The World Bank and the International Monetary Fund (IMF) are considering adding relief to climate change efforts. Climate change news

A source told Reuters that the new initiative would focus on changing the entire economy on a regular basis.

According to a draft document shown by Reuters, the World Bank and the International Monetary Fund (IMF) are planning to launch a platform to advise poor countries on financing climate and conservation activities, which could link these costs to debt relief, according to a draft document by Reuters. Agencies.

The discussion of the institutions towards this goal is detailed in a World Bank research paper on debt published for their annual Northern Hemisphere Spring Meeting on the Bank’s website on Monday.

The document states that the consultants have expertise in securing investments, including grants to UN officials, non-governmental organizations, private investors and even rating agencies, low-interest loans and conditional debt relief.

The initiative reflects the growing recognition that the economic turmoil of the COVD-19 epidemic has exacerbated budget constraints and debt challenges that have led some countries to shift to clean energy, protect wildlife or prepare for climate change.

“Instead of focusing on other projects simultaneously with this project, it will regularly focus on transforming the entire economy,” a source familiar with the initiative told Reuters. Decreasing biodiversity. “

In an interview in February, World Bank President David Malpas raised the possibility of linking relief to investment to tackle climate change and reduce fossil-fuel emissions, but gave no further details.

Green, elastic, included

It said it was creating an “organizational framework” to link debt relief to countries’ plans to invest in green relief in a “green, stable and inclusive development” or GRID – a new form of investment for banks.

“Countries that are close to their debt limits will need adequate grants and concessions for GRID financing, which can be increased through conditional debt relief or reconstruction,” the joint article said.

The United Nations estimates that fighting in the country’s Tigris region has exacerbated Ethiopia’s humanitarian and debt crisis, displacing more than two million Ethiopians. [File: Mohamed Nureldin Abdallah/Reuters]

The World Bank estimates that more than 30 of the world’s poorest countries are at risk or at high risk of a debt crisis. Three of them – Chad, Ethiopia and Zambia – are the world’s largest bilateral donors to China, and government credit payers have called for the restructuring of debts under a common framework agreed last year by the Paris Club of 20 other major economies.

Last month, a separate technical working group began work on the new T / Climate / Nature platform. It will provide technical assistance and data to countries about the potential investment of public and private sector experts and help them find public and private funding, the paper said.

A second source told Reuters that the plan was still in its infancy but the goal was to launch the platform by the end of 2021, a secretariat to be set up at the World Bank.

“If communicated in a way that does not take into account macroeconomic vulnerabilities and sustainable barriers to debt, climate change and damage to nature represent a systemic risk to the global economy,” the study said.

The platform, however, will not replace the discussion of debt treatment under 20 common framework groups, the document says. Instead, it may offer advice on how to proceed once a debt relief agreement has been reached.

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