Who should be responsible for providing finance to address the impact of climate change? Under the Paris Agreement, it is developed countries that “shall provide financial resources to assist developing country Parties”. This has generally been understood to mean countries listed in Annex II of the UNFCCC, a list drawn up in 1992 that has undergone few amendments since. In the past, this list well approximated both responsibility for, and financial ability to address climate change, including rich, industrialised countries that consumed most of the emissions. The convention itself notes that the “largest share of historical and current global emissions of greenhouse gases has originated in developed countries”.
But the world has changed since 1992 and there are now frequent debates at climate talks over which countries should be responsible for providing climate finance, and central to this debate is the share of emissions accounted for by each country. Beynon et al (2026) demonstrate that annex II countries now account for less than half of all greenhouse gas emissions since 1850 whichever dataset you use. Many authors argue that this should be a key input into discussions of who provides climate finance.
However, others argue that it is inappropriate to focus on raw, cumulative emissions as this ignores population: obviously, countries with large populations emit more on aggregate, even if each individual in that country contributes little. Instead of focusing on total emissions, Hickel (2020) (and Fanning and Hickel (2023) in a later update) proposed allocating each country a CO2 budget based on population, and only counting emissions in excess of that budget towards responsibility for climate change.
In a new CGD note, I use the latest data to demonstrate that even allowing for this CO2 budget, it no longer makes sense to ignore the impact on of non-annex countries on the climate such as China and the Gulf States, which have now emitted CO2 well in excess of their budget. Annex II countries account for between 60-66 percent of excess emissions (depending on whether you use consumption based or territorial emissions), and this ignores the substantial impact of other gases such as methane, which tips the balance even further away from Annex II.
None of this absolves Annex II countries. They still account for a share of excess emissions hugely disproportionate to their population shares, and many are continuing to expand and subsidise their use of fossil fuels, exacerbating the problem. Their climate finance provision has been inadequate, unambitious and plagued with doubts about how relevant it is to climate goals, leading to accusations of gaslighting. But the annex lists no longer reflect the world that we are in, and states in the Gulf and China should no longer be exempt from climate finance obligations.
