Poorest Countries Seek Debt Relief, Citing Costs of Climate Change

Summary

The V20 group, rep­re­sent­ing nearly 60 coun­tries most vul­ner­a­ble to cli­mate change, is call­ing for restruc­tur­ing global debt to address the $525 bil­lion in dam­ages they have suf­fered in the last two decades due to cli­mate change. They are urg­ing rich coun­tries and cred­i­tors to pro­vide $100 bil­lion annu­ally to help mit­i­gate the impacts of the cli­mate cri­sis on their nations.

The rep­re­sen­ta­tives of almost 60 coun­tries of nations more vul­ner­a­ble to the effects of cli­mate change have warned that ​“losses” and ​“dam­ages” caused by the warm­ing planet far out­weigh their debts to richer coun­tries. Restructuring global debt, they said, is cru­cial to tack­ling the grow­ing cri­sis.

Ahead of November’s COP27 United Nations cli­mate change con­fer­ence, they pointed out that their coun­tries have suf­fered $525 bil­lion in dam­ages due to the effects of cli­mate change in the last 20 years.

In a note pub­lished at the end of the last meet­ing of the Vulnerable Twenty Group, del­e­gates asked rich coun­tries and cred­i­tors to adhere to ​“the deliv­ery of $100 bil­lion a year” to the vul­ner­a­ble coun­tries.

V20 rep­re­sen­ta­tives said the funds are ​“com­men­su­rate with the emer­gency nature of the fall­out of the global cli­mate break­down.”

A large por­tion of the global pop­u­la­tion lives in coun­tries that are the least respon­si­ble for global green­house gas emis­sions. However, many of these coun­tries have also borne the brunt of the impacts of green­house gas emis­sion-fueled cli­mate change.

Founded in 2015, the V20 Group com­prises 58 mem­bers, where approx­i­mately 1.5 bil­lion peo­ple live. The coun­tries pro­duce only about 5 per­cent of global green­house gas emis­sions.

As a result, the V20 dis­cussed the pos­si­bil­ity of sus­pend­ing the repay­ment of €435 bil­lion in debt to richer coun­tries. The V20 also asked the World Bank and International Monetary Fund to for­give at least half of their debt, using the funds to pre­serve nature instead. The World Bank alone accounts for 20 per­cent of the V20 coun­tries’ national debts.

“As eco­nomic man­agers, it has long been clear to us that cli­mate change is not a dis­tant chal­lenge,” said Ken Ofori-Atta, Ghana’s finance min­is­ter and cur­rent V20 chair, in the keynote address.

“It has set ablaze not only many of the world’s forests but also our frag­ile national bud­gets,” he added. ​“Climate change is sim­ply com­pound­ing exist­ing and increas­ingly acute fis­cal stress.”

“The inter­na­tional finan­cial archi­tec­ture must become fit for cli­mate and for our devel­op­ment ambi­tions, and it must sup­port and not detract from trans­for­ma­tional changes needed in the real econ­omy toward our com­mon pros­per­ity,” Ofori-Atta con­tin­ued.

David Theis, a spokesman for the World Bank Group, con­firmed that the insti­tu­tion rec­og­nizes how many poor and small-island coun­tries are cop­ing with the sever­ity of the cli­mate cri­sis.

He added that banks are ​“com­mit­ted to com­pre­hen­sive debt solu­tions that bring real ben­e­fits to peo­ple in poor coun­tries, par­tic­u­larly coun­tries with high debt vul­ner­a­bil­i­ties that lack the finan­cial resources to deal with the chal­lenges they face.”

Mohamad Nasheed, for­mer pres­i­dent of the Maldives, told the New York Times that repay­ing the mas­sive debt would be an ​“injus­tice.”

“We are liv­ing not just on bor­rowed money but on bor­rowed time,” he said. ​“We are under threat, and we should col­lec­tively find a way out of it.”

The Maldives, which has already started to expe­ri­ence the impacts of sea level rise asso­ci­ated with melt­ing polar ice caps as a result of cli­mate change, was among the many out­spo­ken island states denounc­ing the global lack of action at the event.

Vanuatu, Samoa, Fiji and Palau are among the many other V20 mem­bers shar­ing the same urgency and lament­ing sub­stan­tial inac­tion by wealth­ier nations.

“Climate change has already elim­i­nated one-fifth of our wealth,” Nasheed said. ​“In other words, V20 economies would be 20 per­cent wealth­ier today had we not been suf­fer­ing the daily toll of cli­mate loss and dam­age.”

“In aggre­gate dol­lar terms, this is half a tril­lion in losses. And for the most at-risk coun­tries, eco­nomic losses exceed half of all growth since 2000,” he added. ​“For the most at-risk V20 economies, the loss exceeds total growth.”

“We are expe­ri­enc­ing losses and dam­ages from the cli­mate emer­gency every day, and yet we have con­tributed the least to emis­sions,” Nasheed con­tin­ued.

Since the COP21 meet­ing in Glasgow, how to deal with the dis­pro­por­tional costs of dam­age caused by extreme weather events linked to cli­mate change has been dis­cussed exten­sively, with no con­crete agree­ments reached.

One of the rea­sons for the lack of con­sen­sus is richer coun­tries fear that com­pen­sa­tion could be asso­ci­ated with lia­bil­ity for the pro­duc­ers of largest quota of green­house gas emis­sions.

“Loss and dam­age is an expres­sion indi­cat­ing the impact of human-made cli­mate change, hit­ting peo­ple all over the world,” Saleemul Huq, direc­tor of the International Center for Climate Change and Development, told the Climate Brief.

“Damages refer to things that can be restored, such as dam­aged houses, while losses refer to what is com­pletely lost and will never come back, like human life,” he added.

At the con­clu­sion of the meet­ing, the V20 expressed ​“grave con­cern at the fail­ure of the G7 and G20 to align their poli­cies with Paris Agreement goals, fur­ther expos­ing the fifty-eight (58) V20 economies to mul­ti­ple and cas­cad­ing risks now and in the future.”

• V20
• The Guardian
• The Bretton Woods Project