By Dr Moritz Kraemer, Chief Economist and Head of Research at LBBW Bank and Senior Fellow at the Centre for Sustainable Finance at SOAS, University of London and Dr Ulrich Volz, Professor of Economics and Director of the Centre for Sustainable Finance at SOAS, University of London and Senior Research Fellow at the German Institute of Development and Sustainability (IDOS).

Many developing countries are struggling under a high sovereign debt burden and rising interest rates that leave little fiscal space to meet their Nationally Determined Contributions under the Paris Climate Accord.

While the 80 economies designated by the World Bank as low-income countries (LICs) or lower-middle-income countries (LMICs) – home to over half the world population –contributed just over 17% of total world carbon emissions in 2021, and much less in terms of historical emissions, global population growth will be entirely driven by these countries in the coming decades. Their future contribution to global emissions is set to grow substantially if the foundations for low-carbon development pathways are not put in place today.