DRGR Project Co-Chairs María Fernanda Espinosa, Ulrich Volz and Yuefen Li comment on the tightened monetary policy of central banks, taking dozens of climate-vulnerable, highly-indebted countries to the edge of a financial abyss. In an Op-Ed published on “Project Syndicate”, they stress that the international community must provide immediate debt relief in exchange for green investments to address the confluence of economic and environmental disasters ravaging the Global South.
November was a busy month of climate-change politicking. As policymakers tried to make progress at the United Nations Climate Change Conference (COP27) in Sharm El-Sheikh, Egypt, world leaders convened in Bali, Indonesia, for the G20 summit. While neither summit focused on the confluence of environmental and debt crises currently ravaging much of the Global South, both achieved some progress toward providing developing countries with the financial support they need to weather the current storm.
In Bali, the leaders of the world’s biggest economies mostly reiterated their previous positions on the debt crisis, with only minor adjustments. But at COP27, smaller countries were able to make their voices heard and underscore the need for international action on debt relief. Barbadian Prime Minister Mia Mottley, for example, pleaded with the international community to assist climate-vulnerable countries. Her “Bridgetown Agenda” proposes a three-step plan to address the developing world’s crisis, including emergency liquidity injections by the International Monetary Fund, enhanced lending by multilateral development banks and new financing mechanisms.
