The post-2025 Climate Finance Goal: why the next expert dialogue must address the issue of debt - Public consultation response

Countries in the global south are disproportionately impacted by climate change. Yet the existing global climate finance goal of US$100 billion per year has never been met. And, according to the OECD, 71 per cent of public climate finance is delivered through loans.

The upcoming Seventh Technical Expert Dialogue (TED 7) on the New Collective Quantified Goal on climate finance (NCQG), which brings together negotiators from all UN countries, is the opportunity to address this.  If debt is not addressed it will put at serious risk the achievement of the Paris Climate Agreement and the Sustainable Development Goals. 

Eurodad, Debt Justice, Jubilee USA, ActionAid, Latindadd, Debt Justice Norway, and the Bretton Woods Project have responded to a public consultation ahead of the Dialogue. It is additionally supported by 38 civil society organisations (CSOs), including environmental and climate CSOs, human rights CSOs, and gender CSOs. A full list of CSOs supporting this submission can be found below.

Key messages

• The Seventh Technical Expert Dialogue (TED 7) on the New Collective Quantified Goal on climate finance (NCQG) needs to integrate considerations about the vicious cycle of escalating debt and climate crises to protect the integrity of the Paris Agreement.
• The process of setting an NCQG should not result in further indebtedness from climate finance in the global south and thus should follow the principle of Common but Differentiated Responsibilities, and adopt a climate justice perspective.
• Access to high-quality, new, public and additional, debt-free, pro-poor, gender-responsive, climate finance grants that are free from economic conditions must be prioritised.
• All climate finance contributions must be aligned with the Paris Agreement’s goal to limit global temperature rise to 1.5°C, and must also be aligned with human rights and a feminist gender-responsive approach.
• An automatic debt service suspension mechanism must be included in future multilateral, bilateral, financial intermediary and private loans.
• Unconditional debt cancellation must be ensured for all countries that need it, across all creditors (bilateral, multilateral and private).
• A longer-term goal should be to establish a multilateral debt workout process under the auspices of the United Nations that can help countries break the vicious cycle of escalating debt and climate crises.
• Loan and investment contracts (bilateral, multilateral, private and intermediary) must be designed in a participatory manner, and lending terms must be publicly disclosed.
• All climate finance contributors must follow responsible borrowing and lending principles.