Committee for the Abolition of Illegitimate Debt

The climate emergency is fuelling the accumulation of debt in countries in the global south.

Countries suffering from the worst impacts of climate change have contributed very little to it, yet they are facing more expensive borrowing costs because of their climate vulnerabilities. They are left with almost no option but to borrow to finance climate mitigation and adaptation, and fund reconstruction and recovery after an extreme climate event. Countries that have accumulated unsustainable debt levels have reduced fiscal space and opportunities to invest in adaptation and mitigation, as well as to recover from loss and damage from increasingly severe climate extreme events, slow onset events and environmental hazards. At the same time, climate finance - which should respond to the principle of common but differentiated responsibilities, as formulated in the 1992 Rio Principles to reflect historical climate debt - is being delivered mainly through loans and debt-creating modalities, placing the financial burden onto the shoulders of the global south.

All this is happening in a context of increasing debt vulnerabilities. Even before the Covid-19 outbreak, countries in the global south were facing an unfurling debt crisis, which has been fuelled by the economic impacts of the pandemic. Lending to fund fossil fuel projects, by multilateral development banks, export credit agencies and other financial institutions in the global north, has added to the unsustainable and illegitimate debts in the global south.

One of the consequences of having high debt levels is a sharply reduced fiscal space for public spending and therefore very limited opportunities to invest in the adaptation and mitigation measures necessary to guarantee people’s right to a healthy environment. Moreover, this puts countries in an even worse situation when recovering from loss and damage after a climate disaster. The demand that countries prioritise debt payments, often at high interest rates Interest rates When A lends money to B, B repays the amount lent by A (the capital) as well as a supplementary sum known as interest, so that A has an interest in agreeing to this financial operation. The interest is determined by the interest rate, which may be high or low. To take a very simple example: if A borrows 100 million dollars for 10 years at a fixed interest rate of 5%, the first year he will repay a tenth of the capital initially borrowed (10 million dollars) plus 5% of the capital owed, i.e. 5 million dollars, that is a total of 15 million dollars. In the second year, he will again repay 10% of the capital borrowed, but the 5% now only applies to the remaining 90 million dollars still due, i.e. 4.5 million dollars, or a total of 14.5 million dollars. And so on, until the tenth year when he will repay the last 10 million dollars, plus 5% of that remaining 10 million dollars, i.e. 0.5 million dollars, giving a total of 10.5 million dollars. Over 10 years, the total amount repaid will come to 127.5 million dollars. The repayment of the capital is not usually made in equal instalments. In the initial years, the repayment concerns mainly the interest, and the proportion of capital repaid increases over the years. In this case, if repayments are stopped, the capital still due is higher…

The nominal interest rate is the rate at which the loan is contracted. The real interest rate is the nominal rate reduced by the rate of inflation. , means that they cannot respond adequately to the emergencies faced by their populations, such as the pandemic and the climate emergency. The cost of servicing debt has also largely affected women and children who are the most vulnerable groups in society in most countries in the global South. This is so because when governments reduce public spending especially on social protection women and children will suffer the most.

On the other hand, the global north economies have built up an enormous climate debt to the people and countries in the global south due to their disproportionate contribution to carbon and other greenhouse emissions, amounting to nearly two-thirds of aggregate ‘carbon space’ since the 1800s. The concept of climate debt calls for systemic change. Such change entails not only a recognition of climate debt, but also restitution and reparation for the multiplicities of financial, social and ecological debt owed by the global north to the global south, built in the colonial past and through neo-colonial dynamics today.

In this context, the need to transition globally towards a more sustainable and equitable economy will not be possible without sustainable, responsible, sufficient, fair and non-debt creating climate finance, as well as finance for transition that does not exacerbate debt vulnerabilities in the global south. Furthermore, debt cancellation is needed for countries not only to be able to fight the Covid-19 pandemic, but also to address the challenges of climate change and pursue a green and inclusive recovery. The urgent message is precisely that: climate justice will not be possible without economic and debt justice. And debt and economic justice won’t be possible without environmental and climate justice.

This means recognising the climate debt that the global north owes to the global south, and providing sufficient and quality debt-free climate finance as partial restitution for that climate debt. Climate debt reparations also mean that global north countries must contribute to ecological restoration, end extractivism and the use of fossil fuels, and shift to low and zero carbon modes of production, distribution and consumption, rooted in legal and policy paradigm changes for technology transfer and equitable trade rules​​. Debt cancellation is also necessary, recognising the role that it has historically played in promoting and imposing a “development” model that is unjust and unsustainable, and the obstacle it represents today for a fair, equitable and sustainable recovery.

