The side event, titled “Debt and Climate Finance: Faith Perspectives and Proposals,” was co-sponsored by the World Council of Churches, World Communion of Reformed Churches, Lutheran World Federation, World Methodist Council, and Council for World Mission.
“This panel will focus on what must be done and why it must be done,” said Barry Herman, a member of the Ecumenical Panel on a New International Financial and Economic Architecture and the Social Justice in Development network, who moderated the virtual event.
Facing sea-level rise, ferocious storms and other climate impacts, debt payments stand in the way of meeting communities’ needs and building resiliency.
“From the Pacific, we call for Jubilee…for grants not loans for adaptation…for reparations for climate and ecological debts owed us,” said Rev. James Bhagwan, general secretary of the Pacific Conference of Churches. Jubilee does not only encompass the cancellation of financial debts but also the liberation of oceans, land and people from exploitation, Bhagwan added.
Sarah Jane Ahmed, founder of the Financial Futures Center and advisor to the Climate Vulnerable Forum, discussed a package of proposals for the way forward such as: climate-resilient debt restructuring including debt-for-climate swaps, rethinking debt limits, and increased voice of climate-vulnerable countries in global economic governance.
The World Bank continues to focus on debt reduction, said Lea Hakim, senior economist in the World Bank’s Global Macro and Debt Analytics team. “Green bonds” could also raise capital for investments in projects with positive climate and ecological impacts, Hakim pointed out.
Valerie Hickey, practice manager in the World Bank’s Environment and Natural Resources Global Practice, shared the World Bank’s Climate Change Action Plan which includes ensuring that “every bank investment is in line with the Paris goals.” Hickey also highlighted the role of partnerships, not least with civil society and faith-based organisations.
David Comissiong, the Government of Barbados’ ambassador to the Caribbean Community and founder of the Clement Payne Movement, observed that indebtedness of many countries, including Caribbean ones, is rooted in the history of colonisation. More recently, “much of debt burden is caused by climate-induced loss and damage,” he said.
“We are not satisfied…we are nowhere close to keeping warming to 1.5 C,” he said. Comissiong challenged the International Monetary Fund and World Bank to support radical measures to respond to the intertwined debt and climate crises.
At COP 26 in Glasgow, the Government of Barbados called for a Loss and Damage Fund as well as USD 500 billion worth of special drawing rights to be issued every year for 20 years to enable climate-vulnerable countries to unlock critical investments in climate resiliency and sustainability.