By Srinath Sridharan,
India has been a vocal advocate and leader among G20 nations in calling for urgent climate financing. However, the question of where climate finance will originate remains unanswered, posing a critical challenge that the world must confront. The reality is stark: addressing climate change is a zero-sum game. Failure to mobilise adequate resources puts the entire humanity at risk of losing out on a sustainable future.
The landscape of global climate finance needs has undergone a dramatic shift, transitioning from mere billions of dollars to now requiring many trillions. Failure to address this monumental challenge risks condemning humanity to a future marred by irreversible damage and untold suffering.
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The world is in the midst of a climate catastrophe, and one glaring truth is clear: the hollow promises of climate financing from the advanced nations of the West. It’s a debt of morality, one that remains unpaid.
Due to their significant historical role in fuelling human-induced climate change, developed nations bear a responsibility to address a “climate debt” owed to poorer and developing countries. For years, we have witnessed the theatrical performances of Western leaders at global events like COP and G20. Yet, when the time comes to deliver, these nations conveniently forget their pledges.
Extreme temperature fluctuations, rising sea levels, and the ravaging effects of natural disasters are not abstract concepts confined to scientific journals; they are the harsh realities faced by millions around the globe. And who bears the brunt? The Global South, which has contributed the least to climate change but suffers its worst consequences the most. Any more studies or research to convince the advanced economies of the urgent need for climate financing is not just futile; it’s insulting to the intelligence of those who suffer the consequences daily.
A 2023 UNCTAD report titled “Tackling debt and climate challenges in tandem: A policy agenda” emphasised the urgent need for action in light of the intersection of public debt and climate change. It warned against the threat of a vicious cycle of perpetual vulnerabilities and economic stagnation faced by indebted economies on the front line of climate impacts. The report advocated enhanced access to financing for vulnerable countries, tailored to ensure both debt sustainability and long-term development objectives. Proposing a multilateral policy agenda, it highlighted the necessity of driving climate-resilient structural transformation in these vulnerable economies. Key recommendations include initiating reforms in the international debt architecture and scaling up public-led, affordable development financing for climate investments.
With the IMF/World Bank spring meetings, a recent report revealed another harsh reality: emerging nations are slated to allocate a staggering $400 billion towards servicing external debt this year alone. Alarmingly, 47 of these countries find themselves in a precarious position, unable to allocate sufficient funds towards essential climate adaptation and sustainable development efforts without courting the chance of default within the next five years.Extreme temperature fluctuations, melting ice caps, and rampant natural disasters all scream out for urgent action. The notion of more research being needed to convince nations of the urgent need for climate financing is absurd. It’s not a matter of if, but when the consequences of inaction will come crashing down on us. Any further delay or diversion of resources towards redundant studies only adds insult to injury and squanders precious time the world cannot afford to lose.
The disparity between the Global North and Global South is not just economic; it’s a moral chasm that widens with each broken promise of climate finance. While the West enjoys its prosperity, the rest of the world is left to fend for itself against the wrath of a planet pushed to its limits. Rich nations, fully cognisant of their historical contributions to climate change and the resulting burdens on poorer countries, choose to adopt a callous attitude. For these nations, many of which boast well-functioning bankruptcy laws, breaking climate promises is merely another facet of their reckless disregard. It’s a twisted notion where bankruptcy becomes a convenient excuse to maintain the status quo, allowing them to continue their extravagant lifestyles while turning a blind eye to their climate repayments. The irony is not lost with the wealthy preaching about climate action while conveniently forgetting their financial obligations. The missing monies of the Western nations represent more than just a financial deficit. It’s a reminder that when it comes to the environment, the true colours of advanced nations are not green but a shade of indifference.
It’s a perfect setting for the global financial entities, especially from the rich nations, to exploit the urgency of climate financing as an opportunity to profit from a human tragedy. While governments, corporations, and vulnerable nations await promised funds from the West to combat climate change, these entities will package the same unpaid funds as privately arranged debt offerings.
That’s why the recently-proposed economist Esther Duflo’s billionaire climate tax is only as good as the paper it’s written on. Even bankruptcy laws globally differentiate between the ability to repay and the intent to repay. For climate financing will happen only if there is intent. The missing moral solvency of rich nations proves this yet again.
The author is a corporate advisor and policy researcher.
Disclaimer: Views expressed are personal and do not reflect the official position or policy of Financial Express Online. Reproducing this content without permission is prohibited.
By Srinath Sridharan,
India has been a vocal advocate and leader among G20 nations in calling for urgent climate financing. However, the question of where climate finance will originate remains unanswered, posing a critical challenge that the world must confront. The reality is stark: addressing climate change is a zero-sum game. Failure to mobilise adequate resources puts the entire humanity at risk of losing out on a sustainable future.
