Pakistani Prime Minister Shebaz Sharif told world leaders at the COP27 climate change talks last November that if developing countries were forced to rely on markets to finance the growing costs of climate change, they would He warned of the danger of falling into a “financial debt trap.” Six months have passed since then, and with interest rates and temperatures rising, his forecast looks prescient.
Cyclone hits southeastern Africa so far this year, Floods have killed hundreds in Rwanda, Congo and Uganda. The worst drought in 40 years has dried up crops in the Horn of Africa. Record temperatures are currently being recorded across Southeast Asia, Cyclone Mocha hit Bangladesh and Myanmar and dried up agricultural areas in Argentina.
Those events often become humanitarian crises. They are also expensive and are getting more expensive. , the average cost of capital for a select group of 58 climate-vulnerable countries is 10.5%. Report published in April By Boston University Center for Global Development Policy. That compares with the Bloomberg Barclays Emerging Markets Index sovereign bond yield of 4.3% over the past decade.
