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We can tackle climate change and national debt together

We can tackle climate change and national debt together

For many Caribbean leaders, the long walk down a village road after a violent storm to witness first-hand the devastation to infrastructure and to people’s lives is a stark reality they are forced to face almost every year. Equally challenging is finding resources from tight budgets to keep rebuilding the same bridge, the same road, the same school; or worrying about how to relocate entire communities that may disappear under the steady rise of the seas. The Commonwealth’s idea is an initiative to swap national debt for climate change action. This Multilateral Debt Swap for Climate Action proposal will involve an agreement between participating climate finance providers and debtor countries, to reduce their public debt in exchange for a commitment to use debt repayments to finance local climate change projects. To achieve this the Commonwealth suggests that providers gradually reduce the value of small states’ debt by transferring some of their climate finance pledges to the multilateral institutions owed. This effectively writes off the borrowers’ multilateral debt while redirecting the debt repayments to fund climate change projects. Instead of repaying their creditors, governments of small states would be required to pay into a local trust fund that will manage, invest and disburse resources for project implementation. […]