High levels of national debt in parts of the Global South could hinder efforts to move away from fossil fuels, a new report warns, as more than 50 countries gather this week in Colombia for the First Conference on Transitioning Away from Fossil Fuels.
The report, published by the Fossil Fuel Treaty Initiative in the lead-up to the flagship conference, argues that the current debt architecture is trapping developing countries in a “feedback loop” in which fossil fuel revenues are needed to service debt, while fossil fuel expansion locks countries into borrowing even more.
The cycle, according to the report, leaves very little fiscal space for highly indebted countries to end their reliance on coal, oil and gas revenues, even when their leaders want to phase out fossil fuels. This is the case for some first-mover countries such as Colombia, which is hosting the conference in Santa Marta.
Amiera Sawas, one of the report’s authors and head of research and policy at the Fossil Fuel Treaty Initiative, said the conflict in the Middle East is making this “debt injustice and fossil fuel entrapment” even more evident.
“What we have to start understanding is that both fossil fuels and debt are actually extractions from the Global South,” Sawas told the report’s launch during the World Bank and International Monetary Fund (IMF) Spring Meetings in Washington DC this month. “Many countries are paying more in debt servicing than they are getting in climate finance.”
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Since 2010, low and middle-income countries (LIMCs) have more than doubled their external debt, reaching an all-time high of $8.9 trillion two years ago. They paid about $415 billion in interest on that debt in 2024 – 2.4 times higher than a decade earlier.
At the same time, in some cases like Colombia, Egypt and Jordan, austerity measures agreed as part of IMF and World Bank loan programmes restrict governments from investing in cleaner sources of revenue like renewable energy, the report says.
Leading countries constrained by debt
Colombia – one of the countries leading the global call for a transition away from fossil fuels – is facing precisely such financial barriers to achieving its transition, said Camilo Rodríguez, another of the report’s authors and a research analyst with Oil Change International.
The country has halted all new oil and gas licences and published an energy transition plan estimating transition costs at about 7-10% of its GDP. Yet the government depends on fossil fuel revenues to service its $265-billion public debt, meaning it must find an alternative source of income to cover debt payments.
Rodríguez said debt “is the main barrier nowadays to promote the energy transition and the industrialisation of the economy”.
The South American country has only grown more dependent on fossil fuels over time, as they represented 36% of exports in 2001 and now account for about 52%. Austerity policies still in place after IMF loans have left very little room for investing in Colombia’s energy transition plan, the report says.
Other countries have shown similar patterns. Jordan – despite its staggering public debt equivalent to 90% of GDP – became one of the fastest-growing markets for wind, solar and electric vehicles in the Middle East region. From 2014 to 2021, Jordan went from less than 1% of its electricity generation coming from renewables to 26%, benefiting from the significantly cheaper costs of installing wind and solar power compared with adding fossil fuel capacity.
But Jordan’s high reliance on fossil fuel revenues created an incentive for policymakers to opt for expanding gas projects over renewables, and the country ended up suspending new licences for many solar and wind projects. In 2024, about 40% of government revenues were used to service debt.
“This is not marginal – it is central to the fiscal system. It creates what I would describe as structural fiscal addiction,” said Ali Nasrallah, a policy and research manager at the Fossil Fuel Treaty Initiative. “The state depends on revenues from consumption that is economically, environmentally and socially harmful.”
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Another report by the Fossil Fuel Treaty Initiative, published in March, argues that debt entrapment in Africa also exacerbates gender injustice. Social consequences from fossil fuel extraction and use – such as displacement of communities or health harm from pollution – can have a substantial effect on local women while, at the same time, states face constraints to increasing social spending to support them.
“African women are facing disproportionate impacts of the fossil fuel industry’s long-running legacy of violence and dispossession,” the report says. “But they are also leading the resistance to it,” it adds, with women-led coalitions in places like Uganda or the Niger Delta challenging major oil and gas projects.
Policy recommendations
As governments head to Santa Marta – where “gaps in the financial and investment system” are on the agenda – the Fossil Fuel Treaty Initiative recommends building international coalitions to address debt, reforming multilateral financial institutions and increasing funding commitments from donor nations.
The proposed policies include debt cancellation as a way of creating fiscal space in the Global South, ending all international finance for fossil fuel expansion, establishing a binding mechanism on debt resolution at the UN, and advancing green industrialisation to replace fossil fuel revenues.
“To dismantle carbon lock-in and debt at source, we need to recognise collectively that the escalating debt in the Global South is actually an injustice,” said Sawas of the Fossil Fuel Treaty Initiative. “We have to name the problem and be honest with ourselves – and that’s where the recommendation of debt cancellation is so critical.”
