Debt is a major driver of the climate crisis because it forces affected countries to continue extracting fossil fuels and to base their economy on their export in order to be able to pay back their debt
Pope Francis welcomes Debt for Climate co-founders Juan Pablo Olsson and Esteban Servat at the Vatican on Wednesday, March 8, 2023
Pope Francis today gave his blessing to a global campaign which demands the cancellation of the financial debt of impoverished nations to enable climate action. “Thank you for work uniting people. Keep going, you have my support,” said the pontiff as he welcomed Debt for Climate co-founders, Juan Pablo Olsson and Esteban Servat to their face-to-face meeting in the Vatican.
Debt for Climate is a growing global grassroots campaign addressing the twin crises of climate change and debt. It is bringing together workers, faith groups, indigenous, feminist, social and climate activists from around the world and calls on richer countries, the World Bank and IMF, to cancel the crippling foreign debt of countries in the Global South to enable a just transition - meaning a worker-led shift away from fossil fuel-based economies. The campaign argues that debt is a major driver of the climate crisis because it forces affected countries to continue extracting fossil fuels and to base their economy on their export in order to be able to pay back their debt.
Many low and middle income nations are thus locked into a cycle where the fastest way for them to service their debts, is to extract coal, oil, and gas to sell to richer countries. But low and middle income countries are also often the worst hit by climate change. Nations devastated by climate impacts are often forced to take on more debts to respond to crises such as floods, fires, or droughts, locking them into a cycle of continually extracting the fuels that are damaging them.
The Pope’s support for debt cancellation to enable a just transition is timely as it comes just days after the Munich Security Conference, which warned that mounting debt and increasingly severe climate impacts in impoverished countries could cause global destabilization. This analysis is also backed by the scientific community; the Intergovernmental Panel on Climate Change (IPCC) recently recognized that addressing unsustainable debt is central to responding to the climate crisis, as indebted countries are unable to invest in either adapting to climate risks or transitioning to clean energy. Last month, while laying out his priorities for this year before the UN General Assembly, Secretary General Antonio Guterres listed the debt crisis as an urgent problem, calling for "a new debt architecture that encompasses debt relief and restructuring to vulnerable countries, including middle-income ones in need."
60% of low-income countries and 30% of middle-income countries are either already in, or at high risk of debt distress - that is, unable to pay back loans and their associated interest - according to the International Panel of Experts on Sustainable Food Systems (iPES).
"Pope Francis is a global leader on social and climate justice. He recognizes the climate debt that the biggest carbon emitters in the Global North owe to countries in the Global South, who have polluted less but are worse hit by climate change,” said Argentine environmental sociologist Juan Pablo Olsson, co-founder of Debt for Climate.
“Cancelling the financial debt of the Global South is a critical first step to right that wrong.”
Mass mobilization of workers, indigenous & climate activists in Buenos Aires(Argentina) as part of global launch of Debt for Climate during G7 Summit in June 2022
“Our countries of the Global South owe trillions of dollars of debt, and spend hundreds of billions of dollars every year servicing the interests on that debt. This keeps them from being able to fulfill any climate pledges, and forces them to continue expanding the fossil fuel industry. Cancelling this debt would lead to unprecedented climate action globally by enabling a just energy transition that could leave trillions of dollars of fossil fuels in the ground,” said German-based Argentine scientist and Debt for Climate co-founder Esteban Servat.
With a presence in more than 30 countries, Debt for Climate was launched last summer during the G7 summit, mobilizing thousands of workers, indigenous, social and climate activists around the world.
“It is vital that the Global South and workers globally, including in the fossil fuel industry, benefit from the move to renewables,” said Servat. "While Global North governments and multilateral institutions are failing us and the climate crisis is getting out of hand, we must build a bottom-up, people-focused and worker-led alternative that puts social justice at the centre of climate action.”
Mass mobilization of climate activists in Garmisch (Germany) as part of global launch of Debt for Climate during G7 Summit in June 2022