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.”
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”
Climate Change
Prospects for global green shipping deal boosted by US tariff ruling, analysts say
A recent US court ruling restricting President Trump’s ability to impose sweeping tariffs has improved the chances of an international deal to cut emissions from shipping, observers of UN maritime talks have said.
Government officials meeting at the International Maritime Organization (IMO) in London this week and next are resuming negotiations on a proposed set of measures known as the Net-Zero Framework (NZF), aimed at tackling the sector’s roughly 3% share of global greenhouse gas emissions.
Last October, Trump and his officials threatened any government voting to adopt provisionally agreed green shipping measures, known as the Net-Zero Framework (NZF), with tariffs that would make it harder for their businesses to export to the USA.
The intervention helped derail talks, with governments narrowly voting to postpone for a year the adoption of the NZF.
The framework, provisionally agreed in April 2025 after years of negotiations, would penalise the owners of particularly polluting ships and use the revenues to fund cleaner fuels, support affected workers and help developing countries manage the transition.
The delay plunged the future of the NZF into doubt. Vanuatu’s climate minister said the delay was “unacceptable” given the urgency of tackling climate change. A final decision on the NZF is not expected until November.
Tariff threat neutered
Since the last round of negotiations, the political landscape has shifted. In February 2026, the US Supreme Court ruled that Trump had no legal authority to impose sweeping tariffs without approval from Congress.
Rockford Weitz, professor of maritime studies at Tufts University, said that his officials would have “a more challenging time” using tariffs as threats at this month’s shipping talks than they did in October.
University College London professor Tristan Smith, a close observer of IMO talks, agreed that the tariff threat is “not quite as potent as it was last year”. He noted that the US also no longer benefits from the element of surprise. In October, Washington began lobbying governments only shortly before the talks, leaving little time for countries supporting the NZF to coordinate a response.
This time, Smith said supporters of the framework – which include most European countries, Pacific Islands and some African and Latin American states – are “working very closely together” to resist the US’s pressure.
He added that the US’s attempt to promote liquefied natural gas (LNG) as a transition shipping fuel, rather than renewable-electricity-based solutions like ammonia or methanol, by weakening the NZF has been undermined by the spike in the cost of gas triggered by the Iran war.
Attempts to re-negotiate
But divisions remain in the talks scheduled to run until Friday next week. Ahead of this round of negotiations, some governments have proposed re-negotiating the core tenets of the NZF, while others insist it should be adopted in November largely as provisionally agreed in April 2025.
This debate played out last week on a webinar hosted by the African Futures Policies Hub. Liberian diplomat Grace Nuhn said the emissions-reduction requirements included in the NZF are “over-zealous” and “over-ambitious” and do not reflect the limited availability of clean fuels, while penalising “transitional fuels” such as LNG and biofuels.
In a formal submission, Liberia – alongside US ally Argentina and Panama – has proposed weakening emission targets and ditching any funding mechanism for the framework involving “direct revenue collection and disbursement”.
Liberia and Panama host the world’s two biggest ship registries, meaning their governments earn revenue from allowing shipowners from around the world to register vessels in their countries.
The NZF would penalise owners of ships that emit more than certain agreed amounts and use that revenue to clean up the maritime sector, help workers through the green transition and compensate for any negative impacts of the transition on developing economies.
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Japan has also proposed that, in order to reach a compromise with the NZF’s opponents, emissions reduction targets and requirements to pay into the IMO’s Net-Zero Fund are weakened.
Yuki Inoue, a diplomat from Japan’s transport ministry, told the webinar that this would reduce the perception that the NZF is a “carbon tax”. Japan wants to get all governments “back to the discussion table”, he said.
NZF a “fragile compromise”
But Tuvalu’s IMO negotiator Pierre-Jean Bordahandy said that the NZF itself is a “fragile compromise” reached after lengthy discussions and is the “only viable path forward” to meet the sector’s climate targets agreed in 2023.
Tuvalu and six other Pacific nations have vowed to try to make the NZF more ambitious if it is reopened for negotiation. With rising sea levels threatening their survival, “time is not on our side”, Bordahandy told the webinar.
Brazil has also pushed back against attempts to renegotiate. Diplomat Adriana de Medeiros Gabinio warned that it would be unrealistic to expect countries to rewrite a deal in a matter of months after more than two years of negotiations involving over 100 nations culminated in the April 2025 vote in favour of the NZF.
She added that proposed changes to the NZF would not address climate change and food insecurity and “seem aimed at addressing diplomatic pressure imposed by a small group of countries rather than the issue itself”.

Mexico has defended the framework’s funding mechanism. Raul Zepeda Gil, an advisor to the country’s IMO mission, said the net-zero fund is essential to ensure developing countries can access financing for cleaner ships and infrastructure. Without the fund, “then just a few countries will be available to participate in the transition”, he warned
Some countries that previously supported delaying the NZF now appear more aligned with its backers. Kenya was among 16 African nations that voted for postponement last October.
But this month Michael Mbaru, maritime lead for the Kenyan government’s climate envoy office, told journalists that Kenya supports the NZF and hinted that other African and developing countries would follow.
“From the Global South perspective, as you’ve seen from the submissions from Africa, we are moving forward in terms of the framework as is”, he said, adding “we feel like we have compromised enough and we feel like the framework provides the best package.”
“If we are to reopen these discussions, we need to reopen them to strengthen the revenue, not to weaken the revenue”, he said.
