Climate fairness, economic development, and Europe’s responsibility

The idea of equal cumulative emissions per person is simple: every individual should have an equal claim on the atmosphere regardless of where they live. Using historical population and emissions data from 1870 onward, this column examines how the world’s remaining carbon budget could be allocated fairly across countries. European states have already consumed more than their share, whereas many developing countries retain positive claims. Allocating the remaining budget fairly can be compatible with development goals if developing countries can access cleaner technologies. Europe can start by redesigning the Carbon Border Adjustment Mechanism to embed explicit fairness principles.

Climate policy is often discussed in terms of emission targets, renewable energy, and the transition to net zero. Yet behind these debates lies a more fundamental question: who is entitled to use the remaining capacity of the atmosphere? We address this issue by examining how the world’s remaining carbon budget could be allocated fairly across countries and whether such an allocation is compatible with economic development goals, especially in lower-income economies (Hale et al. 2026). 

Our analysis builds on a long tradition of research on climate justice, burden sharing, and equitable access to environmental resources. In particular, we draw on the climate-equity framework developed by Mattoo and Subramanian (2012), the Greenhouse Development Rights approach of Baer (2013), and more recent work on national carbon-budget allocations by van den Berg et al. (2020) and Ganti et al. (2023), to adopt the principle of equal cumulative emissions per person. 

The idea of equal cumulative emissions per person is simple: every individual should have an equal claim on the atmosphere regardless of where they live. Countries that historically emitted more than their proportional share have effectively consumed part of the carbon budget that would otherwise have remained available to others. Countries that emitted less retain larger claims on the remaining budget.

Europe has accumulated substantial carbon debt

Using historical population and emissions data from 1870 onward, we calculate fair shares of the remaining carbon budget for 162 countries. For the global remaining carbon budget we adopt a temperature target of limiting warming to 1.5°C with 50% probability, which corresponds to a remaining budget of 500 GtCO2 (IPCC AR6, Table SPM.2). We apply a modest 2% per annum discount to older emissions to reflect both technological progress and the gradual decay of carbon dioxide in the atmosphere. The resulting allocations provide a quantitative measure of each country’s remaining claim on the global carbon budget. 

For EU member countries, the implications of this analysis are particularly profound. European countries played a central role in the Industrial Revolution and were among the earliest beneficiaries of fossil-fuel-based development. Consequently, many European economies have accumulated substantial carbon debt when assessed against an equal-cumulative-per-capita benchmark (Figure 1). Notable exceptions are Portugal and Spain, as well as Croatia, Latvia, and Romania. In contrast, most developing countries continue to hold positive carbon entitlements because their historical contributions to climate change have been much smaller.

Figure 1 Fair shares of the remaining carbon budget: EU

Notes: The figure shows each country’s fair share of the remaining carbon budget under the allocation principle of equal cumulative emissions per person. Fair shares are computed as the population-weighted claim on the global remaining carbon budget adjusted for each country’s historical carbon debt accumulated over 1870-2022. Historical emissions are discounted at an annual rate of 2%. Positive values indicate remaining emission space, while negative values indicate that a country’s historical emissions already exceed its equal per-capita allocation. Values are expressed in GtCO2.

Technological transfer can help developing countries grow within remaining carbon budgets

However, the existence of a positive carbon allocation for developing countries does not necessarily imply that development goals are easy to achieve. The key question is whether the remaining carbon budget available to these countries is large enough to support meaningful economic convergence toward advanced-economy living standards. To answer this, we examine the historical relationship between economic growth and carbon emissions and use it to simulate emission and development paths through 2050. The analysis reveals that given traditional development paths with emissions growing in step with the output, many developing countries would exceed their fair carbon allocations long before reaching advanced-economy income levels. 

This is not to suggest that development and climate goals are fundamentally incompatible. Instead, our results highlight the importance of technological progress: if we assume that developing countries gain access to technologies and production methods comparable to those currently used in advanced economies, the relationship between growth and emissions weakens substantially. In this technology-transfer scenario, countries such as Egypt, India, and Indonesia become much more capable of pursuing development while remaining within their fair carbon budgets. Nevertheless, technology transfer alone does not eliminate the tension between climate ambition and development. The gap narrows considerably but does not disappear. Additional solutions, including accelerated innovation, carbon-removal technologies, and carbon capture, would still be required.

