Addressing the Twin Crises of Debt and Climate: Exploring Unconditional Debt Cancellation

The capacity of many developing countries to address climate change is severely constrained by mounting debt burdens and limited fiscal spaces. Meanwhile, the finance mobilized at the international level for climate change mitigation and adaptation have not only been far below what is needed, but also fell short of the amount promised until 2022. This article aims to explore and discuss the multifaceted challenges posed by the interplay of debt and climate crises, and to examine various proposals aimed at tackling the issue through the lens of climate finance and climate justice. This article argues that, from a historical and justice perspective, debt cancellation is the only approach that comes close to acknowledging historical debt injustices and the scale of the ‘climate debt’ owed by developed countries to developing countries as a consequence of historical emissions and resource exploitation. It may also be the only realistic option for addressing climate change adequately from a purely financial point of view. The article concludes with an interview-based exploration of different strategies for how debt cancellation can be brought about.