We demand much more than piecemeal flows of climate finance and one-off instances of “debt relief,” we demand a guarantee of non-repetition through structural change for climate justice and debt justice. We demand systemic change.

We call on world leaders, national governments, public and private financial institutions, to take urgent, just, ambitious action, in compliance with their obligations and responsibilities and commit to the following:

1. Recognition of the existence of a climate debt, additional to a historical, financial, ecological and social debt, that the global north owes to the global south. This recognition should lead to structural and financial reparations, including delivery of climate finance obligations and debt cancellation, as well as ecological restoration, phasing out fossil fuel subsidies, ending extractivism, and shifting to decarbonized modes of production, distribution and consumption.
2. Urgent delivery of new and additional, non-debt creating climate finance beyond the unfulfilled $100 billion per year target, that is sufficient and responsive to the climate mitigation, adaptation and loss and damage needs of the peoples and communities of the Global South. The priority given to mitigation in climate finance needs to be reversed, addressing and prioritizing the needs that climate vulnerable communities have to adapt and address every worsening losses and damages. Climate Finance delivery must have an inclusive process that will ensure the contributions are based on fair-shares and will warrant equitable allocation and access, especially to the most vulnerable nations.
3. Climate finance should be non-debt creating and without conditions. This means it should be primarily delivered in the form of grants. If loans are to be used, it should only be in highly concessional terms and only for certain purposes and programs that will not lead to the accumulation of unsustainable and illegitimate debt burdens. Climate finance should also be public and disbursed for public and publicly accountable programs and projects rather than private for-profit Profit The positive gain yielded from a company’s activity. Net profit is profit after tax. Distributable profit is the part of the net profit which can be distributed to the shareholders. initiatives or public-private partnerships.
4. Lenders and IFIs should take immediate action to implement ambitious unconditional debt cancellation of unsustainable and illegitimate debts, particularly those generated by funding fossil fuel projects, in order to enable sovereign and participatory policy decisions by those countries so they can meet their human and nature rights’ responsibilities.
5. An automatic mechanism for debt payments suspension, debt cancellation and debt restructuring, covering public and private lenders, in the aftermath of extreme climatic events, in addition to immediate access to non-debt creating resources for loss and damages. A disaster related to a weather, climate or water hazard occurred every day on average over the past 50 years – killing 115 people and causing US$ 202 million in losses daily. Governments in the global north must set up a separate and additional mechanism for loss and damages in recognition of their responsibility in causing the increased frequency and severity of these extreme events.
6. In addition to climate finance and debt cancellation, governments in the global north should provide sufficient additional non-debt creating resources to support countries in the global south to tackle the health, social and economic crises. Any new lending and borrowing should be made following responsible lending and borrowing rules, including hurricane clauses and other state contingent clauses so that debt cancellation is automatically granted in the case of climate, health and other emergencies.
7. Governments and international organisations should promote an open review of the approach to debt sustainability, with UN guidance and civil society participation, in order to move towards a debt sustainability concept that has at its core environmental and climate vulnerabilities, together with human rights and other social, gender and development considerations. Debt cannot be considered sustainable if its payment prevents a country from affording climate resilience plans.
8. Governments and international organisations should support and work towards the reform of the international financial architecture, in order to bring international finance in line with universally accepted human rights obligations, including the right to development, gender equality and the right of all to live in a healthy environment. Such reform should address the need for a fair, transparent and multilateral framework for debt crisis resolution, under the auspices of the UN and not in lender-dominated arenas, that addresses unsustainable and illegitimate debt;
9. Governments and international organisations should focus on actions that address the root causes and historical responsibilities for the present debt and climate emergencies. Peoples´ rights to participate in and control the decision-making and implementation of policies to ensure a just and inclusive transition must be guaranteed. There are a number of initiatives being discussed, such as debt-for-climate swaps, and market-based solutions like green bonds and nature-performance bonds that are unlikely to generate fair outcomes in this regard, and could actually add to the debt burden of climate vulnerable countries.

Signatories

International and regional
350.org
Action Aid International International and regional
Campaign of Campaigns International and regional
Réseau CADTM Afrique Mali
Center for Economic and Social Rights International and regional
Corporate Accountability International and regional
Feminist Task Force International and regional
Fridays For Future, MAPA International and regional
Global Campaign for Education International and regional
Institute of the Blessed Virgin Mary - Loreto Generalate International and regional
Oil Change International International and regional
Oxfam International International and regional
Sisters of Charity of Nazareth Congregational Leadership International and regional
Society for International Development (SID) International and regional
The International Union for Experts of Sustainable Development International and regional
Third World Network International and regional
UNANIMA International International and regional
YOUNGO International and regional
Amigos de la Tierra America Latina y el Caribe - ATALC Latin America and the Caribbean
Climate Action Network Europe Europe
Equal Asia Foundation (Stichting EqualA Foundation) Asia
Fight Inequality Alliance, Asia Asia
Jubilee USA Network United States
Red Latinoamericana por Justicia Económica y Social (Latindadd) Latin America and the Caribbean
WoMin African Alliance Africa
European Network on Debt and Development (Eurodad) Europe
Asian Peoples’ Movement on Debt and Developmen (APMDD) Asia
African Forum on Debt and Development (Afrodad) Africa

