The Expert Review on Debt, Nature and Climate is an independent, comprehensive assessment of the relationship between sovereign debt, nature conservation and climate action in low and middle income countries.
Established as a joint initiative of the governments of Colombia, Kenya, France and Germany, the Review is being conducted by an Independent Expert Group drawn from both developed and developing countries, and with diverse experience in the fields of debt, nature and climate.
The Review will publish an Interim Report in October 2024, setting out an analysis of the issues. Its final report will be published in the spring of 2025. It will make recommendations – to both borrower and creditor countries, international financial institutions, the private sector and others – on how sovereign debt can be made more sustainable, both fiscally and environmentally.
Why?
Tackling climate change and biodiversity loss are daunting challenges for all countries. But for many low and middle income economies, achieving a climate-resilient, low-carbon, and nature-positive path of development is particularly hard.
As a result of recent increases in the US dollar and US interest rates, many such countries are now facing high levels of indebtedness. Many are now having to pay 10% or more of their government budgets to service their debts. Without changes to the current financial architecture, this makes it difficult or impossible to borrow more to invest in nature and climate action.
The financing needs for climate adaptation, mitigation and biodiversity conservation in developing countries are large, and they include many investments (such as forest protection and renewable energy) which generate global public goods of benefit to all nations. Yet there are limited sources to meet these financing needs, and even fewer sources which provide comparatively lower-cost finance. As increasingly frequent and intense climate-related disasters have led to greater loss and damage, many countries have been forced to take on even higher levels of debt to pay for the higher spending required to cope. But increasing debt levels poses a risk for debt sustainability.
In conducting an independent assessment of this field, the Expert Review aims to propose measures and reforms which, if adopted, would enable more investment for nature and climate action in both a fiscally and environmentally sustainable way.
