutive year to break all-time global heat records, the need for affordable, sustainable cooling is no longer optional. It is an adaptation imperative.

 

Yet cooling remains underfunded, undervalued, and misunderstood. The world’s hottest regions, home to some of the most vulnerable populations, are grappling with this gap, largely on their own.​​

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Why Cooling Matters: Especially in India

 

In India, public awareness is far ahead of the policy and investment response. According to the Yale Program on Climate Change Communication in 2023, 91% of Indians said they are concerned about climate change, and 85% cite rising temperatures as their top concern. Remarkably, survey out of IIT Bombay shows that 62% of those surveyed were willing to pay a premium for energy-efficient appliances, signaling a market that’s both aware and ready.

 

The scientific case is just as clear. According to the IEA, cooling alone will drive 37% of the total increase in global electricity demand by 2050, more than any other use case.

 

Why Cooling Remains in the Shadows

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Despite this urgency, investment into cooling remains limited. Not because the capital isn’t available, but because investors and lenders perceive it as risky. Unclear regulatory frameworks, fragmented supply chains, and the absence of robust data make it harder to underwrite scalable opportunities.

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In India, enforcement around refrigerant management is weak. High-GWP gases (some with warming potentials over 14,000 times that of CO₂) are frequently released into the atmosphere due to the lack of proper recovery and recycling infrastructure. This undermines investor confidence, particularly in technologies that are capital-intensive and dependent on long-term regulatory certainty.

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At the same time, SMEs struggle to prove commercial viability, and the market continues to suffer from a lack of segmentation, reliable benchmarks, and business models tailored to local contexts.

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This vacuum creates a cycle: limited funding leads to limited innovation, which in turn reinforces perceptions that the space is too nascent to back.

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Reframing Cooling as a Systems Challenge

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Cooling is not a standalone sector. It cuts across agriculture, buildings, transport, and healthcare. This complexity makes it harder to size markets or map value chains in the way that traditional investors are used to.

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At Peak, our approach has been to work backwards from end users. We categorize customer segments by affordability thresholds and usage intensity, which allows us to spot gaps in distribution, technology, or financing. This lens helps us navigate demand-side uncertainty, especially in geographies where hard data is scarce.

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The interplay between passive and active cooling also requires deeper analysis. In many parts of India, the lack of passive solutions means that any rise in income or temperature could significantly drive up demand for energy-intensive active cooling. But this isn't just about energy, it’s about infrastructure, emissions, and equity. Getting the mix right is key.

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