Funding energy transition in developing nations key to curbing emissions

After a series of back-to-back scorching days across the world that broke temperature records, the World Meteorological Organisation (WMO) said on Monday that Earth’s average temperature was highest ever in the beginning of July – the latest in a series of alarming (but not surprising) signs that the planet is already very hot and that greenhouse gas emissions need to decrease substantially.

Developing economies argue that they have a lesser responsibility of doing so because of their lower historical contribution. (HT file photo)
Developing economies argue that they have a lesser responsibility of doing so because of their lower historical contribution. (HT file photo)

However, underdeveloped and developing economies often argue that they have a smaller responsibility of doing so because of their lower historical contribution and current per capita emissions.

Also Read: Global temperatures smash records, underscore danger of greenhouse gas emissions

Does this mean that energy transition in these economies can wait? Not really. A transition in just the developing economies of the G20 could be one of the fastest ways of reducing emissions. However, even this scenario involves the developed economies paying for their historical emissions, because these economies cannot fund such a transition themselves. Here are three charts that explain this.

Developing economies and current emissions…

Developing economies are correct to argue that historically they are not responsible for the climate crisis gripping the world right now. The two most populous among these – India and China – have contributed only around 18% of the total fossil emissions since 1850, despite accounting for 36% of the world population right now. However, this should not be taken to mean that these countries will remain irrelevant in the trajectory of the climate crisis. In 2021, these two countries accounted for 38% of the fossil emissions; while all developing economies of the G20 taken together contributed 53%. Clearly, a bulk of future emissions are going to come from developing nations, and they will go on to define the battle against the global climate crisis unless this trend changes.

…despite developing nations being energy frugal right now

It may appear obvious that developing economies emit more because they consume more fossil-based energy. However, this is not an entirely straightforward correlation. An example should make this clear. Renewables were 20% of the power mix in 2020 for both Mexico and Russia, the former a developing country and the latter a country in transition. However, Mexicans emitted only 2.7 tonnes CO2 per capita in the year, while Russians emitted 10.8 tonner CO2 per capita. In fact, an analysis of 21 emerging markets and developing economies (EMDE) shows that the share of renewables in the power mix hardly has any relation with per capita emissions. This is because the poorer economies genearlly consume less electricity per person.

For example, electricity consumption per capita by Mexicans was only around a third of Russians. Therefore, while the share of renewables in power mix does not have a relation with per capita emissions, fossil-based per capita electricity consumption does. This means that the “per capita emission” argument that developing economies use right now becomes weaker as they develop more. This is because per capita electricity and energy demand increases as countries become richer. The data for the 21 economies (this also holds true for the world in general) also shows that per capita electricity consumption is higher among economies with bigger per capita GDP.

Transitioning now can keep emissions low

The above arguments make it clear that an energy transition right now will help in keeping emissions low even as the developing economies of today become developed tomorrow.

What will this take?

A report published by the International Energy Agency in June shows that EMDEs invested US$770 billion across different aspects of energy transition – such as electricity generation and distribution, phasing down of fossil fuels, and efficient energy use by households and industries – in 2022. This needs to increase to $2.2 trillion annually at 2022 prices during 2026-2030 and further to $2.8 trillion annually at 2022 prices during 2031-2035 (and remain at this level until 2050) to limit warming to reach net zero emissions by 2050 and limit global warming to 1.5°C. If China is excluded from this group, the increase will have to be even bigger proportionally: $260 billion in 2022 to $1.9 trillion.


    Abhishek Jha is a data journalist. He analyses public data for finding news, with a focus on the environment, Indian politics and economy, and Covid-19.

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