The world's climate bill is mounting. But who should really foot the cost?

Europe grew rich burning fossil fuels. India is still trying to catch up. And when climate disasters strike poorer countries, the bill often lands on those least able to pay.What would you do if someone spent two centuries getting rich by polluting the atmosphere, then handed you a bill for cleaning it up? That, in essence, is the question Commerce minister Piyush Goyal put to Europe in Berlin. His argument was blunt: Countries that industrialised early should not expect developing economies to bear the same costs of tackling climate change.In Nepal, communities were still counting the cost of a devastating flood triggered by a collapse of rock and glacier ice on August 26. Thousands were dead or missing. Bridges, roads and hydropower projects lay damaged. Nepal estimated that recovery and reconstruction would cost $4.71 billion, even though its contribution to global emissions has been tiny.So who pays? Is it the United States and Europe, which grew wealthy while burning coal and oil? Is it China and India, whose emissions now matter enormously to the future of the planet? Or should countries such as Nepal receive help simply because they cannot afford to recover from disasters of this scale?Europe's climate bill comes dueSpeaking at the Berlin Global Dialogue on October 22, Goyal challenged European participants over the continent's historical emissions and its demands for faster climate action from developing countries.

"The problem was caused by you," he said, arguing that wealthy economies had benefited from cheap fossil fuels while the consequences were increasingly falling on poorer countries.His complaint was also about trade. Since January 1, the European Union's Carbon Border Adjustment Mechanism (CBAM) has entered its definitive phase. It requires importers to account for emissions embedded in certain goods, including steel, aluminium, cement and fertilisers.The EU says the measure prevents companies from moving production to countries with weaker climate rules to avoid paying a carbon price. Goyal sees a different problem: Indian manufacturers could face additional costs while competing against European producers with greater resources to invest in cleaner technology.He also questioned whether wealthy countries had delivered the financial support they promised developing economies. His argument was that asking poorer countries to decarbonise faster makes little sense if they cannot afford the technology needed to do so.There is a serious question here. Can a climate policy be fair if the same rules impose very different costs on countries with vastly different incomes and industrial capabilities?A mountain collapses, and the bill runs into billionsOn August 26, a huge mass of rock and glacier ice collapsed from Langtang Lirung near the Nepal-China border. The debris triggered a devastating flood along the Bhote Koshi and Trishuli river systems. According to Nepal's disaster authorities, 1,455 people had died and 5,285 remained missing by October 5.The disaster caused an estimated $2.7 billion in damage and economic losses. Recovery and reconstruction needs were put at roughly $4.71 billion.Did climate change cause the collapse? A scientific assessment by World Weather Attribution, published on September 17, offered a more careful answer. Warming was a destabilising factor, likely weakening the rock wall as temperatures rose and ice within fractures thawed. Geology and the region's history of earthquakes also mattered.Not every disaster can be attributed solely to climate change. But a warming climate can increase the risks faced by communities that have little capacity to move away from dangerous terrain or rebuild after a catastrophe.On October 22, the UN's Fund for Responding to Loss and Damage provisionally set aside $21.6 million for Nepal. The sum includes $20 million for potential assistance and $1.6 million in oversight fees. Nepal must still submit a funding request for consideration by the fund's board.Even if the assistance goes ahead, it will cover less than 0.5 per cent of Nepal's estimated recovery bill. The country now faces an uncomfortable choice: find the money elsewhere, borrow more or leave some of the damage unrepaired.

The historical numbers are hard to ignore

A Carbon Brief analysis published on January 8, estimated that the United States had emitted 542 billion tonnes of carbon dioxide since 1850, accounting for more than a fifth of the global cumulative total under its methodology. China ranked second with 336 billion tonnes. The 27 EU member states together accounted for about 12 per cent.

