Colombia, Kenya, and France on Monday said they will launch an expert review of the relationship between, debt, nature loss, and climate change in a bid to better position nations to solve the three major crises.
The three countries will aim to identify potential reforms to improve poor countries’ ability to finance efforts to protect and restore nature as to mitigate, as well as adapt, to climate change.
“The forthcoming expert review will meticulously examine the intricate interplay between sovereign debt and the capacity of developing nations to safeguard biodiversity, confront the climate emergency, and transition towards carbon neutrality,” said Susana Muhamad, Colombia’s environment minister, in a statement.
“It is a collective acknowledgement of the elephant in the room —an essential step towards fostering a more equitable and purposeful global financial system poised to effectively address the pressing climate crisis.”
Over the past decade and a half, the debt crisis for the world’s poorest nations has spiralled, often forcing them to step up extraction of their natural resources, which again accelerates nature and biodiversity loss and reduces their ability to sequester carbon.
Debt-for-nature swaps have emerged in recent years as one way to address the issue, while some governments and institutions are working through initiatives such as the Bridgetown Initiative to reform the global financial system and end the trend.
On the sidelines of COP28 in Dubai, the largest multilateral development banks launched a set of common nature-positive investment principles, but are still a way off from addressing the issue in connection to debt.
“The expert review will examine necessary reforms, at the national and international levels, to ensure the debt sustainability of developing countries as they seek to increase investment to achieve a climate-resilient, low-carbon, and nature-positive structural economic transformation that also allows for greater economic and social development,” Monday’s statement said.
“To achieve this, the global expert review will conduct a comprehensive assessment of how sovereign debt impacts the ability of developing countries to conserve nature, to adapt to climate change, to decarbonise their economies, and how it can become more sustainable, both fiscally and environmentally.”
The review is a follow-through of part of the Paris Pact for People and Planet agreed at the Summit for a New Global Financing Pact in Paris in June, according to the statement.
An international independent expert group will carry out the review, fitted with its own secretariat.
By Stian Reklev in Dubai – stian@carbon-pulse.com
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