Branding loans as climate finance risks making vulnerable countries’ problems even worse, warns ActionAid on the eve of the Summit for a New Global Financing Pact in Paris
On the eve of the Summit for a New Global Financing Pact in Paris, Teresa Anderson, Global Lead on Climate Justice at ActionAid International, said:
“The Summit for a New Global Financing pact rightly recognises that climate-vulnerable countries aren’t getting the funds they need to cope with climate impacts and adopt green technologies. Ambitious climate goals require real money. And that’s where the planet’s climate plan is failing.
“Not only have wealthy countries failed to deliver on the already-insufficient promise of $100bn a year in climate finance, but most of the money provided so far has been in the form of loans rather than grants. However, if the Paris summit ends up branding yet more loans as climate finance, this risks making vulnerable countries’ problems even worse.
“93% of climate vulnerable countries are in, or at risk of, debt distress. From a climate perspective, loans are utterly counter-productive, as many countries find the only way they can repay their foreign debt is through expanding climate-harming activities such as fossil fuels, deforestation and industrial agriculture. Unless the Paris Summit puts forward real solutions such as unconditional debt cancellation, new tax justice agreements, and scaled-up grant-based finance, it’s not going to deliver the breakthrough that is so urgently needed.
“Instead, climate targets must be backed up with the real cash that is so essential to real climate action. Climate finance is not only about making climate action fair. Climate finance is what makes climate action possible.”
To contact the ActionAid Press Office email media-enquiries@actionaid.org or call +44 7586107955.
Notes to Editors
Further data and analysis on connections between the debt and climate crisis can be found in ActionAid’s recent briefing “The Vicious Cycle” https://actionaid.org/publications/2023/vicious-cycle
About ActionAid
ActionAid is a global federation working with more than 15 million people living in more than 40 of the world’s poorest countries. We want to see a just, fair, and sustainable world in which everybody enjoys the right to a life of dignity and freedom from poverty and oppression. We work to achieve social justice and gender equality and to eradicate poverty.
