Layering debt relief solutions to move countries from vicious to virtuous cycles of debt

Think tank: IIED

Author(s): Ritu Bharadwaj; Tom Mitchell; N. Karthikeyan

June 19, 2023

This report from UK think tank the IIED looks at the need to break this cycle of severed climate impacts burdening countries worldwide through existing debt relief options.

Severe climate impacts are burdening countries worldwide, particularly the least developed countries and Small Island Developing States. Each disaster adds to their existing debt, hindering recovery and trapping them in an unsustainable cycle. This paper explores the need to break this cycle through existing debt relief options, covering the link between climate impacts and soaring debts, financing requirements in post-disaster scenarios, analysis of available relief options and the potential of layering different debt and climate finance measures.