December 2, 2023
Low-income and lower-middle-income economies are responsible for only a small portion of global carbon emissions, but they bear a disproportionate burden of the adverse effects of climate change. These countries are faced with numerous challenges to their efforts to mitigate carbon emissions. There is a considerable disparity in the availability of knowledge and technologies that are crucial for both mitigation of and adaptation to climate risks, and advanced economies, aiming to protect private sector interests, are reluctant to promote technological transfer. There is also a lack of funding and capital flows necessary for climate adaptation and the transition to a low-carbon economy. Furthermore, sovereign debt heavily constrains low and middle-income countries from using debt or bond financing for climate change challenges.
This workshop had the goal of creating a better understanding of — and possible solutions for — the challenges faced by low- and middle-income economies due to climate change.
This workshop focused on the following themes:
- Gaining a better understanding of how various macroeconomic factors are related to the production of CO2 emissions.
- Identifying the types of climate disasters and damages that can be expected to occur in certain regions and countries. This will inform region-specific consequences of climate change, such as water scarcity, diminished agricultural yield, increased frequency of extreme weather events, and lower economic growth. All these factors contribute to additional challenges such as mass migration, heightened geopolitical tensions, and an increased wealth gap between high- and low-income economies.
- Low- and middle-income economies are faced with a trade-off between economic growth, which still mostly relies on fossil-fuel use, and lower emissions. We discussed the tradeoffs between climate protection and economic growth.
- What role can various sectors play in adapting to and mitigating the impacts of climate change? What are the private sector dynamics concerning new renewable energy technologies? Can the financial sector be of help in funding the transition to low-carbon economies? Does high indebtedness and other economic indicators hamper the flow of funds (given higher perceived risks)? Can there be a stronger role for the public sector, for example with climate-related infrastructure investments and fiscal/monetary policy? Finally, what are the distributional impacts of climate policies?