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16 March 2022, 10:00 - 11:30 Indochina Time / Bangkok | By invitation only

Banner of Workshop on Debt for Climate Swaps

This workshop is a pre-event of the Pacific Regional Debt Conference with aim to enhance understanding among relevant stakeholders of how debt for climate swaps work and what practical steps are needed for debtor countries to prepare and negotiate a deal with their creditors.

 

Although climate change presents a multitude of challenges for all countries globally and in Asia and the Pacific, its adverse effects are proving particularly severe for the Pacific small island developing States (PSIDS), which are likely to experience severe changes in temperature, extreme precipitation, storm surges and tropical cyclones, flooding, drought, soil erosion, and sea-level rise. All of this could cause food and water insecurity, loss of lives and livelihoods, climate-induced migrations, and trillions of US dollars in losses per year.

 

The PSIDS are characterized by a high degree of economic vulnerability due to the relatively small size of their economies and dependence on just a few key industries such as tourism, agriculture, or fisheries. They are least likely to afford to invest in climate actions. Also, all disruptions caused by the COVID-19 pandemic, severely affected government revenues and increased government expenditures, increasing fiscal deficits and the risk of debt distress.

 

A potential mechanism that can contribute additional financing for climate action while also providing debt relief is debt for climate swaps. A debt swap entails a scenario in which a creditor exchanges debt owed to them for another asset. For the debt for climate swaps, the debtor government commits to invest the accrued savings from debt forgiveness in climate adaptation or mitigation.

 

This workshop presents the results of an assessment on the feasibility of debt for climate swaps in the Pacific SIDS, undertaken by ESCAP, and discusses the experience of selected countries that have implemented or are negotiating with their creditors a debt for climate swap deal. The workshop also discusses the experience and plans of the Pacific on related financing instruments, such as green bonds and the Pacific Resilience Facility, which can be useful for the implementation of debt for climate swaps.

for more information, please contact

Macroeconomic Policy and Financing for Development Division +66 2 288-1234 [email protected]
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