“Loss and Damage” refers to the climate change impacts that go beyond what communities can adapt to. Within the Loss and Damage Youth Coalition, we believe there is no climate justice without dedicated finance for Loss and Damage, especially given that the least wealthy in 2019 accounted for only 12% of total greenhouse gas emissions. Despite contributing the least to the problem, developing countries are bearing a disproportionate share of its consequences. Many are falling into a “debt trap” as they take on loans to repair the devastation caused by climate change estimated between $100 and $500 billion annually 2 , often at the expense of their education, healthcare, and economic development.
Different reports show that even with the current policies in place, global warming is likely to. exceed 1.5°C, which means an increase in more severe floods, droughts, sea level rise, food loss, loss of lives and other impacts to the frontline communities. The climate crisis coupled with the current flaws in the global financial architecture that favors developed countries and penalized poorer nations through high cost of capital, high interest rates, short maturities and other factors that only increases the debt distress of vulnerable countries.
As we are in a critical time, where countries are exploring new innovative sources of finance along with identifying efforts to reform the MDB/IFIs, it is essential that these reforms truly meet the needs and priorities of developing countries, both in scale and access to climate finance. We stand in solidarity with the Turn Debt into Hope campaign and the Jubilee report commissioned by Pope Francis to call on leaders to give back hope to those bearing everyday the impact of climate change while not responsible by :
- Providing A debt for nature swap that allows to transfer debt repayment into loss and damage, adaptation, or mitigation projects
- Debt cancellation for countries facing debt distress to increase fiscal space for recovery and resilience.
- A reform of the MDB/IFIs to ensure that developing countries are not stuck in a vicious cycle of debt in order to recover from climate shock.