In the midst of the annual Spring Meetings of the International Monetary Fund and the World Bank Group, the NY Times published an article on the “systemic risk” debt and climate change pose on the world economy, quoting the DRGR proposal.
Author Somini Sengupta points out the struggle developing countries face, as they are confronted with two global crises at the same time: climate change and debt – with the additional pressure of an economy shaken by the pandemic.
The text refers to a new assessment by the World Bank, International Monetary Fund and others, which was seen by The Times that acknowledges “a systemic risk to the global economy that may trigger a cycle that depresses revenues, increases spending and exacerbates climate and nature vulnerabilities”; it goes on by outlining the next steps until the international climate talks in November and highlights the importance of action on the example of Belize.
Sengupta mentions the “flurry of proposals from economists, advocates and others […] call[ing], in one way or another, for rich countries and private creditors to offer debt relief, so countries can use those funds to transition away from fossil fuels, adapt to the effects of climate change, or obtain financial reward for the natural assets they already protect, like forests and wetlands.”
The DRGR proposal is particularly emphasized here: “One widely circulated proposal calls on the Group of 20 (the world’s 20 biggest economies) to require lenders to offer relief ‘in exchange for a commitment to use some of the newfound fiscal space for a green and inclusive recovery.’”
Read the whole article here.