Measuring Emissions
Emissions can be measured from two points in time: dating back to 1850, after the Industrial Revolution when emissions broke away from historical patterns, or a date closer to when the threat of climate change became better understood, perhaps around 1990, when the first International Panel on Climate Change assessment was published.
In addition to when emissions occurred, a country’s population size also needs to be considered. How much a country emits per person (referenced as per capita) can inform our understanding of historical responsibility. Otherwise, large nations could be favored over smaller ones to provide climate finance, even if each person in the large country pollutes less. However, basing responsibility solely on per capita measures of emissions presents its own problems because it would mean that two countries of greatly different sizes, but similar per capita emissions (such as the United States and Iceland), would be responsible for the same amount of funds — an unrealistic result.
Comparing Economic Status
As with emissions, there are different ways to compare national income levels. The most straightforward way could be through gross national income (GNI), which provides an understanding of a country’s economic development. GNI can be expressed in several ways, including the purchasing power parity method, which accounts for differences between national costs of living. In addition, GNI can be adjusted based on external debt burden, to account for the share of national income used to service external debt.
As with emissions, the population of a country comes into play. Take, for example, India, whose economy is currently the sixth-largest in the world — larger than many developed nations. But with a population of 1.45 billion people, India’s GNI per capita ranking drops to 142nd, which would lend itself to the argument that it should not be required to contribute finance. Meanwhile, focusing on income per capita brings several other countries, such as Qatar and Singapore, toward the top of the list.
As negotiators prepare for COP29, WRI identified three big findings by running different scenarios using the climate finance calculator. These findings include:
1) In Any Reasonable Scenario, the United States Must Lead.
Almost every scenario combining emissions and economic metrics ascribes the greatest responsibility to provide climate finance to the United States. Cumulatively, the U.S. is the source of more greenhouse gas emissions since the 1850s than any other country, and it remains the second-largest emitter on an annual basis as well. The U.S. is also the biggest economy in the world. This is not simply because it’s a large country — the nation also has high per capita income and emissions levels.
For example, if we choose a scenario that combines data for per capita and cumulative emissions (from 1850) with data for per capita and total gross national income (GNI) converted to international dollars using purchasing power parity rates (see methodology here), we see that the U.S. is responsible for a much higher amount of finance than any other nation, with China in a distant second place. Using cumulative emissions data starting from 1990 still puts the U.S. on the top of the list, though with a smaller margin.
Since the creation of the $100 billion goal, the U.S. has never come close to fulfilling its fair share of climate finance. Contributions from other Annex II nations also need to rise, but not to the same degree as the U.S.
2) Rising Emissions and Income Levels Should Be Considered
There’s no denying that the world is different today than it was when Annex II was created in 1992. Certain countries have become much wealthier and created higher emissions in the decades since. For example, China has the world’s highest cumulative emissions if we count from 1990, having passed the U.S. in total emissions released annually in the early 2000s.
However, China’s per capita emissions are still 4 times less than those of the U.S. Meanwhile, some smaller countries now have higher per capita income and/or emissions higher than the U.S.
While the data doesn’t provide unequivocal answers as to who should provide international climate finance, low-income, low-emitting countries have no role to play as contributors in any scenario. But it’s also possible that a small group of countries with high emissions and high income that are not currently in Annex II could have a role to play. Their contributions could be mandatory or voluntary — and if voluntary, with or without a responsibility to report on their activities.
3) We Need to Consider Multiple Factors
Combining metrics for per capita and cumulative for both GNI and emissions gives the most reasonable result when considering potential changes to the current climate finance contributor list. Looking just at one such metric on its own can provide skewed results.
Meanwhile, the answer to the question of how to divide responsibility could also come down to factors that can’t be as easily captured through comparisons of emissions and income. For example, there are differing views on how to compare economic development, with many who, from a fairness perspective, see nations that have enjoyed recent rapid economic ascent as different from those that have enjoyed a higher economic status for a longer time period.
There is also the issue of climate vulnerability. Some nations — some small-island developing states, for example — are financially well off and have high per capita emissions. Yet they also face existential threats from climate impacts. Should these countries be on the hook for some international climate finance? Most would likely say no, pointing to the significant and disproportionate domestic financial needs they now face, due to climate change.
Finding a Climate Finance Solution
Calculating and comparing nations’ emissions and economic status is vital to the conversation about which country should contribute to international climate finance. These metrics may not be enough on their own, but they can play a significant role in helping assess and clarify fairness.
Even if the data justifies additional climate finance providers, the question also remains as to what exactly these providers would be responsible for. For the existing $100 billion goal, there is one goal and one list of countries responsible for meeting it. Under the new climate finance goal, a more inclusive and nuanced approach may be needed that reflects the different nature of different parties.
Part of the path to an agreement may be based on greater transparency. Some non-Annex II countries, like China, already invest in a relatively large amount of climate finance in developing nations, but most of it is not reported to the UNFCCC. From 2013 to 2022, China provided $45 billion in climate finance to developing countries, provided by all developed countries combined during the same period. Under the new climate finance goal, such funds could be reported and counted in some way to increase overall transparency and recognition for those playing a role.
Whichever direction negotiations on climate finance take, all countries have a shared interest in the ultimate goal of ensuring there is sufficient finance available for developing nations to achieve an inclusive, low-carbon, climate-resilient future. Cracking the code of which countries should contribute, and how, will play an important role in getting to this shared outcome.