Implications for Europe

These issues are important for Europe in multiple ways. On the one hand, Europe has built up carbon debt, as it has already consumed more than its proportional share of the global carbon budget. On the other, Europe has been an engine for innovation and has access to clean technology. Furthermore, Europe is proud to take a leading role in the climate transition and to look beyond national and EU borders, which is reflected in several initiatives, most notably the Carbon Border Adjustment Mechanism. In the next 30 years, Europe has an opportunity to reduce global emissions beyond its borders.

The Carbon Border Adjustment Mechanism is typically justified as a tool to prevent carbon leakage and maintain a level playing field between European firms and foreign competitors. While these objectives are important, the fairness of border carbon measures cannot be evaluated solely through the lens of trade competition or current emissions; historical responsibilities matter as well. Thus, the Carbon Border Adjustment Mechanism should be interpreted within a broader framework of carbon fairness and carbon debt. If countries with substantial historical carbon debt bear greater responsibility for supporting the global transition, then border carbon policies should be assessed not only by how effectively they prevent carbon leakage but also by how they contribute to sustainable development in the trade partners’ countries (see also the Greenhouse Development Rights framework proposed by [Baer 2013] and recent discussions of climate inequality by Chancel et al. [2024]).

One of the most promising ways to reconcile Carbon Border Adjustment Mechanism with climate fairness would be to link it explicitly to technology transfer and climate finance. Our simulations indicate that access to cleaner technologies substantially improves the ability of developing countries to combine economic growth with climate goals. Consequently, revenues generated through border carbon adjustments could potentially be used to support low-carbon industrialisation, infrastructure development, and innovation in countries whose future growth is constrained by limited carbon budgets. 

This is not a new idea: in many jurisdictions, including the EU, revenues from domestic emission mitigation policies are used to subsidise investment in green technology. These policies are aligned with the academic literature, which both theorises that optimal decarbonisation policies combine emission pricing with green subsidies (Bovenberg and de Mooij 1994, Goulder and Schneider 1999) and quantifies the impact of optimal policies (Fischer and Newell 2008, Acemoglu et al. 2012, Barrage 2020).

Figure 2 shows the remaining carbon budgets of the 15 countries from which the EU imported most in 2022, in sectors covered by the Carbon Border Adjustment Mechanism. This includes developed economies, such as the UK and the US, with substantial carbon debt. It also includes emerging countries such as China, Egypt, and India that exhibit positive carbon budgets.

Figure 2 Fair shares of the remaining carbon budget: Top-15 EU Carbon Border Adjustment Mechanism import partners (2022)

Notes: The figure shows the fair share of the remaining carbon budget under the allocation principle of equal cumulative emissions per person, for the 15 countries from which the EU imported most in 2022 in sectors covered by the Carbon Border Adjustment Mechanism. Fair shares are computed as the population-weighted claim on the global remaining carbon budget adjusted for each country’s historical carbon debt accumulated over 1870–2022. Historical emissions are discounted at an annual rate of 2%. Values are expressed in GtCO2.

In the case of Egypt and India, our climate fairness analysis shows that these countries can reach the average development standards of Western countries by 2050 while staying within their available carbon budgets, only if technology transfer helps them substantially decouple their economic activities from emissions. A framework in which the Carbon Border Adjustment Mechanism could facilitate or fund such a transfer could, thus, have a large impact on resolving the tension between different sets of Sustainable Development Goals.

More generally, our analysis highlights that issues of climate fairness and sustainable development should take more prominent roles within political discussions because of Europe’s direct exposure to affected countries through trade relationships. Countries that benefited most from using the atmospheric commons must also help create opportunities for those who are still pursuing economic development. Technology transfer, climate finance, and support for emissions-reducing innovation should therefore be viewed not merely as acts of solidarity, but as strategies to ensure peace and prosperity in Europe in the long run. For developing countries, the positive effect of technology transfer can go beyond reducing their carbon footprints because greenhouse gas emissions go hand-in-hand with air quality. In Vietnam, for example, air pollution is estimated to cost over $13 billion per year, about 4% of GDP, because of premature deaths and diseases, according to UNICEF.

Thus, Europe’s role in the climate transition extends beyond decarbonising its own economy, especially in the long run. Because Europe has already used more than its proportional share of the atmospheric commons, it bears a special responsibility to facilitate low-carbon development elsewhere. Technology transfer, climate finance, and a potentially redesigned Carbon Border Adjustment Mechanism that explicitly recognises principles of climate fairness could all contribute to that objective. Ultimately, the success of global climate policy coordination may depend not only on how emissions are reduced, but also on whether the transition is perceived as fair by countries whose future development opportunities are increasingly shaped by a shrinking global carbon budget.

Source : VOXeu