Background Paper Forum Climate Economics 9
This background paper presents scientific findings that focus on the fundamental challenges resource-rich countries face with respect to decarbonizing their economy. It shows a rather skeptical assessment of the current climate ambition levels of many of these countries as well as of the expectations with respect to reaching not only the current NDCs but also climate neutrality in 2050. To overcome their resource dependencies, these countries need economic perspectives beyond fossil fuel exports. Economic diversification can be a means to reduce the dependency and volatility risk from the resource sector and to profit from higher value added in, for example, manufacturing. Different policy options are presented that aim at incentivizing higher climate ambitions and address the demand as well as the supply of fossil fuels. Especially low-income resource-rich countries will, however, need further measures to enable and incentivize them to increase their climate ambition.