Per capita carbon consumption is vastly lower in Low- and Middle-Income Countries (LMICs) than in the OECD, and yet the burden of climate change is projected to fall almost entirely on these countries, where most of the world’s poorest live. In this report, we propose a bold new vision for international climate cooperation with a proposed accord that would provide unrestricted climate finance compensation from OECD countries to LMICs in exchange for the adoption of carbon pricing.
The proposal’s starting point is a transparent method to assess damages from the OECD’s current CO2e emissions on LMICs, based on their projected impact of climate change on mortality. We then propose a “grand bargain” wherein LMICs who agree to introduce carbon pricing mechanisms would be eligible to receive damage compensation commensurate with these costs. The bulk of the funds would be distributed directly to citizens and communities as cash transfers, according to simple, parametric rules. We discuss potential avenues to raise funds for these transfers, by closing international tax loopholes, notably on richest people and corporations.
Most broadly, this proposal offers an opportunity to right the harms of the OECD’s emissions on LMICs and make LMICs, who are projected to account for the great majority of future emissions, willing partners in the global project to take climate action everywhere.
Last, our proposal is a concrete response to the COP30 President-designate’s October 2025 call for the international community to scale up global adaptation action through a strategic mix of finance and international cooperation, and to implement ambitious adaption solutions for the world’s poor in LMICs.
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