{
  "title": "Settling the Climate Debt by Clements, Gupta and Liu",
  "sourceUrl": "https://www.imf.org/en/publications/fandd/issues/2023/09/settling-the-climate-debt-clements-gupta-liu",
  "canonical": "https://www.imf.org/en/publications/fandd/issues/2023/09/settling-the-climate-debt-clements-gupta-liu",
  "overlayPath": "/en/publications/fandd/issues/2023/09/settling-the-climate-debt-clements-gupta-liu/index.md",
  "summary": "Putting a dollar figure on emission damages helps assess each country’s fair share of the climate burden",
  "sections": [
    {
      "heading": "Overview and definition",
      "content": "- Climate debt: the sum of emission damages, defined as the cumulative negative effects of carbon dioxide emissions whose costs are imposed on the globe without compensation.\n- Study coverage: estimates of climate debt for 131 countries based on both historical and projected carbon emissions.\n- Policy relevance: estimates inform each country’s fair contribution toward slowing emissions and potential compensation to developing economies."
    },
    {
      "heading": "Scale and distribution of climate debt",
      "content": "- Total estimated climate debt over 1959–2018: $59 trillion.\n- Projected additional accumulation during 2019–35: $80 trillion.\n- Major contributors as of 2018:\n  - United States: $14 trillion\n  - China: $10 trillion\n  - Russia: $5 trillion\n- Shift in composition: beginning in 2018, developing economies will account for a larger share of climate debt due to relatively higher economic growth.\n- Per capita comparisons (1959–2018):\n  - Climate debt per capita is highest in the United States — some 6 times higher than in China and 25 times as high as in India.\n- Per capita projections for 2019–35:\n  - Climate debt per capita remains highest in the United States and will rise in China, exceeding the expected level in the European Union.\n- Relative to fiscal metrics:\n  - Climate debt in G20 countries: about 81 percent of GDP.\n  - Average general government debt in G20 countries in 2020: 88 percent of GDP.\n  - Projected net present value of public spending on health and pensions in G20 countries during 2020–35: average 25 percent of GDP."
    },
    {
      "heading": "Scenarios and impacts of climate policy commitments",
      "content": "- Scenario 1 — Full implementation of countries’ NDCs (assumes gradual annual emissions reductions to meet 2030 targets):\n  - Reduction in accumulation of climate debt by $9.6 trillion (24 percent).\n  - Despite reductions, sizable contributors through 2019–35 would still include China and the United States, contributing $12.9 billion and $5.4 billion, respectively.\n  - Conclusion: NDC implementation alone is insufficient for fair burden sharing.\n- Scenario 2 — Additional reductions to achieve the 1.5°C goal:\n  - A proposal: ask countries for additional reductions based on their share of total emissions for that year.\n  - If each G20 country reduced emissions beyond its NDC, projected climate debt would fall by an additional $6.4 trillion.\n  - Equity concern: even with these reductions, climate debt per capita in advanced economies would remain much higher than in G20 developing economies.\n- Feasibility insight:\n  - Between now and 2030, reducing emissions in a way perceived as fair is likely infeasible given the shrinking share of advanced economies in global emissions.\n  - Advanced economies may need to either reduce emissions over a longer period or compensate developing economies through more generous climate financing."
    },
    {
      "heading": "Fiscal policy options and constraints",
      "content": "- Fiscal tools recommended:\n  - Higher taxation of energy, including carbon taxes, to reduce emissions and fund additional spending.\n  - Subsidies for clean energy (noted as used in the US and Europe).\n  - Complementary fiscal policies to offset short-term adverse effects of carbon taxation on low-income households.\n- Constraints and considerations:\n  - Pandemic-induced increases in public debt limit fiscal space, especially for developing economies.\n  - Subsidy approaches are less feasible for developing economies due to limited fiscal space.\n  - Ethical questions: intergenerational burden sharing; urgency because damage from emissions rises over time; phased adjustments for developing economies as per capita incomes rise."