Africa
Abibinsroma Foundation Ghana
ACTION SOLIDAIRE INTERNATIONAL - ASI Senegal
Africa Coal Network Ghana
Afrique Eco 2100 Togo
AfroLeadership Cameroun
AJECC - Association des Jeunes Engagés contre le Changement Climatique Togo
Alliance for Empowering Rural Communities Ghana
Associação Cívica Laulenu Angola
Benin YOUTH4CLIMATE Benin
CANZIM Zimbabwe
Center for Peace Education and Community Development Nigeria
Centre for Human Rights and Climate Change Research Nigeria
Focus of Disabled Persons Kenya
Gender Based Violence as a Public Health Issue Nigeria
Greater Purposes For Development Organization Sierra Leone
Greater Whange Residents Trust Zimbabwe
International Federation of Sustainable Development Experts Egypt
Mains Libres Maroc
Natural Justice South Africa
Ong EDER (Environnement, Développement et énergies Renouvelables) Conakry
Plataforma Mulheres em Acção Angola
SEATINI Uganda
Women in Mining in Nigeria Nigeria
Youth Association for Angola Community development (AJUDECA) Angola
YWCA of Nigeria Nigeria
Zimbabwe Coalition on Debt and Development (ZIMCODD) Zimbabwe
APPUI SOLIDARITE POUR LE RENFORCEMENT DE L AIDE AU DEVELOPPEMENT Mali
Ecology Africa Foundation South Africa
ANEEJ Nigeria

Asia
350 Pilipinas Philippines
ALTSEAN-Burma Burma
Bangladesh Institute of Human Rights Bangladesh
Center for migrant advocacy Philippines
Center for Participatory Research and Development-CPRD Bangladesh
CLEAN (Coastal Livelihood and Environmental Action Network) Bangladesh
Climate Science Indonesia Indonesia
Climate Watch Thailand Thailand
DIVA for Equality Fiji
Eco Heart Foundation Nepal
ENVIRONICS TRUST India
Go Green With QAU Pakistan
KIRDARC Nepal
KRuHA - People’s Coalition for The Rights to Water Indonesia
Makesense PH, LCOY PH Philippines
Micronesia Conservation Trust Micronesia
National Campaign for Sustainable Development Nepal Nepal
National Hawker Federation India
National Labour Academy Nepal
Pakistan Kissan Rabita Committee Pakistan
RDPI - Rural Development Policy Institute Pakistan
RIHRDO (Rural Infrastructure and Human Resource Development Organization ) Pakistan
Rivers without Boundaries Mongolia
Rural Area Development Programme (RADP) Nepal
Task Force Detainees of the Philippines Philippines
Transparency International Korea Korea
UNISC International Japan

