Session 3C looked at the links between debt and action on climate and nature.
Growing debt among emerging economies has severely impacted efforts to tackle the climate crises and biodiversity loss. The pandemic has only made the situation more urgent.
The IMF estimates that low-income countries will need US$ 200 billion between 2021-2025 for their response to the pandemic. The economic recovery from the pandemic therefore requires bold, innovative, and sustainable responses that address the triple crises of debt, climate change and biodiversity destruction.
This session looked at emerging approaches to address the triple crises. It also considered the roles of different actors involved.
Some key messages:
• It is important that economic recovery coherently addresses the triple crises of debt, climate change and biodiversity destruction simultaneously
• All actors will need to coordinate to support these efforts:
- Debtor country governments will need to proactively address debt, climate and nature priorities
- Civil society will need to support debt for climate and nature and ensure that local voices are heard in climate and nature prioritisation
- Creditors will have to engage meaningful particularly the multilaterals (ie. IMF and World Bank), China and the private sector who all hold much of the developing country debt