Climate finance and green investments will achieve little in debt-strapped economies unless such measures are tied to systemic reform. Latin American and Caribbean countries do not need incremental pledges; they need an overhaul of global financial governance.
Author: arabellawintermayr
Latin America and the Caribbean stand at the crossroads of unsustainable debt burdens, worsening climate shocks, and stalled development goals. A new policy brief sets out how tackling looming sovereign debt problems could restore fiscal space for climate action and development. It highlights innovative instruments such as debt-for-nature swaps and disaster clauses, while calling for urgent reforms to the IMF’s Debt Sustainability Analyses and the wider global financial framework.
As global crises converge — from rising debt distress to accelerating climate impacts and uneven development — the need for fairer, more effective international cooperation has never been greater. This was the driving force behind our recent high-level seminar on “Tackling the Triple Crisis of Debt, Climate, and Development”, held on October 2 at the Brussels Press Club ahead of the 7th EU–AU Summit in Luanda.
Africa is amongst the most climate-exposed regions in the world while also grappling with mounting debt distress. A new policy brief analyzes how debt and climate vulnerabilities reinforce each other and sets out a proposal to link debt relief to climate and development goals, helping African countries escape the debt-climate trap and set the stage for a more sustainable and equitable global financial system.
A growing number of influential voices, such as Indermit Gill, Chief Economist at the World Bank, and Cyril Ramaphosa, President of South Africa in announcing the priorities of their G20 presidency, are signaling a significant shift in the global discourse on debt. The focus is moving away from short-term liquidity fixes towards a growing recognition that comprehensive debt relief is essential for sustainable development and climate action. Here’s a look at the changing debate.
Amid a challenging geopolitical backdrop, COP29 in Baku and the G20 Summit in Rio de Janeiro made only modest progress on debt and climate finance. However, the discussions underscored the importance of addressing debt to tackle the climate crisis, paving the way for future reforms. Here’s a look at the key takeaways.
Developing countries are trapped in a vicious cycle of debt, climate change and underinvestment. As they spend more on debt interest than on healthcare, education, or climate resilience, the human costs are severe. The Debt Relief for a Green and Inclusive Recovery Project offers a bold solution: transformative debt relief to support sustainable development and climate action. It’s time to break the cycle and build a resilient, green and equitable global economy. Learn more in our video.
Despite record-high debt levels and low growth prospects, the 2024 Annual Meetings of the International Monetary Fund (IMF) and World Bank Group achieved little concrete progress on debt. Nonetheless, discussions underscored the urgent need for innovative solutions – and momentum for effective debt relief appears to be building. Here’s a look at the key takeaways.
Africa is amongst the most vulnerable regions in the world to the impacts of climate change, while also grappling with a severe sovereign debt crisis. Our new new policy brief analyzes Africa’s debt dynamics and outlines a proposal to unlock the continent’s potential for green growth and support climate resilience.
In a joint statement organized by the Debt Relief for a Green and Inclusive Recovery (DRGR) Project, former central bankers and finance ministers call for comprehensive debt relief and the mobilization of new financial resources to prevent a default on development and climate goals.
To address climate change and meet the United Nations 2030 Sustainable Development Goals, emerging market and developing economies (EMDEs), excluding China, need to mobilize an estimated $3 trillion annually. However, these nations face fiscal constraints exacerbated by the COVID-19 pandemic, capital flight, and rising borrowing costs. The new Sovereign Debt and Environment Profiles (SDEP) database from Boston University’s Global Development Policy Center (GDP Center) examines these fiscal constraints and green investment opportunities in 114 EMDEs, bridging the research findings of the DRGR project and the GDP Center.
On Tuesday, May 14, 2024, the Debt Relief for a Green and Inclusive Recovery (DRGR) Project hosted a webinar discussion to launch its new report, “Defaulting on Development and Climate – Debt Sustainability and the Race for the 2030 Agenda and Paris Agreement.”