The independent think tank ODI has developed a set of criteria to determine each country's fair share of climate finance. According to their calculations, Italy should be contributing over $4.6 billion per year.
Recalculating Climate Finance
Along with other advanced economies, Italy reached the $100 billion annual climate finance target in 2022. However, Rome contributed less than its fair share: the resources provided amount to only 72% of its “fair share.” Italy contributed $3.35 billion, but considering its historical contribution to the climate crisis and other economic factors, it should have paid $4.63 billion.
Moving towards the new post-2025 climate finance goal
Why is it important to consider the concept of “fair share” in climate finance?
So far, the international target set in 2009 has been cumulative. The agreement specifies only the total amount—$100 billion per year by 2020—but does not detail the share each country should contribute. This leaves complete discretion to individual states.
However, precisely defining the fair share of climate finance becomes a key tool for shaping the new global target, which will be a central theme at this year’s COP29 in Baku, Azerbaijan. The “new collective quantified goal” (NCQG), set to take effect from 2025, will replace the $100 billion annual target and could look very different from its predecessor. Negotiations are now focusing on how to broaden the base of donor countries.
This is where the concept of “fair share” comes into play. Depending on how it is defined, fair share can be used as a benchmark to determine who should contribute and with how much, ensuring transparency for all parties at the negotiation table. Many wealthy countries want those who are currently exempt from climate finance contributions, but have the capacity, to start contributing. Developing countries (and China), on the other hand, demand that rich nations pay according to their historical responsibilities, not just based on current emissions levels.
Criteria for a “fair share” of climate finance
According to the Overseas Development Institute (ODI), an independent think tank, the “fair share” of climate finance—and thus a burden-sharing agreement within the NCQG framework—could be built using three criteria:
- GDP, used as an indicator of a country’s ability to pay.
- Cumulative CO2 emissions since 1990, as a measure of historical responsibility for the climate crisis.
- Population, to adjust the share, ensuring that responsibility is fairly distributed per capita among residents of developed countries.
In a report published in early September, ODI outlines this mechanism and calculates climate finance’s “fair share” based on consolidated data from 2022 and the old $100 billion target.
Only 12 countries have contributed an amount equal to or greater than their fair share, representing about half of the total. The top performers are Norway and France, contributing more than twice their fair share. Denmark, Sweden, Luxembourg, and Germany contribute 1.5 times their fair share, while Switzerland, Japan, the Netherlands, Austria, Belgium, and Finland exceed 100%. Italy is the first country to fall short, reaching only 72%, alongside Canada. Worse performers include the UK (68%), Australia (46%), and the United States (32%).
According to ODI’s criteria, the United States is the country that should contribute the largest share, at $44.6 billion, followed by Japan ($10.86 billion), Germany ($8.16 billion), the UK ($5.8 billion), and France ($5.26 billion). Italy ranks 6th with a fair share of $4.63 billion, just ahead of Canada with $4.33 billion.
Read ODI’s report on the fair share of climate finance here.