The landscape of global climate finance needs has undergone a dramatic shift, transitioning from mere billions of dollars to now requiring many trillions. Failure to address this monumental challenge risks condemning humanity to a future marred by irreversible damage and untold suffering.
The world is in the midst of a climate catastrophe, and one glaring truth is clear: the hollow promises of climate financing from the advanced nations of the West. It’s a debt of morality, one that remains unpaid.
Due to their significant historical role in fuelling human-induced climate change, developed nations bear a responsibility to address a “climate debt” owed to poorer and developing countries. For years, we have witnessed the theatrical performances of Western leaders at global events like COP and G20. Yet, when the time comes to deliver, these nations conveniently forget their pledges.
Extreme temperature fluctuations, rising sea levels, and the ravaging effects of natural disasters are not abstract concepts confined to scientific journals; they are the harsh realities faced by millions around the globe. And who bears the brunt? The Global South, which has contributed the least to climate change but suffers its worst consequences the most. Any more studies or research to convince the advanced economies of the urgent need for climate financing is not just futile; it’s insulting to the intelligence of those who suffer the consequences daily.
A 2023 UNCTAD report titled “Tackling debt and climate challenges in tandem: A policy agenda” emphasised the urgent need for action in light of the intersection of public debt and climate change. It warned against the threat of a vicious cycle of perpetual vulnerabilities and economic stagnation faced by indebted economies on the front line of climate impacts. The report advocated enhanced access to financing for vulnerable countries, tailored to ensure both debt sustainability and long-term development objectives. Proposing a multilateral policy agenda, it highlighted the necessity of driving climate-resilient structural transformation in these vulnerable economies. Key recommendations include initiating reforms in the international debt architecture and scaling up public-led, affordable development financing for climate investments.
With the IMF/World Bank spring meetings, a recent report revealed another harsh reality: emerging nations are slated to allocate a staggering $400 billion towards servicing external debt this year alone. Alarmingly, 47 of these countries find themselves in a precarious position, unable to allocate sufficient funds towards essential climate adaptation and sustainable development efforts without courting the chance of default within the next five years.Extreme temperature fluctuations, melting ice caps, and rampant natural disasters all scream out for urgent action. The notion of more research being needed to convince nations of the urgent need for climate financing is absurd. It’s not a matter of if, but when the consequences of inaction will come crashing down on us. Any further delay or diversion of resources towards redundant studies only adds insult to injury and squanders precious time the world cannot afford to lose.
The disparity between the Global North and Global South is not just economic; it’s a moral chasm that widens with each broken promise of climate finance. While the West enjoys its prosperity, the rest of the world is left to fend for itself against the wrath of a planet pushed to its limits. Rich nations, fully cognisant of their historical contributions to climate change and the resulting burdens on poorer countries, choose to adopt a callous attitude. For these nations, many of which boast well-functioning bankruptcy laws, breaking climate promises is merely another facet of their reckless disregard. It’s a twisted notion where bankruptcy becomes a convenient excuse to maintain the status quo, allowing them to continue their extravagant lifestyles while turning a blind eye to their climate repayments. The irony is not lost with the wealthy preaching about climate action while conveniently forgetting their financial obligations. The missing monies of the Western nations represent more than just a financial deficit. It’s a reminder that when it comes to the environment, the true colours of advanced nations are not green but a shade of indifference.
It’s a perfect setting for the global financial entities, especially from the rich nations, to exploit the urgency of climate financing as an opportunity to profit from a human tragedy. While governments, corporations, and vulnerable nations await promised funds from the West to combat climate change, these entities will package the same unpaid funds as privately arranged debt offerings.
That’s why the recently-proposed economist Esther Duflo’s billionaire climate tax is only as good as the paper it’s written on. Even bankruptcy laws globally differentiate between the ability to repay and the intent to repay. For climate financing will happen only if there is intent. The missing moral solvency of rich nations proves this yet again.
The author is a corporate advisor and policy researcher.
Disclaimer: Views expressed are personal and do not reflect the official position or policy of Financial Express Online. Reproducing this content without permission is prohibited.
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Renowned filmmaker Sanjay Leela Bhansali makes his online streaming debut with Heeramandi: The Diamond Bazaar, a Netflix collaboration set in 1940s Lahore’s Heera Mandi. The series follows the lives of courtesans amidst India’s rebellion against British rule. With a budget of Rs 200 crore, the ensemble cast includes Manisha Koirala, Sonakshi Sinha, Aditi Rao Hydari, and Richa Chadha.
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