Tacit or explicit approval?
Brazil’s Adriana de Medeiros Gabinio warned that even if the NZF is officially adopted in November, its opponents are trying to change the rules by which it comes into force as a “safety net to block” it.
The US and its allies want to shift away from a system of tacit approval where, after the NZF is approved at the IMO talks, its rules are automatically applied unless a certain number of countries object.
They prefer explicit approval instead, meaning it would not come into force unless enough governments – representing a certain percentage of the world’s shipping fleet – actively indicate support for it.
Critics say this change would give a small number of countries with large shipping registries the power to block implementation. Liberia has the world’s biggest shipping registry, which is run by a US-based company, followed by Panama and the Marshall Islands.
The Marshall Islands has long been one of the most vocal supporters of the NZF but, with its officials and its shipping registry income vulnerable to US retaliation, did not sign on to the recent Pacific proposal vowing to strengthen the NZF if it is re-opened.
Commenting on the chances of the NZF being approved, Smith said “there are lots of things which I think generally are much better and stronger than they were last year.”
“I can’t tell you now that that means we’re not going to have a difficult conversation and I can’t put odds on what the outcome is but I think things have improved on the energy transition question,” he said.
The post Prospects for global green shipping deal boosted by US tariff ruling, analysts say appeared first on Climate Home News.
Prospects for global green shipping deal boosted by US tariff ruling, analysts say
Climate Change
As Climate Disasters Create an Insurance Crisis, a California Bill Seeks to Make Fossil Fuel Companies Pay
Premiums “have gone through the roof” and insurers have been leaving the state as the costs of disasters soar amid worsening extreme weather.
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Climate Change
This week’s IMO green shipping talks are a test for multilateralism
Em Fenton is Senior Director of Climate Diplomacy at Opportunity Green, supporting climate-vulnerable countries in multilateral negotiations, such as the International Maritime Organization.
Governments are gathering in London over the next two weeks to advance the International Maritime Organization’s (IMO) Net-Zero Framework (NZF) in a global effort to reduce emissions from international shipping. The meeting may not make headlines outside climate circles, but what happens there matters far beyond shipping.
The international shipping sector underpins around 80% of global trade and contributes roughly 3% of global annual emissions.
The NZF represents the best, most equitable solution currently viable to address this issue and, last April, a large majority of countries voted to put it forward for formal adoption through the IMO’s process.
The framework is a compromise from the most ambitious possible design, but it still represents a hard-fought victory for multilateralism, with countries coming together to create a solution aimed at the global best interest and providing a solid foundation for a just and equitable transition.
It combines a technical fuel standard (setting emissions limits on the fuels used in ships) and an economic element that puts a price on emissions from international shipping.
A system under attack
With a global swing towards nationalism in recent years, some countries are increasingly placing domestic priorities over global climate action, despite legal obligations to act. And in doing so, they are overlooking the reality that abandoning multilateral decarbonisation efforts will ultimately exacerbate domestic challenges.
This trend is most notable the US’s withdrawal or removal of support from the Paris Agreement, the WHO and the UN Human Rights Council, but is also playing out in other areas, such as India’s decision to withdraw its bid to host COP33. All this begs the question: just how resilient is multilateralism in a period of intense geopolitical tension?
The system was built on two assumptions that now appear increasingly fragile: that countries would act through multilateral efforts in the collective interest; and that agreed action would be implemented at a scale and pace commensurate with need.
Coupled with this drift from its central purpose is an observable decline in its effectiveness across all five domains in which it operates – but most notably in climate action.
Because international shipping is inherently global and cannot be meaningfully regulated through unilateral or regional action, the IMO is one of the few institutions capable of delivering effective decarbonisation at scale. Failure to make progress at the IMO therefore sends a powerful signal about the limits of international cooperation more broadly, particularly on climate action.
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Within this context, progress has faced three distinct forms of resistance: rejection of the need for action, procedural delay or obstruction, and efforts to weaken outcomes to the point where ‘success is effectively meaningless.
At recent IMO meetings, these dynamics have become more pronounced, culminating in a successful move by the US and Saudi Arabia last October to delay the formal decision to adopt the NZF by a year.
The matter now sits in procedural limbo. This was further complicated by abstentions from two European Union countries (Greece and Cyprus), despite the broader EU’s support for adoption. Greece has subsequently affirmed their support for the US and Saudi position.
These procedural delays were accompanied by threats from the US administration of retaliatory measures, including tariffs, withdrawal of visa rights, or imposing fees on nationals visiting US ports.
Making the case for multilateralism
The stakes here extend well beyond shipping.
For multilateralism to remain meaningful, it must be able to produce binding outcomes – even when powerful states object. The IMO process is one of the few remaining forums where every country’s voice carries equal weight and no single state can exercise a veto.
If that process can be undermined through procedural delay and coercive pressure, it sets a precedent for other multilateral negotiations, particularly in climate governance.
This week in London, countries have a concrete opportunity to demonstrate that multilateralism still works – by being present in the room and actively supporting climate ambition.
This remains the most effective way to achieve climate goals, create the economic conditions for investment in the maritime transition, move away from an overreliance on fossil fuels, and protect the very foundations of multilateralism.
The alternative is not just a failure for shipping; it is a signal to every difficult negotiation that follows that obstruction works.
The post This week’s IMO green shipping talks are a test for multilateralism appeared first on Climate Home News.
This week’s IMO green shipping talks are a test for multilateralism
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