A Bank for the Climate Debt

For a parent trying to keep the house warm, put food on the table and save something for the future, another climate summit can feel a very long way away. The negotiations concern their life, their children and the security of the economy on which they depend. Yet their means of participation remain strangely limited. Vote for someone who might act. Change what you buy. Pay more for something cleaner, if you can afford it. Meanwhile, decisions about energy systems, infrastructure and investment take place somewhere else.

People are being asked to support a transition without being offered a meaningful stake in it. They see the bills, restrictions and exhortations, while the assets, revenues and opportunities created by the transition remain remote. Climate policy asks for consent without building a durable economic constituency for delivery.

As COP31 prepares to open in Antalya on 9 November, that failure deserves more attention. After thirty previous climate conferences, the world does not lack targets, pathways or declarations. It lacks institutions capable of translating them into ordinary economic life. If COP31 produces another description of the gap between ambition and delivery without building the machinery required to close it, the process will have become extraordinarily proficient at documenting its own failure. [1]

The scale of the undertaking is becoming harder to achieve - and harder to disguise. UNEP's latest assessment describes a pathway in which warming peaks at around 1.7-1.8°C before returning to 1.5°C or below by the end of the century, with approximately a fifty per cent chance. Heads or tails. It requires immediate emissions cuts, including a 45 per cent reduction by 2035 relative to 2025, alongside the removal and permanent storage of roughly 320 billion tonnes of carbon dioxide over this century. That is about eight years of current global carbon dioxide emissions, or more than a millennium of emissions from today's United Kingdom. [2, 3]

These pathways are usually presented as curves: emissions falling towards zero, removals expanding beneath the axis and temperatures eventually declining. On the page, a vast programme of economic reconstruction looks neat and orderly. In the real economy, those lines require power supplies, factories, skilled workers, transport, storage infrastructure and decades of expenditure. Somebody must build that capacity, operate it and accept responsibility when it fails. A model can describe the work. It cannot establish who has agreed to do it, who will carry the risk or how they will be paid.

Once warming has passed 1.5°C, the promised return within the model depends upon removing more carbon dioxide from the atmosphere than humanity continues to release. Carbon removal is not a decorative lower line on the chart. It is the mechanism on which the temperature reversal depends.

There are sound reasons to develop it. Some residual emissions will be difficult to eliminate, and achieving net negative emissions could reduce warming after a peak. But overshoot also brings risks of irreversible damage, while removal at the required scale is not assured. A child whose education is interrupted by displacement, or a family losing its home, cannot recover those years because a global average eventually comes down. The IPCC makes the physical risks clear; research by Schleussner and colleagues also cautions against confidence that the expected reversal can be delivered on schedule. Removals are necessary to the pathway, but they cannot make delay safe. [4, 5]

The debt we do not record

If present emissions create future removal work, they also create a claim upon future energy, labour, technology and capital. That claim is climate debt. It may not appear as an enforceable liability on anybody's balance sheet, but the physical obligation remains. Present activity uses a shared atmospheric budget and leaves others to manage the consequences.

Responsibility for creating that debt is distributed very unevenly. The IPCC estimates that the highest-emitting ten per cent of households account for 34-45 per cent of global consumption-based household emissions. The bottom half account for only 13-15 per cent. Asking everyone to contribute equally would ignore both responsibility and capacity. National averages conceal the same problem: a low-income household in a wealthy country may have a modest footprint and no money to spare, while a wealthy household in a poorer country can consume far above the global average. Essential heating and access to work deserve different treatment from discretionary, high-emission consumption. [4]

There is already substantial investment to build upon. The International Energy Agency estimated clean energy investment at around $2.2 trillion in 2025, covering renewables, nuclear, grids, storage, low-emissions fuels, efficiency and electrification. Yet it also found that investment remained insufficient for agreed renewable and efficiency goals, with particularly severe financing constraints in developing economies. Large aggregate flows do not guarantee that capital reaches the activities and places where it is needed, or that the people being asked to support the transition receive any recognisable stake in what it builds. [6]

The missing connection is institutional. A person with savings cannot assess a global portfolio of energy projects, negotiate long-term contracts and organise a fair distribution of returns. A community needing investment cannot reasonably approach millions of households individually. An institution must assemble those contributions, evaluate projects, allocate risks and make the relationship understandable.

If climate policy is serious about mobilising finance over several decades, it needs an institution people can save with, benefit from and ultimately belong to. It needs a Climate Bank.

