The World Bank and the International Monetary Fund (IMF) are looking at how to take climate change into account as they open negotiations to reduce unsustainable debt loads for some of the world’s poorest countries, Reuters reports, citing an interview last week with World Bank President David Malpass.
“The coronavirus pandemic has worsened the outlook for many countries that were already heavily indebted before the outbreak, with revenues down, spending up, and vaccination rates lagging far behind advanced economies,” the news agency writes. Now, “Malpass said the Bank and the IMF were studying how to twin two global problems—the need to reduce or restructure the heavy debt burden of many poorer countries, and the need to reduce fossil fuel emissions that contribute to climate change.”
“There’s a way to put together…the need for debt reduction with the need for climate action by countries around the world, including the poorer countries,” Malpass told the news agency.
“There needs to be a moral recognition by the world that the activities in the advanced economies have an impact on the people in the poorer economies,” he added. “The poorer countries are not really emitting very much in terms of greenhouse gases, but they’re bearing the brunt of the impact from the rest of the world.”
Earlier this month, Reuters says, IMF Managing Director Kristalina Georgieva talked about linking international debt relief to action on climate resilience and investments in low-carbon energy, with the side benefit of helping private investors reach their sustainable development targets. “You give the country breathing space, and in exchange, you as the creditor can demonstrate that it translates into a commitment in the country that leads to a global public good,” she told media.
Now, Malpass says those discussions could progress under a new Common Framework adopted by the G20 that could lead to debt reductions for some poorer countries. Ethiopia, Chad, and Zambia have already opened negotiations, Reuters writes, and other countries are expected to follow.