These figures include emissions from fossil fuels, cement and land-use change. They also help explain why historical responsibility matters. Carbon dioxide does not disappear when a factory closes or a power station switches off. A substantial share of the gas released decades ago continues to contribute to global warming.Britain's colonial history adds another dimension. A Carbon Brief analysis published in November 2023 estimated that the UK's share of historical emissions rose from about 3 per cent to 5.1 per cent when emissions associated with 46 former colonies were attributed to British rule. India accounted for the largest share of those additional emissions.Countries that industrialised early enjoyed the benefits of fossil-fuel-powered growth for generations. Many developing countries are now being asked to modernise their economies under tighter carbon constraints.But there is another side to the bill. China's emissions have surged alongside its rise as an industrial powerhouse. India is also among the world's largest annual emitters. The past explains why countries have different responsibilities, but it cannot make today's emissions irrelevant.India's case is strong, but it's not that simpleGoyal said India represents about 17 per cent of the world's population but contributes less than 3 per cent of global carbon emissions. That figure needs context.According to Our World in Data, using the Global Carbon Budget 2025, India accounted for about 8.27 per cent of global fossil-fuel and industrial carbon dioxide emissions in 2024. It was the world's third-largest emitter by this measure, behind China and the United States.The per-person comparison, however, supports much of India's argument. In 2024, fossil-fuel and industrial CO₂ emissions averaged 2.2 tonnes per person in India, compared with 5.39 tonnes in the EU and 14.2 tonnes in the US. The average EU resident therefore accounted for about 2.45 times India's per-person emissions under this measure.These figures exclude emissions from land-use change. They also measure emissions produced within national borders, rather than adjusting for emissions embedded in traded goods.India's large population means its total emissions are substantial, even though its average person emits far less carbon than the average American or European."A fair framework would combine historical contributions with present-day emissions, per capita consumption, development needs and the ability to pay. It should also distinguish between emissions produced domestically and those generated to manufacture goods consumed elsewhere," B L Shukla, professor at Indira Gandhi Tribal University said.Researchers have tried to calculate the debtCan historical responsibility be translated into money? Researchers have attempted exactly that.A 2023 study in Nature Sustainability by Andrew Fanning and Jason Hickel, titled Compensation for atmospheric appropriation, developed a model to calculate what countries that had exceeded their fair share of the carbon budget might owe those that had stayed within theirs.The study tracked emissions across 168 countries from 1960 and modelled a scenario in which all countries reached net zero by 2050. Even under that ambitious scenario, the researchers found that wealthy countries in the Global North would collectively use three times their fair share of the remaining 1.5°C carbon budget.Their model estimated that compensation owed to countries in the Global South could reach $192 trillion by 2050, with average annual payments of about $940 per person across recipient countries.While that is an extraordinary figure, it is also important to understand what it is not. It is not a bill recognised by governments or an amount countries have agreed to pay. It is a model based on assumptions about a fair distribution of the carbon budget and the cost of excess emissions.Still, the research asks an uncomfortable question: Should countries that have used more than their fair share of the atmosphere's limited capacity to absorb carbon help finance the transition of countries that have used less?The International Court of Justice's advisory opinion of July 2025 added a legal dimension. The court examined states' obligations under international law and the potential consequences of breaching them, including reparation where the legal requirements are met. It did not order countries to pay a fixed amount or establish an automatic right to compensation after every climate disaster. But it gave vulnerable countries a more substantial legal basis for pursuing their claims.Promises are not the same as money in the bankGoyal also criticised wealthy countries over their pledge to provide $100 billion in annual climate finance to developing countries.There is an important correction to his claim that the money never arrived. The target, agreed in 2009 for delivery by 2020, was missed by its original deadline. But OECD figures published on May 21, 2026 show that developed countries provided and mobilised $132.8 billion in 2023 and $136.7 billion in 2024. The $100 billion target was first exceeded in 2022.The argument, therefore, is not that no money has been provided. It is whether the funding is sufficient, accessible and affordable.Much climate finance comes in the form of loans, which must be repaid. Loans can finance useful projects, but they can also increase the burden on countries already struggling with debt. A country that has to borrow to build flood defences and then borrow again to rebuild after a disaster faces a difficult cycle.At COP29 in November 2024, countries agreed to a new goal of at least $300 billion a year in climate finance for developing countries by 2035, with developed countries taking the lead. They also called for efforts to scale up finance from all sources to $1.3 trillion annually by 2035.The challenge is turning these targets into money that reaches vulnerable communities quickly, rather than leaving them waiting while homes, roads and livelihoods remain in ruins.So who should pay?The climate debate often gets stuck on a familiar argument: Who polluted more, who is developing faster and who should sacrifice what. But for a country like Nepal, the consequences are not theoretical. A destroyed bridge cannot be rebuilt with a historical emissions chart. A family that has lost its home cannot wait for the next climate summit to settle a dispute over responsibility.Europe cannot escape its historical role in creating the crisis. India cannot ignore the weight of its emissions today. And countries such as Nepal cannot be expected to shoulder a multibillion-dollar recovery bill largely on their own. Climate justice will mean little if it asks vulnerable countries to prove, disaster after disaster, that they deserve help.Goyal's challenge to Europe is therefore only part of the argument. The harder test is whether countries that demand accountability are prepared to accept it themselves. The atmosphere may not distinguish between a tonne of carbon emitted in London, Beijing or Delhi. But a fair climate deal must distinguish between those who can afford to pay, those who helped create the problem and those who are already paying for it.