Comment: Broken debt system must be fixed to confront future climate shocks
As part of the new climate finance goal adopted at the COP29 climate summit in Baku, governments have already agreed to “remove barriers and address dis-enablers” faced by developing countries, including “limited fiscal space” and “unsustainable debt levels”.
Building on this, any plan for a global roadmap for transitioning away from fossil fuels, such as the initiative proposed at COP30 by more than 80 governments, should address the debt crisis in the Global South, Sawas said. One alternative could be financing the rollout of renewables with more public grants rather than loans, she added.
“We need to start properly funding renewable energy and diversification,” she said. “Currently it’s almost impossible for a lot of countries in the Global South to actually make the energy transition, because there’s no support structure.”
The post To phase out fossil fuels, developing countries need exit route from “debt trap” appeared first on Climate Home News.
To phase out fossil fuels, developing countries need exit route from “debt trap”
Global fossil-fuel emissions are set to fall by around 0.5% in 2026 amid the fallout from the Hormuz crisis, according to Carbon Brief analysis.
The US-Iran war has severely disrupted trade through the strait of Hormuz, causing a spike in oil and gas prices that continues to ripple around the global economy.
Each month of disruption – and each new flashpoint, such as in Yemen – is increasing the incentive to switch to alternatives.
Those alternatives include coal, with the latest forecasts pointing to a 1.2% rise in coal demand this year – apparently supporting media claims of a “return to coal” in the wake of the crisis.
Yet Carbon Brief’s analysis shows the rise in emissions associated with this increased coal use, much of which is unrelated to Hormuz, is set to be more than offset by declines for oil and gas.
The estimated overall impact on carbon dioxide (CO2) emissions from fossil fuels in 2026 is shown in the figure below and amounts to a reduction of around 0.5% from 2025 levels.
(Fossil fuels account for two-thirds of global greenhouse gas emissions.)
The emissions estimates for each fossil fuel are based on the latest forecasts from the International Energy Agency (IEA) for coal, oil and gas, in light of the ongoing global energy crisis.
For example, the agency initially estimated that global coal demand would decline this year. In its 2025 coal report, published in mid-December, it said that declining coal demand in China would outweigh the impact of pro-coal policies under US president Donald Trump.
In contrast, the latest update, published in September 2026, said that global coal demand would rise by 1.2% in 2026, instead of the small decline that had been expected.
The report highlighted the boost to coal demand from higher gas prices in the wake of Hormuz. However, there are limits to this, because few countries can switch from gas to coal at large scale.
The IEA’s latest report also noted the role of a strong El Niño, which is pushing up the need for cooling and depressing hydropower output in key markets. Other short-term factors are also affecting coal demand this year, including a rising amount of “wasted” wind and solar in China.
For gas, the IEA did not initially update its previous forecast that global gas demand would rise by 2.0% in 2026, which had been published in January of this year.
Its most recent forecast – published in July – already pointed to a 0.6% drop in demand in 2026. Since then, pressure on gas demand from high prices has only grown stronger.
For oil, there has been an even more dramatic shift in forecasts since the start of the year.
In its January 2026 oil market report, the IEA forecast a rise in demand in 2026 of 930,000 barrels per day (bpd). As shown in the figure below, this has been steadily revised downwards over the course of the year, as the Hormuz crisis was first ignited – and then extended.
By September, the IEA was forecasting a 2,500,000bpd drop in oil demand in 2026, equivalent to a reduction of 2.4% from 2025 levels.
(A 15 September research note from Morgan Stanley, not available online, found a “consensus” forecast of a 2,415,000bpd drop in demand in 2026.)
While there are many short-term factors at play in the shifting forecasts for 2026, it is clear that the latest energy crisis will also affect fossil-fuel demand in the next year and beyond.
For example, whereas the IEA initially forecast that oil demand would rebound in 2027 to well above 2025 levels, it is now expecting use of the fuel to be effectively flat for two years.
This puts a question mark over its previous expectation – published in October last year – that global oil demand would not peak until as late as 2030.
“For every month the conflict lasts, the probability of permanent [oil] demand destruction increases,” wrote Sverre Alvik, vice president at consultancy DNV in a late August analysis.
As fuel prices have surged, electric vehicles (EVs) have captured record shares of major car markets, from Australia and China through to Europe, Indonesia and Thailand.
In July, EV sales nearly doubled year-on-year in “new markets”, noted Alvik, pointing to countries outside China, Europe and North America.
