2nd September 2025
The IMF and Carbon Debt
The rising temperatures we are now witnessing cone not just from the CO2 currently being emitted but also the accumulation of CO2 over the centuries. Carbon dioxide stays in the atmosphere for anywhere between 300 and 1000 years, constantly acting as a blanket keeping in the sun’s warmth. For humans and the environment that best suits us, the ideal amount of CO2 in the atmosphere is between 280 and 350 parts per million (ppm). That was the level prior to the industrial revolution when we began significantly increasing the emission of carbon dioxide beyond the Earth systems capacity to absorb the extra CO2. Carbon dioxide levels in the atmosphere now stand at 425 ppm, reflecting the continued and increasing emission of CO2.
Countries that industrialised first have been contributing to this problem for some 175+ years. Newly industrialised countries for a shorter time span. The amount produced by countries in both scenarios varies reflecting degrees of heavy industry, levels of consumer consumption, dependency on fossil as opposed to alternative fuels etc. Each country can be judged to have a ‘climate debt’ according to how much carbon dioxide it has cumulatively contributed towards global warming since industrialisation. The debt can be costed in terms of what proportion of the negative costs of climate change – its adverse effects on health, the cost of adverse weather events, etc.
According to the IMF’s report, Settling the Climate Debt (2023) “It can be argued that each global citizen has an equal right to an environment unaffected by climate change. This implies that countries with high climate debt because of their high emissions should compensate countries that have caused less damage to the environment.” (1) And clearly if countries fail to curb their emissions, that debt will be constantly increasing.
The report also attempts to put figures to show the scale of the debt. “Climate debt can be estimated based on actual and projected emissions and the social cost of carbon, which measures the economic damage per ton of CO2 emissions. We find climate debt to be extremely large—some $59 trillion over 1959–2018 (Chart 1)—and projected to increase by another $80 trillion during 2019–35. The size of each country’s climate debt reflects both the size of its economy (which is positively correlated with emissions) and how intensively it uses fossil fuels (thus generating emissions) for every dollar of economic output. The composition of energy use (for example, heavy use of coal) has an impact as well. As of 2018, the largest contributors were the United States ($14 trillion), China ($10 trillion), and Russia ($5 trillion). Beginning in 2018, developing economies will account for a larger share of climate debt, given their relatively higher economic growth.”
These figures are large. The report notes “Climate debt is substantial relative to government debt; in G20 countries, it is about 81 percent of GDP, compared with average general government debt of 88 percent of GDP in 2020.” Perhaps for this reason, the report does not suggest ways in which this debt might realistically be repaid to those who have suffered the impact of climate change – and perhaps that was not the purpose of the report.
Rather the report goes onto explore how countries through their Nationally Determined Contributions, mandated by the Paris Agreement, are in fact reducing their emissions and thus reducing the ongoing rate at which their climate debt is accumulating. The IMF feels hesitant about asking countries both to reduce their emissions (which does come with a cost implication in the short term at least) and asking them to repay their climate debt. The report surmised that “Instead, advanced economies may need to focus on reducing emissions over a longer time period or aggressively compensating developing economies for the damage caused by climate change, including through more generous climate financing.”
However the report does conclude: “Climate debt from CO2 emissions is large and unevenly spread across the world’s economies. The size of the debt—and its disparity among countries—portends contentious discussions on countries’ fair burden in slowing climate change and the level of assistance to developing economies to compensate for these differences.
“Climate debt per capita is projected to be much higher in advanced than in developing economies, even under full implementation of NDCs by G20 countries. This implies that advanced economies may need to make additional efforts to achieve fair burden sharing in the fight against climate change.”
So whilst there is no clear strategy as to how the climate debt should be repaid – and continue to be paid as the impact of our emissions continues – at least there is the acknowledgement that the current situation between those who contributed most to the climate crisis and those who suffer the most, is unfair.
The Green Tau 