    },
    {
      "heading": "Policy implications and pragmatic recommendations",
      "content": "- Principle: countries with high climate debt because of historical and current emissions have a moral claim to compensate countries that caused less damage.\n- Practical burden-sharing approach:\n  - Given political and practical limits to equalized emissions cuts by 2030, advanced economies should ramp up assistance to developing economies.\n  - Climate finance instruments: grants and concessional loans to pay for mitigation and adaptation.\n  - IMF contribution: the IMF’s new Resilience and Sustainability Facility is extending concessional financing for climate transition and pandemic preparedness to developing economies.\n- Financing gap:\n  - Current climate finance has not yet reached the goal of $100 billion a year and is inadequate relative to the large climate debt of advanced economies.\n\nSource: Settling the Climate Debt by Benedict Clements, Sanjeev Gupta, and Jianhong Liu (F&D Magazine).\n\n---\n\n Content in this bundle\n\n- Settling the Climate Debt\n  - Settling the Climate Debt (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Settling the Climate Debt (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/fandd/issues/2023/09/settling-the-climate-debt-clements-gupta-liu"
    }
  ],
  "bullets": [
    "[Markdown version](/en/publications/fandd/issues/2023/09/settling-the-climate-debt-clements-gupta-liu/index.md)",
    "[Structured JSON version](/en/publications/fandd/issues/2023/09/settling-the-climate-debt-clements-gupta-liu/index.json)",
    "[Bundle manifest](/en/publications/fandd/issues/2023/09/settling-the-climate-debt-clements-gupta-liu/bundle-manifest.json)",
    "Authors: BENEDICT CLEMENTS, SANJEEV GUPTA, JIANHONG LIU",
    "Published: September 1, 2023",
    "DOI: https://doi.org/10.5547/2160-5890.12.1.bcle",
    "Climate debt: the sum of emission damages, defined as the cumulative negative effects of carbon dioxide emissions whose costs are imposed on the globe without compensation.",
    "Study coverage: estimates of climate debt for 131 countries based on both historical and projected carbon emissions.",
    "Policy relevance: estimates inform each country’s fair contribution toward slowing emissions and potential compensation to developing economies.",
    "Total estimated climate debt over 1959–2018: $59 trillion.",
    "Projected additional accumulation during 2019–35: $80 trillion.",
    "Major contributors as of 2018:",
    "Shift in composition: beginning in 2018, developing economies will account for a larger share of climate debt due to relatively higher economic growth.",
    "Per capita comparisons (1959–2018):",
    "Per capita projections for 2019–35:",
    "Relative to fiscal metrics:",
    "Scenario 1 — Full implementation of countries’ NDCs (assumes gradual annual emissions reductions to meet 2030 targets):",
    "Scenario 2 — Additional reductions to achieve the 1.5°C goal:",
    "Feasibility insight:",
    "Fiscal tools recommended:",
    "Constraints and considerations:",
    "Principle: countries with high climate debt because of historical and current emissions have a moral claim to compensate countries that caused less damage.",
    "Practical burden-sharing approach:",
    "Financing gap:",
    "**Settling the Climate Debt**"
  ],
  "related": [
    {
      "title": "Settling the Climate Debt",
      "role": "document",
      "sourceUrl": "https://www.imf.org/-/media/files/publications/fandd/article/2023/september/clements-gupta-jianhong-liu.pdf",
      "summary": {
        "path": "/-/media/files/publications/fandd/article/2023/september/clements-gupta-jianhong-liu.pdf.md",
        "mime": "text/markdown"
      },
      "binary": {
        "path": "/-/media/files/publications/fandd/article/2023/september/clements-gupta-jianhong-liu.pdf",
        "mime": "application/pdf"
      }
    }
  ],
  "alternates": {
    "markdown": "/en/publications/fandd/issues/2023/09/settling-the-climate-debt-clements-gupta-liu/index.md",
    "json": "/en/publications/fandd/issues/2023/09/settling-the-climate-debt-clements-gupta-liu/index.json",
    "bundleManifest": "/en/publications/fandd/issues/2023/09/settling-the-climate-debt-clements-gupta-liu/bundle-manifest.json"
  },
  "generatedAtUtc": "2026-09-15T18:49:16.052Z"
}