By Anna Ellis • 06 January 2023 • 12:00
"The biggest hurdle is money" according to the World Economic Forum (WEF). Image: NicoElNino/Shutterstock.com
According to the WEF, “the climate and biodiversity crises loom large but sadly, so does the gap in global finance. Estimates for the cost of emerging market countries’ adaptation to climate change range from $140-300B per year by 2030. Not to mention the costs of energy transition and mitigation efforts and the rest of a country’s development agenda.”
So where will this money come from? The WEF say “access to grants and low-cost concessional finance is limited. With rising interest rates in advanced economies and the subsequent “risk off” environment in the international capital markets, emerging market countries that previously had market access have mainly lost it. Debt burdens – which include official debt service payments postponed throughout the pandemic – are increasingly difficult to refinance and sovereign debt restructuring practices are cumbersome and time-consuming.”
The WEF confirm that: “To solve these two financial challenges – climate finance and sovereign debt – we need to find creative, scalable solutions. Failure to do so quickly will create a downward spiral where debt crises undermine the capacity of countries to adapt to climate change, making them less creditworthy and even less able to finance adaptation and mitigation.”
“Many developing countries are eager to consider climate and nature-related key performance indicators (KPIs) as part of their debt issuance and debt workout operations. They see the environmental sustainability linkage as enhancing their attractiveness to capital markets, and they see the additional resources accelerating the implementation of agreed environmental goals.”
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Originally from the UK, Anna is based on the Costa Blanca and is a web reporter for The Euro Weekly News covering international and Spanish national news. Got a news story you want to share? Then get in touch at [email protected]
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