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Barbados implements groundbreaking Debt-for-Climate Resilience swap - https://lnkd.in/gZdiRqn2 - In a groundbreaking effort to combat climate change while alleviating its debt burden, Barbados has successfully implemented the world's first debt-for-climate resilience swap. This innovative strategy aims to enhance the island nation's climate adaptation initiatives while easing the financial pressure of high-interest loans. The agreement entails substituting a portion of Barbados's

Check our article in Foreign Policy on how to transform debt-for-nature swaps to deal with the trip crisis of debt, climate change, and biodiversity loss. We propose scaling and reforming these niche financial instruments so that they can truly deal with these massive crises.

The Global South is on the front lines of climate change. Yet, combating it is costly. Debt-for-nature swaps, pioneered in 1987, have tried to make it easier. Interruptrr Fellow Elizabeth Losos, Alexander Pfaff, and Stuart Pimm argue that it’s time to reform debt-for-nature swaps to address climate change and spark economic growth in Foreign Policy. #climatechange https://lnkd.in/d3eTnXMN

Debt-for-nature swaps could unlock $100 billion for climate action in vulnerable countries. Countries like Belize, Ecuador, and Barbados have already benefited. The IMF and World Bank estimate these countries collectively owe $431 billion but receive only $14 billion in climate finance. Encouraging more swaps at upcoming meetings is crucial. Countries like Pakistan, Sri Lanka, and Ghana could benefit by addressing sea-level rise, flood prevention, and rainforest preservation. These swaps not only create fiscal space but also achieve global climate and nature outcomes. It's time for wealthier nations to support these initiatives. But does relying on debt forgiveness to fund climate action undermine the accountability of both debtor and creditor nations? #globalfinance #debtfornature #natureconservation

Debt-for-nature swops could give $136 billion boost to climate fight, says report. LONDON - Debt-for-nature swops, in which poorer countries have debt written off in return for protecting eco systems such as barrier reefs or rainforests, could provide US$100 billion (S$136 billion) for the fight against climate change, a new report has calculated. The British-based non-profit International Institute for Environment and Development (IIED) based the estimate on the possibility of debt swops in many of the 49 less-developed countries seen as most at risk of debt crises. Belize, Ecuador, Barbados, Gabon and Cabo Verde have all done such swops in recent years and Ms Laura Kelly, the director of IIED’s sustainable markets research group, said many of those in debt distress and also often most threatened by global warming were looking at them. The IMF and World Bank, whose figures the analysis is based on, estimate the countries focused on collectively owe US$431 billion, mostly to wealthier governments, the IMF itself and pension and hedge funds. At the same time, these countries received less than US$14 billion in climate finance, according to 2021 figures from the Organisation for Economic Cooperation and Development, which is significantly less than they need to limit climate change or at least adapt to it. The aim of IIED’s report is to encourage a drive for more debt swops at the upcoming IMF and World Bank Spring meetings, which start later this week. Ms Kelly said countries that could benefit included Pakistan, Sri Lanka and The Gambia in West Africa, which is at “huge risk” of sea level rise, she stressed, and needs to invest heavily in flood prevention and wetland preservation. Ghana too, which like Sri Lanka is now restructuring its debt, is another obvious candidate. One of its key exports, cocoa beans used for chocolate, could thrive if more is done to protect its vital rainforests. “For governments (that do debt swops) it creates some fiscal space, but also it helps to achieve outcomes in terms of climate and nature that have global impact,” Ms Kelly said, adding that many countries were interested in potentially doing them. REUTERS https://lnkd.in/dPnk9-qg

Debt for Climate swaps Several African countries are pushing for Debt-for-Climate swaps to tackle climate change and debt crises. More than 20 African countries are considering halting repayment of $685 billion in debt, with the goal of swapping debt for investment in climate projects. Clearly, while this can be viewed as an answer to shake up the debt burden of debt stricken countries, the process might need to address some of the potential challenges and limitations: 1. Debt-for-climate swaps involve intricate long negotiations and structuring so the complexities must be addressed 2. Limited availability of funds for debt forgiveness and climate finance, meaning it might have scalability issues 3. Policy and institutional barriers, meaning it requires such support 4. Monitoring and evaluation ensuring effective use of redirected funds. In this context, it is desirable to consider 1. Standardizing processes👉by developing guidelines and best practices. 2. Scaling up initiatives👉Increasing participation and funding 3. Integrating with national climate strategies👉Aligning debt-for-climate swaps with country-led climate goals.

African environment ministers convened at the African Ministerial Conference on the Environment (AMCEN) to address urgent climate finance needs. Current funding of approximately $30 billion falls drastically short of the $277 billion required annually to achieve 2030 climate goals. The African Group of Negotiators on Climate Change, advocated for a new global climate finance target of $1.3 trillion per year by 2030, moving away from reliance on loans that exacerbate debt burdens. Many African nations face severe debt crises, with debt servicing consuming significant portions of government revenues, limiting their ability to invest in essential services and climate initiatives. To secure a sustainable future, African leaders need to prioritize investment in energy infrastructure, enhancing energy efficiency, and developing robust climate adaptation strategies. These efforts are crucial for positioning Africa as a leader in the global energy transition and the shift to a low-carbon economy. 🌐 https://lnkd.in/dbec-UgJ. #ClimateAction #AfricaResilience #SustainableDevelopment #ClimateFinance #RenewableEnergy #COP29 #ClimateGoals #Côted’Ivoire

Rarely does one come across win-win situations that majorly benefit both the environment and economy. Debt-for-nature swaps are one such idea that has again gained momentum recently. Developing nations that are grappling with debt can now protect and restore their environment, including rainforests, climate, mangroves, and coral reefs, while reducing their debt burden. However, it is crucial to ensure that indigenous and local communities equitably share the benefits. This investment strategy can help maintain operable ecosystems, mitigate poverty, and prevent biosphere collapse. #nature #debt #investment #climate #sustainability | More: https://lnkd.in/eusA9v3F

⚠ New paper: The Green Transition and Public Finances Thrilled to share that my paper, co-authored with Caterina Seghini, has been published as a Banque de France Working Paper: https://lnkd.in/e5pXmG2A 🔎 Main takeaway: Mitigating climate change is crucial, but relying too heavily on public spending could make government debt unsustainable. A balanced approach combining public mitigation effort and higher carbon pricing would be optimal. #climatechange #publicdebt #carbonpricing

Is climate debt the solution vulnerable countries need now? This was one of the questions Kome Odhomor asked the panellists at a press conference in the ongoing COP29, the panellists: Nnimmo Bassey, Stephen Oduware of HOMEF and @Ivonne Yanez of Accion Ecologica in replying to her question offered not just answers but insights into the realities of the Global South, especially in regards to the Climate Crisis. The summary of their response is this- Climate debt is a solution but it’s not the only solution required. Beyond paying up the climate debt which has to come in form of funding. The priority of the high emission countries who owe the climate debt should be to stop what is causing the damage in the first place. Climate finance shouldn’t be just about money, it should be about LIFE. We’re asking for real actions, funding, and a chance of survival for the planet. We can’t continue to prioritize profit over people, convenience over climate, and inaction over justice. However, the climate debt must be paid. COP29 has the chance to leave a legacy of pioneering a new move of real solutions.