Guest essay by Eric Worrall
Imagine if you could pay down your own credit card or bank debt by mowing your own lawn. This is what developing countries have just demanded from COP26. To make sure the motion is passed, they also want to hold host country Britain accountable for ensuring the success of this proposed “climate emergency pact”.
Climate change: Vulnerable nations call for ’emergency pact’
By Matt McGrath
The countries most vulnerable to climate change are calling for an “emergency pact” to tackle rising temperatures.
The vulnerable nations say that richer countries must fulfil their obligations to deliver $100bn in climate finance per year over the 2020-24 period.
The CVF nations want this money to be split 50-50 between cutting carbon and helping countries adapt to the threat posed by rising temperatures.
The countries also want the UK to “take full responsibility” for this aspect of the negotiations, saying it is vital to restore confidence in the Paris pact.
Among the other areas that the most vulnerable nations want to see progress on is the question of debt-for-climate swaps.
Many of the world’s poorest countries have large debt burdens, and these have been exacerbated by the Covid-19 pandemic which has stretched finances even further.
In a debt-for-climate swap, a country can reduce what it owes to international creditors by directing the debt service payments to fund renewable energy or greater protection for nature.
One such restructuring was recently announced by Belize where the debt money will now go to support marine conservation projects instead.
Read more: https://www.bbc.com/news/science-environment-58477926
There is the troubling issue that developing country governments repaying debt to banks, without actually giving any money to the banks, might leave the the banks short of cash. But I guess “climate emergency pact” afflicted banks could always ask rich country governments to print new cash, to make up any shortfall.