Debt

Leer in español Something significant is happening in the desert in Egypt as countries meet at COP27, the United Nations summit on climate change. Despite frustrating sclerosis in the negotiating halls, the pathway forward for ramping up climate finance to help low-income countries adapt to climate change and transition to clean energy is becoming clearer. I spent a large part of my career working on international finance at the World Bank and the United Nations and now advise public development and private funds and teach climate diplomacy focusing on finance. Climate finance has been one of the thorniest issues in global climate negotiations for decades, but I’m seeing four promising signs of progress at COP27. Getting to net zero – without greenwashing First, the goal – getting the world to net zero greenhouse gas emissions by 2050 to stop global warming – is clearer. The last climate conference, COP26 in Glasgow, Scotland, nearly fell apart o...

Barbados Prime Minister Mia Amor Mottley spoke passionately to the United Nations General Assembly in September about the mounting debt many developing countries are shouldering and its increasing impact on their ability to thrive. The average debt for low- and middle-income countries, excluding China, reached 42% of their gross national income in 2020, up from 26% in 2011. For countries in Latin America and the Caribbean, the annual payments just to service that debt averaged 30% of their total exports. At the same time, these countries are facing a “triple crisis of climate change, of pandemic and indeed now the conflict that is leading to the inflationary pressures that lead regrettably to people taking circumstances into their own hands,” Mottley said. Rising borrowing costs coupled with high inflation and slow economic growth have left developing countries like hers in a difficult position when it comes to climate change. High debt payments mean countries have...