New Initiative to tackle debt & climate change launched by Kenya, Colombia, France

New Initiative to tackle debt & climate change launched by Kenya, Colombia, France

Subject :Environment

Section: Int conventions

Context:

• At the COP28 in Dubai, UAE, leaders from Kenya, Colombia and France launched the Global Expert Review on Debt, Nature and Climate.

Global Expert Review on Debt, Nature and Climate:

• First proposed at the Summit for a New Global Financing Pact in Paris in June 2023.
• Launched by-Kenya, Colombia and France.
• Under this, a coalition of experts from countries across the world is going to independently review the relationship between sovereign debt and its impacts on hindering climate ambition.

Initiatives launched at COP28, Dubai, UAE:

1. The UAE Leader’s Declaration on a Global Climate Finance Framework
   • The declaration includes elements on, inter alia, delivering on commitments and achieving ambitious outcomes and widening the sources of concessional finance for climate action.
2. International taxation taskforce was launched by France with partners including Kenya, Barbados and Spain to push for new levies to raise further money for climate action, especially from rich countries.
3. Top multilateral development banks and international institutions announced a new global taskforce for scaling debt-for-nature swaps.
   • Debt swaps are one way to change the terms of a country’s borrowing – with bilateral government lenders, development finance institutions or private banks – either by giving states more time to repay loans or reducing interest rates and the amounts they must pay back.
   • With the agreement of creditors, debt swaps can help the world’s low-income countries avoid default and enable them to redeploy part of their debt repayments to invest in measures to tackle climate change, nature protection, health or
4. Multilateral Development Banks also released a common set of principles to track ‘nature-positive finance.’
   • Nature-positive finance aims to mobilise financial institutions to ensure a nature-positive world.
   • Members of the financial sector can contribute to curbing nature loss and aligning their financial flows to nature-positive outcomes.

Debt burden among developing countries:

• African nations are burdened with debt acquired during the pandemic. They need to develop resilience but access to capital is hindering climate action.
• Out of 52 of the most indebted countries,23 are in Africa.
• Ethiopia is on the verge of joining Zambia and Ghana on the list of nations that have defaulted on sovereign debt.

Source: Down To Earth