Loss and Damage Research Observatory’s Post

The Task Force on Climate, Development and the IMF published its recommendations on how to enhance IMF/WB Low Income Country Debt Sustainability Framework. Our top line recommendation is to capture climate risks and growth enhancing effects of climate investments. We also make recommendations on improving data, scenario design, the role of macro-financial models, and why a risk management approach can help us get serious about possibly high impact risks. https://lnkd.in/dRHSDSKd Tim Hirschel-Burns and I wrote up a blog to answer some questions on why the debt sustainability analysis matters for climate change and development https://lnkd.in/dhtU_GgP

Particularly interesting article here on the interrelationship between developing countries, credit and debt, the IMF, and potential greenwashing... The title of "Greenwashing" Structural Adjustment says it all... Definitely worth a read! https://lnkd.in/eFUphG72 Greenwashing Research Project The Credit Rating Research Initiative #creditratings #IMF #debt #climate

Yesterday at #COP29 the World Bank announced that it was expanding its Climate Resilient Debt Clauses to include droughts and floods. However, the IMF is yet to announce debt pause clauses for its financing arrangements. But, it already has an instrument called Catastrophe Containment and Relief Trust that can provide debt relief to countries. Marina Zucker and I wrote up a policy brief on how the IMF could sell just 4% of its gold reserves to replenish the Catastrophe Containment Relief Trust https://lnkd.in/gc35bt6b More $$$ alone won't be enough though. More countries also need to be eligible to actually access the CCRT. Reuters summary of the brief here: https://lnkd.in/g5ZM9qvC

CountryRisk.io webinar: Sovereign debt in frontier countries and the role of credit ratings Just one more week to go before our webinar with Shari Spiegel and Moritz Kraemer. Follow the link below to register.

CountryRisk.io Webinar: Sovereign debt in frontier countries and the role of credit ratings Registration details: Date: Tuesday, April 16, 2024 Time: 09:00 AM Eastern Standard Time (EST) // 03:00 PM Central European Time (CET) Registration link: https://lnkd.in/ePfAqm9D Many emerging market economies are firmly in the grip of a sovereign debt crisis. The economic fallout from the pandemic and the rapid shift in the interest rate environment has exposed underlying weaknesses of many countries’ debt-bearing capacity. Once again, sovereign defaults are on the rise in low-income countries. How have rating agencies performed their duty of objectively flagging risks in such a dynamic environment? Have their methodologies and decision exacerbated the crisis? Or, as some critics suggest, have they caused a self-fulfilling prophecy as downgrades triggered defaults in the first place? Has the fear of downgrades prevented proactive restructuring and thus intensified the economic and social fallout of financial crises? Is the analytical approach of rating agencies still adequate in the twin debt and climate crisis afflicting many poor countries? What are the lessons learned from this episode for the ratings industry? Join our distinguished speakers, Shari Spiegel, Acting Director of the Financing for Sustainable Development Office (FSDO) within the Department of Economic and Social Affairs at the United Nations (United Nations DESA) and Moritz Kraemer, Chief Economist and Head of Research at LBBW Bank and former Global Sovereign Chief Ratings Officer at S&P Global, as they address these questions and more in our webinar. #emergingmarkets #frontiermarkets #africa #globalsouth #ratingagencies S&P Global Fitch Ratings Moody's #sovereign #sovereigndebtrestructuring #sustainabledevelopmentgoals #SDGs

Do you know what a Debt-for-Nature Swap is? These innovative financial instruments can help vulnerable countries invest in climate action and nature while reducing their debt. In CFDA's Debt-for-Nature Swap (DFNS) Primer, you'll learn: 🔍 How climate change and debt act in concert to create compounding environmental and financial challenges 🔍 The fundamentals of DFNS and when they should (or shouldn't) be considered 🔍 Examples of DFNS and how they're structured https://lnkd.in/gt72tBin

Join me tomorrow (Tuesday 3 pm CEST) when I discuss with Shari Spiegel the role played by rating agencies in the current debt crisis ripping through frontier markets. Or didn‘t they play a role at all? Come and find out in this free webinar.

⚡Just in: A NEW report commissioned by the governments of Colombia, Kenya, France, and Germany lays bare the devastating effect of debt burdens for many vulnerable low-income countries. The Expert Review on Debt, Nature, and Climate reveals the extent to which unsustainable debt burdens, loss of in nature, and escalating climate change are compounding one another in a hugely destructive '‘triple crises''. Ali Mohamed, Special Envoy for Climate Change-Executive office of the President of Kenya & Chair of African Group of Climate Negotiators says: “This interim report highlights the inescapable reality that we cannot address the climate crisis without tackling the growing burden of debt. Vulnerable nations are caught in a cycle of borrowing to recover from climate disasters, further straining their economies. It’s time for the global community to come together, not just to restructure debt, but to recognize that investments in nature and climate resilience are fundamental to long-term economic stability. Our goal is to turn this vicious cycle into a virtuous one, where sustainable investments lead to prosperity and resilience, rather than debt distress.” ➡️ For more information, see the full report: https://lnkd.in/dnCiCP_w Center for Global Development, BNP Paribas, University of Massachusetts Amherst, World Resources Institute, Utrecht University, Boston University Global Development Policy Center, Inter-American Development Bank, CEB - Council of Europe Development Bank, Institute of Finance and Sustainability (IFS), Bruegel - Improving economic policy, Council on Foreign Relations, Resilient Earth Capital, Universidad de Los Andes, Universidad Internacional del Ecuador, The Liquidity and Sustainability Facility (LSF), LBBW 

🌍 As the World Bank and IMF meetings take place in Washington, we have just released our latest briefing: Reforming Climate Finance: Unlocking Funds from Multilateral Development Banks Zero Carbon Analytics. It covers: ✅ A progress snapshot on MDB reforms, with an additional USD 357 billion in lending headroom possibly unlocked through capital adequacy framework updates. ✅ The potential for further MDB reforms to unlock hundreds of billions in climate financing for low- and middle-income economies. ✅ Other tools, such as guarantees and equity finance, that MDBs could use to attract more private sector capital. ✅ The role of increased MDB funding in shaping the New Collective Quantified Goal (NCQG), which will determine the level of climate finance available to developing countries for climate action. https://lnkd.in/dMhqcZuy Many thanks to Mehr Hassan for collaborating with us on this piece! and Emma Davis for being so instrumental in shaping the briefing #ClimateFinance #MDBReform #SustainableFinance #NCQG #IMF #WorldBank #COP29