The Architecture for a Debt-for-Climate Initiative

Background Paper #4:
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The Debt-for-Climate Initiative (DCI) is an effort to provide comprehensive debt relief for eligible countries to generate fiscal space for climate action. The DCI aims at achieving maximum creditor and debtor participation. The DCI consists of three pillars. The first pillar involves debt-stock relief for countries with an unsustainable level of debt and high climate vulnerability and risk of biodiversity loss. The second pillar provides debt flow relief by rescheduling debt maturities with or without coupon reductions for coun-tries facing liquidity problems. The third pillar engages those countries not eligible un-der the first two pillars that have high climate vulnerability and risk of biodiversity loss through debt standstill agreements. All pillars include debt-for-climate swaps as well. To operationalise the DCI, we propose a multi-level structure to involve relevant debtors and creditors.

» More about the „Debt Relief for Green and Inclusive Recovery“ initative

Product details
Date of Publication
Dezember 2020
Publisher
Heinrich Böll Foundation
Number of Pages
35
Licence
Language of publication
englisch
Table of contents

Abbreviations
Abstract
Executive Summary
1 Introduction
2 Context
3 The Debt-for-Climate Initiative
3.1 Eligibility
3.2 The three pillars
3.3 Participation of creditors
3.4 The instruments of the Debt-for-Climate Initiative
3.5 The Climate Investment Trust Fund
3.6 Additional incentives linked to climate investment projects
4 Conclusions
References
Authors’ Bios