2° Investing Initiative (2DII) is contributing to the Summit for a new Global Financing Pact. This Summit hosted by France will be a forum for countries to discuss a new contract between Global North and South countries to address climate change and other contemporary challenges.
2DII is organising a panel discussion labelled by the Summit on Friday 30th, 4:30-6pm CET. The panel will comprise Kevin Bender (Director for Greening Sovereign debt at The Nature Conservancy – debt-for-nature swaps expert), Jahan Chowdhury (Global Lead for Environment and Climate at the International Fund for Agricultural Development, United Nations – climate change adaptation expert) and Riwan Driouich (Senior Economist at 2 Degrees Investing Initiative – climate finance expert).
Before you meet with the panel next Friday, Riwan Driouich, Senior Economist at 2DII, answers some questions to introduce the discussion.
What are debt-for-adaptation swaps, and what is the potential of such tools to reduce climate and financial vulnerabilities of developing countries?
The conversation will question how debt-for-nature swaps can contribute to addressing financing climate change adaptation and addressing the financial vulnerabilities of developing countries. Debt-for-nature swaps are financial transactions enabling a beneficiary country to reduce its debt in exchange with a commitment to spend part of this relief in environmental protection measures, including adaptation to climate change. The panel will discuss the conditions under which their rollout and efficiency can be maximised, offering practitioners’ insights on the financial structuration of such transactions, their use-of-proceeds, investors’ appetite …
Is the international monetary system fit to cope with climate change impacts?
The panel will then discuss if the international monetary system is fit to address the causes and consequences of climate change. For instance, the international monetary system is known to feature procyclical tendencies in developing countries, which are a vector of financial instability. Climate change impacts will strengthen macroeconomic instability, which may be amplified by such procyclical tendencies. The panel will discuss the key deficiencies of the international monetary system when it comes to dealing with climate change impacts, and identify reforms and initiatives which could contribute to palliate such deficiencies.
Adopting a pre-emptive approach to the macro-fiscal risks and strengthened financing flow at speed and scale needed by climate change may require revisiting key dimensions of the international monetary system.