The IEA says the 2027 outlooks for coal and gas are interdependent, with coal demand potentially increasing again if gas prices remain elevated – or dropping back if gas prices ease.
At the same time, governments in countries that had planned to rely on imports of liquefied natural gas (LNG) have been signalling shifts towards favouring domestic clean energy instead – or continuing to use coal for longer.
The current crisis, therefore, has the potential to not only lower fossil-fuel use and emissions in the short term, but also on a more lasting basis.
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The post Analysis: Global fossil-fuel emissions set to fall in 2026 amid Hormuz crisis appeared first on Carbon Brief.
Analysis: Global fossil-fuel emissions set to fall in 2026 amid Hormuz crisis
Aviation is on track to be responsible for 80% of the UK’s carbon dioxide (CO2) emissions by 2050, according to the Climate Change Committee (CCC).
Emissions from flying have more than doubled since 1990 – driven by rising passenger numbers – even as the climate impact of every other sector in the UK economy has fallen.
The UK does not have “credible” policies in place to reverse this trend of rising emissions, says the CCC in new advice to the government on future aviation policy.
The government has signalled its support for expanding Heathrow, the nation’s largest airport, while relying on “techno-fixes” such as “sustainable aviation fuels” (SAFs) to cut emissions.
Yet, even without Heathrow expansion, the CCC says aviation emissions are on track to be higher in 2050 than they are today – reaching 38m tonnes of CO2 (MtCO2).
As the chart below shows, this would account for most of the remaining CO2 from the UK economy, all of which would need to be removed from the atmosphere in order to meet the legal target of net-zero emissions.
Expanding Heathrow would add another 2.4MtCO2 in 2050, amounting to around 5% of all the UK’s emissions. (This would increase to 4.5MtCO2 when expansion is complete in 2054.)
With a final decision on Heathrow expansion expected by 2029, the government asked the CCC for its advice on whether the plan is compatible with the UK’s climate targets.
The CCC has concluded that the UK simply lacks sufficient policies to reduce aviation emissions and “expanding Heathrow would compound the problem”. In a press briefing, CCC chair Nigel Topping told journalists:
“The UK does not currently have a credible plan to reduce [aviation emissions] in line with net-zero, so that creates a serious challenge for meeting our climate commitments.”
The “jet-zero strategy”, launched by the previous Conservative government in 2022, set out plans to cut aviation emissions. However, the Labour government has since accepted that the strategy’s expectations for SAFs, electric planes and fuel-efficiency improvements were unrealistic.
The CCC says a “credible and robust net-zero policy framework for aviation” should be set out in a revised strategy, which is planned for 2027. Only then could Heathrow expansion be aligned with the net-zero goal, adds the committee.
As part of this new strategy, the CCC says the “aviation sector needs to take responsibility for its emissions”. It says policies should be designed based on the “polluter pays” principle, requiring the aviation industry to fund its own SAFs and CO2 removal.
Specifically, the committee says funding will be needed for “engineered removal” technologies, such as direct air carbon capture and storage (DACCS).
These technologies are currently “not yet available at the scale required”, but are vital for the kind of permanent CO2 removal needed to mop up aviation emissions, says the CCC.
(“Natural solutions” such as tree planting are the other main way CO2 is expected to be removed from the atmosphere. However, the CCC envisages these removals offsetting the remaining methane emissions from livestock agriculture in the UK, whereas it says “engineered removals” would be required to remove and store CO2 from flights.)
The CCC acknowledges that placing decarbonisation costs on airlines would likely lead to higher ticket prices. It estimates that this could mean an increase, in 2024 prices, of around £150 for a return trip to Alicante, Spain, and £400 for a return trip to New York by 2050.
However, it says this is preferable to a public spending approach, which would result in the roughly 50% of the population who do not fly paying for flight-related CO2 removals.
In addition, the committee notes that higher costs would help to manage demand for flights, which would otherwise be expected to increase considerably over the coming decades.
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The post CCC: Heathrow expansion could push flights to ‘80% of UK emissions by 2050’ appeared first on Carbon Brief.
CCC: Heathrow expansion could push flights to ‘80% of UK emissions by 2050’
A fifth of the world’s greenhouse gas emissions are linked to international trade in goods and services, a new tracker shows, spotlighting a little-studied issue that researchers say should be tackled by the UN climate process.
Currently, as part of the Paris Agreement, every country is responsible for counting and reducing the planet-heating emissions that are produced within its territory. Manufacturing countries, for example, may have high emissions even if what they make is exported for consumption elsewhere.
