How developing countries can become leading players in decarbonizing world economies.
It is increasingly clear that developing countries will play a central role in combating climate change. Their economic growth and rising per capita energy consumption will have a significant impact on global GHG levels.
Projections paint a depressing picture. Figure 1 shows that by 2100, total GHG emissions are likely to range from 33 to 55 billion tonnes, with a mean of 44 billion tonnes. Of this, only 8 billion tonnes are projected to come from OECD nations, while a staggering 36 billion tonnes are expected from non-OECD nations. This track would result in an overall temperature increase of 2.8°C, far exceeding the 1.5°C or even 2°C targets set by the international community.
To meet a 2°C warming limit, emissions by the year 2100 would need to be no higher than 6 billion tonnes. Even if OECD nations met their net-zero targets by 2100, non-OECD countries would need to cap their emissions at 6 billion tonnes – an 83% reduction from their current forecast. This presents an enormous challenge for developing nations.
Source: Rhodium Climate Outlook, 2023.
They need to increase their energy consumption to improve living standards and drive economic growth. Yet, they are also being asked to make the largest emissions reductions. This is compounded by the fact that many developing countries still rely heavily on fossil fuels, including coal, for their energy needs due to their reliability and affordability.
It may seem very unfair that developing nations, many of which are the least wealthy, must shoulder the greatest burden so global climate targets can be met. And to some extent, it is. The harsh reality, however, is that the climate does not care about fairness. What counts is the total amount of greenhouse gases in the atmosphere, not where they come from. Whether emissions are produced by rich or poor nations is irrelevant. The environmental consequences are the same. The planet responds to the overall levels, not their origin.
Moreover, developing nations often lack the resources necessary to invest in large-scale low-carbon technologies and emissions reduction strategies. It is estimated by 2030 these countries, (excluding China) will need about $2.4 trillion annually for climate mitigation purposes. While about 60 percent of this can be obtained internally, the remaining $1 trillion must come from foreign sources.
This resource gap illustrates the critical need for international cooperation and support. Developed countries, which have historically been the largest emitters and have benefited from carbon-intensive development, have a responsibility to assist less developed nations in their transition to low-carbon economies.
However, under the current international system, there is little incentive for nations to engage in cooperative projects that could result in greater global GHG reductions. If a developed country invests in an emissions reduction project within its borders, the resulting GHG reductions count towards their own targets. But if it invests the same amount in a developing country and achieves twice the emissions reductions, it receives no credit. This model discourages cooperation, even when it could lead to greater overall GHG reductions.
A major obstacle for developing nations in meeting future emission targets is moving away from coal-based power. Coal remains attractive due to it being a low cost, secure and reliable energy source. In the next article, we'll examine the specific challenges these countries face in shifting from coal and how this impacts their energy strategies moving forward.
Jerome Gessaroli is a senior fellow with the Macdonald Laurier Institute. He writes on economic and environmental matters, from a market-based principles perspective. To read the the previous article in his five-part series for Resource Works, click here.