AISESA Webinar: How can fossil fuel-producing LMICs drive their development in a carbon-constrained world?

The discussion emphasized the urgent need for low- and middle-income countries (LMICs) that rely on fossil fuels to navigate a complex transition towards decarbonization while ensuring sustainable development. These countries face unique challenges due to their dependence on fossil fuel revenues, and must adopt context-specific strategies for diversification to achieve holistic progress toward the Sustainable Development Goals (SDGs) in a low-carbon world.

The transition involves a "triple diversification challenge": first, diversifying energy systems to move away from fossil fuels and reduce carbon footprints; second, economic diversification to reduce reliance on fossil fuel revenues; and third, ensuring equitable diversification in fossil fuel production to manage the social and economic impacts of the transition fairly, especially for those most affected by the decline in fossil fuel production.

Recognizing that each country’s challenges and strategies vary depending on factors like fossil fuel reserves, market focus, and development stage, it is clear that development pathways must be tailored to local contexts. Global solidarity and support are essential in this process, with efforts focused not only on scaling up climate finance but also on boosting competitiveness, expanding trade, building human capital, and promoting sustainable employment.

The discussion concluded with the need to avoid the "resource curse" by transforming natural resource endowments, both renewable and fossil, into diversified economic growth that benefits all sectors of society. In summary, managing this transition requires global cooperation, targeted financial support, and comprehensive capacity-building efforts to mitigate the impacts of decarbonization while enabling sustainable, diversified economic growth