But new analysis from the European Climate Foundation (ECF) and climate consultancy Matière, based on the tracker’s data, shows that some countries have a high footprint of “imported emissions” from goods and services they ship in. These emissions are often ignored in the places where the products are consumed because they are not formally counted under greenhouse gas inventories.
In the European Union, for example, while domestic emissions have declined since 2015, imported emissions have remained unchanged, the analysis shows. In some countries, like Austria or Sweden, they are as high as the country’s entire annual carbon footprint.
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Former EU lead climate negotiator Jacob Werksman said that under the Paris Agreement, these traded emissions are accounted for in the countries where they are originally produced, but importing countries can also take responsibility for their consumption.
“It starts with a wide recognition by many jurisdictions around the world that we need to know the carbon content of these products, and we then need to agree what is a fair, effective, transparent and relatively easy-to-implement way of measuring that carbon in traded products,” he told a launch event for the trade emissions tracker, which contains data for different countries, sectors and gases.
Trade and its role in addressing climate change has become a higher priority at UN climate talks after a push led by emerging economies including China, India and South Africa led to the first trade and climate change dialogue held this year at the mid-year session in Bonn.
At the upcoming COP31 UN summit in Antalya, some voluntary initiatives like the Brazil-led Integrated Forum on Climate Change and Trade are expected to continue, but the issue does not feature in Türkiye’s Action Agenda of climate initiatives and formal negotiations are not scheduled on the topic.
China: the world’s top emissions exporter
As a manufacturing powerhouse, China ranks first in the new tracker as the world’s top-emitting country, but the data shows that a large chunk of the country’s carbon emissions – an amount larger than Brazil’s entire annual carbon footprint – are linked to products that are exported and consumed abroad.
Russia, Brazil, the US and the EU rank as the top destinations for Chinese trade-related emissions, which are mostly linked to components for power generation, basic metals like copper and lead, and non-metallic minerals like graphite and phosphorus.
Yet China is also the world’s top emissions importer, related mostly to agricultural products, fossil fuels and minerals brought from the US, the EU, Japan and India, among others. The US ranks second by a close margin, with both countries importing about 1.6 billion tonnes of CO2 equivalent.
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Richard Baron, ECF’s industrial policy and trade director, said Chinese clean energy products are key for reducing emissions around the world, adding that Europe is “not able to do without those technologies” for its energy transition.
“China has an emissions trading system that counts CO2 differently there. But if China and the EU were to agree on some kind of translation mechanism to say ‘this is how we measure it’, and companies can understand the protocol to navigate both markets, that would set the tone for a lot of other conversations,” he said at the platform’s launch event last week.
The analysis suggests that if the EU and China aligned their climate requirements for products, the resulting standards could influence trade flows representing about 7% of global emissions.
Baron said there’s “a plethora” of multilateral spaces to hold these discussions, including the climate and trade dialogue at the UN climate talks or the Climate Club at the Organisation for Economic Co-operation and Development (OECD), which seeks to cut industrial emissions.
Trade breaks into agenda of UN climate talks – but will it have teeth?
Controversial trade measures
Instruments like the Europe’s Carbon Border Adjustment Mechanism (CBAM) – a recent piece of legislation that penalises emissions-heavy imported products – are one tool that could be used to address trade-related emissions, said Antoine Oger, executive director at the Institute for European Environmental Policy.
He said a significant portion of imported emissions in Europe are already covered by CBAM, as it includes sectors like cement, iron and steel, fertilisers and aluminium. This then allows the EU “to engage in constructive dialogue with our trade partners”, he added.
But across diplomatic summits, including at UN climate talks, emerging economies have pushed back heavily against the CBAM and other trade measures. The most recent BRICS declaration adopted on Saturday by 11 such countries – including China, India and Russia – condemns “protectionism under the guise of environmental objectives”.
The declaration calls for the “elimination of such unlawful measures”, which they argue have “far-reaching negative implications for the human rights, including the rights to development, health and food security” of vulnerable communities.
“The question of responsibility is a political question,” Oger said. “These emissions exist – they are emitted somewhere to make a product that will be consumed elsewhere. So you can debate responsibility but the idea is for the two parts to recognise there’s a problem.”
The aim, he added “is not to point fingers, but to accept this is a reality of our emissions profiles and ask what we can do about it”.
The post International trade linked to 20% of global emissions – but imports ignored appeared first on Climate Home News.
International trade linked to 20% of global emissions – but imports ignored
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