With an issue as complex as debt justice, it can be difficult to see the wins in the short term but when those wins come, they feel BIG.
Let’s go back to COP26 for a moment of context. This time last year Glasgow was a hive of activity and we were preparing to march to highlight the vital link between climate and debt justice. Scotland led the way and was awarded for their efforts in bringing Loss and Damage to the fore in discussions. This year those efforts have accelerated and we are delighted (and relieved) to see that Loss and Damage funding is finally on the official agenda for COP27, happening in Egypt at this very minute.
Well, that’s a win but let’s get more specific. In October this year the Scottish Government hosted a two day conference on Loss and Damage and along with perspectives from different sectors and from both the global north and (most importantly) the global south, our Executive Director Dr Line Christensen was invited to speak on the issue of international debt justice. She outlined how finance can be freed up for possible climate adaptation for those countries who have caused the least emissions but are paying the price for the climate crisis in homes, land, culture, livestock and most tragically, human lives.
Last week, a Synthesis Report from the conference, ‘Addressing Loss and Damage: Practical Action’ was published by the Scottish Government with debt justice featuring prominently in the First Minister’s forward. Download report.
‘…it is clear that finance for loss and damage should not generate or compound debt for those it aims to support, leaving developing countries less able to respond to future climate impacts. Communities are already paying in loss of land, jobs, cultures, ecosystems and lives. Our support must break, not reinforce, this cycle.’
At the conference Line had presented the case for why debt relief is a key component in the mission to tackle climate change for vulnerable countries that are often suffering from unsustainable debt. This unsustainable debt cannot be properly restructured or canceled without the direct participation of private creditors in the debt restructuring negotiations – even if a country were willing to apply for initiatives such as the Common Framework. As such, often the country is left spending more on their debt servicing than public services, let alone climate change adaptation.
Recognition of the issue went further as ‘No Additional Indebtedness’ was set out as one of the ten ‘Insights for Accelerating Action on Loss and Damage’. This section of the report sighted a case study submitted by Jubilee Scotland:
‘There is also growing recognition of the role of debt relief in achieving climate justice goals, underlining the structural inequity in the availability of existing finance. Examples provided by Jubilee Scotland in a case study included the Debt Service Suspension Initiative (DSSI) and the Common Framework for Debt Treatments. In November 2020 Zambia defaulted on interest payments to private lenders and in February 2021, Zambia applied for a debt restructuring through the Common Framework. However, no progress has been made in the negotiations as large private creditors have refused to enter an agreement for debt relief, highlighting the importance of private sector engagement for many types of finance to address loss and damage.’
It’s important to remember that climate finance is not a hand out or charity, as the main contributors to the climate crisis rich nations in the global north have an obligation to pay their fair share to help protect the countries and people most affected by it. This is just one reason why Line also outlined that climate finance should not be provided as loans, but as grants – helping to avoid perpetuating the unjust cycle of profiting from poor and indebted countries in the global south. This was partly recognised in the report:
‘Grant-based rather than loan-based programme funding means that affected countries, communities and individuals are not driven further into debt by having to repay more than the value of the finance that is provided.’
As we continue to watch developments in Egypt we are delighted to know that the Scottish Government’s team at COP27 will be or have already put a copy of this report into the hands of leaders, experts, representatives and activists from countries across the world. Where Scotland has started to lead, we hope many other countries will follow, even overtaking us in their ambitions for climate and debt justice.