The climate emergency is fuelling the accumulation of debt in countries in the global south. While having contributed very little to it, countries suffering from the impacts of climate change are facing more expensive borrowing costs because of their climate vulnerabilities, and are left with almost no option but to borrow to finance climate mitigation and adaptation, and to fund reconstruction and recovery after a climate extreme event. Furthermore, climate finance, that should respond to the principle of common but differentiated responsibilities, is being delivered mainly through loans and debt creating modalities, putting the financial burden on the shoulders of the global south.

The need to transition globally towards a more sustainable and equitable economy will not be possible without sustainable, responsible, fair and non-debt creating climate finance, as well as finance for transition that does not exacerbate debt vulnerabilities in the global south. Furthermore, debt cancellation and a fair debt resolution framework is needed. Climate justice will not be possible without economic and debt justice. And debt justice won’t be possible without climate justice.

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