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How Developing Nations Battered by Climate Change Are Crushed by Debt From International Lenders
A new UN report describes the interplay between natural disasters made worse by climate change, compounding debt and the resulting inability to fund social welfare programs.
By Katie Surma
A new U.N. report sheds light on how climate change is driving some climate-vulnerable nations deeper into debt, locking them into unsustainable cycles of economic crisis and hampering their governments’ ability to provide basic services to citizens.
Related Knowledge Center: Climate economics
State of Play
Climate change is now a driver of the world’s economy. The impact is profound:
- Catastrophic weather events — hurricanes, floods, droughts, high temperatures — are more frequent and more extreme. The cost can be measured in both the initial damage caused and the longer-term impact on the economy.
- Vulnerable communities are increasing climate-related investments, hardening infrastructure and taking other protective measures.
- Investment in carbon capture and storage technologies is increasingly rapidly.
- Governments are making investments and crafting regulations to reduce emissions of carbon dioxide and other greenhouse gases.
On top of all of this is the cost of uncertainty. As the Fourth National Climate Assessment, released in 2018 by the U.S. Global Change Research Program, says, “The assumption that current and future climate conditions will resemble the recent past is no longer valid.”