A bank people can belong to

We already organise long-term financial commitments through institutions people recognise. The UK's Green Financing Programme, for example, raises money through green gilts and NS&I Green Savings Bonds to finance eligible public expenditure. The principle of connecting household savings with environmental investment is established. A Climate Bank would go further by linking participation to a transparent account of carbon responsibility, directing finance towards additional physical capacity and sharing the value created among its members. [7]

The bank would combine a Climate Savings Account with a supporting Climate Current Account.

Members would receive an estimate of their annual consumption emissions, initially using available household, income and country information and improving as better data became available. Comparison with a defined allowance would establish whether they sat above it, as carbon debtors, or below it, as carbon creditors. An equal per-person allowance offers a clear starting principle; historical responsibility, basic needs and capacity to contribute would inform its application. These are choices about fairness that should be published, contested and improved rather than hidden inside a model.

For those above the allowance, the assessed excess could be translated into a suggested annual contribution to the Climate Savings Account using a published carbon value, adjusted for affordability. This would not be a tax, a fine or the purchase of absolution. The money would remain a financial asset belonging to the saver. People below the allowance could also save, but their place in the distribution of surplus would not depend upon having money to deposit. Those exactly at the allowance could participate as ordinary savers.

The account would operate like a recognisable savings proposition. The bank would pool deposits, finance viable projects and pay savers an ordinary rate of interest. The difference would lie beneath the return. Rather than financing an opaque collection of lending and securities unrelated to climate repair, the money would help build energy, efficiency and removal capacity on which the saver's own future depends.

From performance to shared return

The redistributive mechanism would begin only after savers had received the return they were promised. Debtor savings would earn the ordinary interest rate offered by the Climate Savings Account. Where the investments financed by those deposits performed above that rate, the bank would first meet its operating costs, expected losses and prudential requirements. The remaining performance surplus would then be distributed across the membership under a published rule that recognised carbon-creditor status without excluding debtor savers from the common value they helped create.

In simple terms:

Investment performance - saver interest - costs, losses and reserves = member surplus.

Outperformance could arise through several mechanisms: ordinary project revenues, the lower financing costs created by public guarantees, concessional or blended capital, carbon revenues, verified efficiency savings, long-term purchase contracts and equity participation in successful projects. None should be hidden. Members should be able to see where the surplus came from, how much was retained for resilience and how the remainder was distributed.

This changes the politics of responsibility. Debtors are not punished or asked to donate their capital. They retain their savings and receive a conventional return. Creditors are not treated merely as passive victims or virtuous consumers. They gain a claim upon value created by investment mobilised in response to excessive use of atmospheric space. The bank turns responsibility, investment and benefit into parts of the same continuing economic relationship.

The account already watching us

The Climate Current Account would make that relationship more useful over time. With members' consent, transaction data, household characteristics and established emissions factors could improve footprint estimates and identify opportunities to reduce both emissions and household costs. Artificial intelligence makes this progressively more manageable at modest cost. The amount of carbon released is finite; the challenge is to attribute it transparently enough to improve decisions.

This is not an entirely new incursion into private life. Consumers are already assessed continuously through credit scoring, fraud detection, insurance pricing, targeted advertising and automated analysis of their transactions. Much of that activity is opaque and designed principally to protect or enrich the institution conducting it. The Climate Current Account would use comparable analytical capacity for a different purpose: helping members understand their position, find practical ways to improve it and participate in the value created by climate investment.

The distinction must lie in its governance. Members should provide informed consent, understand the assumptions applied to them, challenge their estimate, control how their data are used and share in the resulting benefit. The result would remain an estimate, open to explanation and correction, rather than a moral score, a licence for surveillance or a basis for denying essential services.

The question is not whether modern economies will analyse our behaviour. They already do. It is whether that intelligence will continue to be used only to sell, price and exclude - or whether it can also help repair the foundations on which our lives depend and return some of the value to us.

What the money builds

For a saver, the proposition is that provision for their own future can also build the assets on which that future depends. For a person with little responsibility for emissions and little capacity to save, the member surplus creates a claim to a share of the benefits. Investment in better housing, affordable clean power and reliable transport would also make lower emissions compatible with a more secure life. People would not simply be told to consume differently; they would gain practical alternatives and a stake in the assets that make change possible.