Latin America and the Caribbean
RENICC Nicaragua
Fundación La Hendija - Unidad de Vinculación Ecologista (UVE), Paraná, Entre Ríos. Argentina
Agencia prensa rural Colombia
Alianza para la Conservación y el Desarrollo (ACD) Panama
asociacion jovenes en red El Salvador El Salvador
Asociación Argentino Uruguaya de Economía Ecológica y Universidad Nacional de Rosario Argentina
Derecho Ambiente y Recursos Naturales DAR Peru
Asociación Generaciones de Paz (ASDEPAZ) El Salvador
ASP Bolivia
Caribbean Policy Development Centre Barbados
Centro de Defesa dos Direitos Humanos Brasil
Centro de Derechos Económicos y Sociales - CDES de Ecuador Ecuador
Centro de Documentación en Derechos Humanos “Segundo Montes Mozo S.J.” (CSMM) Ecuador
Centro Empresarial El Champal SAC Peru
Centro Memorial “Martin Luther King” Cuba
CESTA Amigos de la Tierra El Salvador
Coalicion de Tendencias Calasistas en la Diversidad Venezuela ( CTCDVENEZUELA) Venezuela
Colectivo Voces Ecológicas COVEC Panama
Comuna Caribe Puerto Rico
Comuna Urupagua Venezuela
Confederación Campesina del Peru Peru
Costa Rica Integra Costa Rica
CTA-Autónoma Argentina
DAUGE A.C. Mexico
Diálogo 2000-Jubileo Sur Argentina Argentina
Dinamismo Juvenil A.C. Mexico
Eko consultores Ecuador
Fundación Manos Anaranjadas Republica Dominicana
FUNSALPRODESE El Salvador
Gestos Brazil
GFLAC Ecuador
Grito dos Excluidos Continental Brasil
Illa, centro de educación y comunicación Peru
International Rivers Brazil
Intipachamama Nicaragua
Jubileu Sul Brasil Brasil
Marcha Mundial de las Mujeres Macronorte Peru Peru
Movimiento Tzuk Kim-pop Guatemala
Observatorio Petrolero Sur Argentina
Organización Fraternal Negra Hondureña OFRANEH Honduras
Otros Mundos Chiapas Mexico
Pedagogías de la Oralidad Peru
Peru Equidad Peru
RACDES El Salvador
Reaccion Climatica Bolivia
Red de defensoras del ambiente y el Buen Vivir Argentina
Red Mexicana de acción frente al Libre Comercio-RMALC Mexico
SEFRAS Brasil
Serapaz Mexico
SIEMPREVIVAS Puerto Rico
SOBREVIVENCIA, Amigos de la Tierra Paraguay Paraguay
XR Argentina Argentina
YouthSpeakUp Trinidad and Tobago
Accion Ecologica Ecuador
Polo Democrático Alternativo Internacional Colombia
Equidad de Genero ciudadania trabajo y familia Mexico

Europe
ACEP Portugal
Adéquations France
ATTAC España Spain
Both ENDS Netherlands
CADTM France France
CAFOD United Kingdom
Christian Aid United Kingdom
CNCD-11.11.11 Belgique
Co-ordination Office of the Austrian Bishops’ Conference for International Development and Mission (KOO) Austria
CROSOL Croatia
Debt Justice Norway Norway
Economistas sin Fronteras Spain
Enginyeria sense Fronteres Spain
Equinox Initiative for Racial Justice Belgium
Erlassjahr.de Germany
Estonian Roundtable for Development Cooperation Estonia
Eurasian Diplomatic Center Serbia
Friends of the Earth Scotland Scotland / UK
Global Justice Now United Kingdom
Global Policy Forum Europe Germany
Global Social Justice Belgium
Glopolis Czech Republic
Islamic Relief Worldwide United Kingdom
Jubilee Debt Campaign United Kingdom
Jubilee Scotland United Kingdom
Justícia i Pau Spain
Lafede.cat - Organitzacions per a la Justícia Global Catalunya
Lithuanian NGDO Platform Lithuania
medicusmundi Spain
National Society of Conservationists - FoE Hungary Hungary
Observatori del Deute en la Globalitzacio Spain
Oikos - Cooperação e Desenvolvimento Portugal
Plataforma Auditoria Ciudadana de la Deuda (PACD) Spain
Plateforme Française Dette et Développement France
SOMO Netherlands
Stamp Out Poverty United Kingdom
Trócaire Ireland
WECF International Netherlands
Womankind Worldwide United Kingdom
ritimo France
World Economy, Ecology and Development - WEED e.V. Germany
FOKUS-Forum for Women and Development Norway
fets Spain
ATTAC Spain
Soroptimist International United Kingdom
Swadeshi Bureau for Alternative Globalisation The Netherlands
Xarxa D’Economia Solidaria Catalunya
Marea blanca de Catalunya Catalunya
Plataforma en defensa de la sanitat publica de Polinyà Spain
whalley Range Climate Action Group, Manchester UK
Jubilee Debt Campaign, Manchester United Kingdom
Global Justice Manchester England UK
Forn de teatre Pa’tothom Spain
War on Want United Kingdom
Bretton Woods Project United Kingdom
Christian aid ireland Ireland
11.11.11 Belgium
SLOGA Slovenian NGDO platform for development, global education and humanitarian aid Slovenia
CIDES Spain

North America
Climate Emergency Institute Canada
EnGen Collaborative United States
Friends of the Earth US United States
Human Nature United States
IFBPW United States
KAIROS: Canadian Ecumenical Justice Initiatives Canada
Sisters of Charity Federation United States
Sisters of Charity of Nazareth Western Province Leadership United States
Sisters of Charity of Seton Hill Generalate United States
The Global Sunrise Project Canada
Fondazione Proclade Internazionale-onlus United States
Maryknoll Office for Global Concerns United States
Democratic Socialists of America, International Committee, Economics + Trade United States

Australia
Aid/Watch Australia
Jubilee Australia Australia
Madden Sainsbury Foundation Australia