The Economic Commission for Latin America and the Caribbean (ECLAC), in its role as a member of the Secretariat of the Group of Independent Experts, has contributed to the development of the preliminary report Debt, Nature and Climate, a document requested by the governments of Germany, Colombia, France and Kenya, which highlights the need for urgent reforms that integrate fiscal and environmental sustainability in the debt management of the most vulnerable countries.
The report examines how high levels of debt, climate change and biodiversity loss are creating a “triple crisis” that critically affects developing countries. It adds that, since 2020, 18 Emerging Economies and Developing Countries (EMCD) have defaulted on their debt payments, reflecting the growing financial pressure in these countries.
The document also highlights that the debt crisis limits the capacities of governments to implement climate adaptation and mitigation policies. In addition, it projects that the costs associated with the climate crisis could represent up to 6.5% of the GDP of some EMCDs by 2030.
Regarding the crisis due to biodiversity loss, the report shows how economic development has been accompanied by the degradation of ecosystems. For example, between 1992 and 2014, while the production of goods and infrastructure doubled, “natural capital” decreased by almost 40%. This trend underscores the need for policies that promote the conservation and restoration of natural capital to ensure a sustainable future.
The report highlights that it is possible to achieve a “virtuous circle” of inclusive and sustainable growth only if a strong national policy is accompanied by international financial cooperation, and remembers that the fight against climate change and the loss of biodiversity benefits everyone.
Likewise, the Group of Experts calls on the international community to adopt collective measures and emphasizes that it is not possible to address the climate crisis or the loss of nature without resolving the debt crisis of the most vulnerable countries.
The final version of the report will be published in spring 2025 and will include recommendations to promote debt management that supports sustainable development.
This work is supported by a Secretariat made up of four research institutes: ECLAC, ODI, Finance for Development Lab and the African Center for Economic Transformation.
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