Government could make participation more attractive through tax offsets for qualifying savings. A capped tax credit, or a matching contribution for smaller deposits, could reward people for committing capital for an agreed period. Support should favour broad participation, including people who pay little income tax, and carry conditions on withdrawals and eligible investment. Its success should be judged by additional finance and physical delivery, not by money transferred between existing accounts.

Public and institutional capital would co-finance the investment programme. But the answer cannot be households alone. A credible bank must state plainly who protects deposits and who carries the loss when a project underperforms.

Protected deposits should be supported by an appropriately capitalised and diversified portfolio, sufficient liquidity and any explicit public guarantee. Project revenues would provide the ordinary source of interest. Development institutions could absorb project-preparation and early-stage risks; government guarantees could cover narrowly defined policy risks that private savers cannot reasonably assess; and pension funds, insurers and other institutional investors could provide scale as projects mature. Riskier technologies would sit in a separate investment account, where the possibility of loss remained visible.

There is no single hidden underwriter. There is a deliberate risk structure in which each participant carries the risks it is equipped to understand and manage.

The proposed process is shown in Figure 1.

Finance is not the outcome

The bank's investment mandate would need to demonstrate additional delivery. Buying an existing security does not automatically finance another wind turbine or insulate another home. New lending, primary investment and contracts that enable projects to proceed provide a stronger connection. Durable carbon removal may require long-term purchase commitments from governments and businesses before facilities can obtain finance. Public obligations and private savings would then meet through contracts capable of supporting real investment.

The accounting must follow that physical work. A savings deposit supplies finance; it does not itself settle an equivalent climate debt. Distributing income transfers resources; it does not remove carbon. The funded activity must separately demonstrate what it achieved, recording avoided emissions and durable removals distinctly. That gives members a defensible account of their contribution and prevents the same pound, payment or tonne from being presented as several different accomplishments.

The Climate Bank would therefore sit within a larger financing system rather than pretending to replace it. Governments retain responsibility for public infrastructure and for losses that cannot be recovered commercially. Companies must cut emissions and fund obligations associated with their activities. Pension funds, insurers and development banks can supply longer-term capital. The bank would connect those sources through a shared investment programme, with household participation providing finance, scrutiny and a public constituency for its continuation.

Finance alone cannot remove every obstacle. Planning delays, weak electricity systems, poor project preparation and uncertain revenues can prevent investment even where capital is available. The bank must work alongside institutions capable of resolving those constraints. But these are reasons to give it a serious delivery mandate. They do not explain how repeated calls to mobilise finance will become sufficient without machinery that households, governments and investors can actually use.

From climate promise to economic institution

COP31 should be pressed on that machinery. Where a strategy depends upon future removal, it should identify the institutions responsible, the contracts supporting delivery, the capital committed and the people carrying the risk of failure. It should explain not only how citizens will pay, but how they can participate, benefit and exercise scrutiny.

The parent at the beginning of this essay should not be asked merely to approve a transition designed elsewhere, pay whatever it costs and trust that somebody is making progress. They should be able to save through it, benefit from its performance, see what their money builds and understand how their contribution relates to a fair share.

COP31 does not need another promise that finance will somehow be mobilised. It needs institutions capable of showing where the money comes from, what it builds, who carries the risk and who shares in the return.

We have already created the climate debt. The question is whether we will leave it as an unrecorded claim upon the future, or build an institution capable of turning that obligation into investment now.

Sources

[1] UNFCCC. About COP31. Conference dates and purpose.

[2] UNEP. Emissions Gap Report 2026: The Point of Return. 21 October 2026.

[3] UK Department for Energy Security and Net Zero. Final UK greenhouse gas emissions statistics: 1990 to 2024. 2026.

[4] IPCC. AR6 Synthesis Report: Summary for Policymakers. 2023; sections A.1.5, B.6 and B.7.

[5] Schleussner and colleagues. Overconfidence in climate overshoot. Nature 634, 366-373 (2024).

[6] IEA. World Energy Investment 2025: Executive summary. 2025 investment estimates and financing constraints.

[7] HM Treasury. UK Government Green Financing Programme. Green gilts, retail savings bonds and reporting.

[8] IPCC. AR6 Working Group III, Chapter 5: Demand, services and social aspects of mitigation. 2022.

This essay began as a line of enquiry developed through the work on Value2Society. ChatGPT was used as a thinking and editorial partner, testing the argument, challenging its edges and helping shape it for publication.