Canceling the Debts of Global South Nations: A Necessary Part of the Worldwide Climate Effort – Part 1
We finally have a fairly widespread understanding that we must stop burning fossil fuels to solve the climate crisis. It is just as true that we must cancel the debts of Global South nations to solve the climate crisis. There is no other way. I recognize that statement will strike some of you as radical or unreasonable. It’s taken me some time to reach this conclusion. In this post I’ll try to show how I, and others, have arrived at this position.
We know that emissions anywhere cause climate change everywhere. That means that humanity must stop emissions everywhere.
We must stop emissions in the wealthy, developed nations (the Global North) that have been the primary cause of the climate crisis. But that will not be sufficient. By 2030, 50% of all global emissions will come from the poorer nations that we collectively term the “Global South” (not including China). Eliminating emissions from the Global South is key to solving the climate crisis and will improve public health and prosperity in those nations.
Many Global South nations are in a debt crisis
Nearly 60 countries of the Global South are in debt distress or at risk of it and are particularly vulnerable to the effects of climate change. As the CEPR (Center for Economic and Policy Research) reports, “The combined burden of the climate crisis and increasing debt, perpetuated by an unfair international financial architecture, is a recipe for economic and social devastation: as climate disasters strike, these countries are being forced into choosing between servicing debt and saving lives. … [S]ervicing debt is a direct obstacle to these countries’ ability to respond to climate disasters and to finance basic services and long-term development needs.”
Money is moving from the poor to the rich
In 2022 the developing nations paid $443.5 billion in debt service, most of it to the Global North. In Nigeria, the largest economy in Africa, the amount required for debt service is more than half of all government revenues. That’s money moving from the Global South to the Global North.
I was raised to believe it is important to repay your debts. However, there are times when that is not just, equitable, or even possible. To insist that the current debts of the Global South be repaid is to insist that the poor of the world give more money to the rich of the world. It is also to insist that debt repayment is more important than solving the climate crisis that threatens us all. I don’t think that is a morally justifiable stance.
Illegitimate debts
According to ODI, a global affairs think tank, “The current debt crisis did not emerge because governments mismanaged public finances.”
Many of the debts are illegitimate in one way or another. Some are from loans made to dictators or governments known to be corrupt and did not benefit the people of the nations now expected to repay them. Some were made with conditions attached that damaged the domestic economies of the borrowing nations while creating profitable conditions for the donor nations. Many required that the money that was loaned be spent in the donor country, so that the donor country’s economy thrived while the poor nation accrued more debt. Some had unfair terms and some were promoted dishonestly.
Often the poor countries were forced to borrow because of conditions over which they had no control. Some loans go back to the 1970’s when the OPEC countries increased the cost of oil dramatically and many poor countries had to borrow to be able to import the oil needed to keep their economies functioning. The COVID crisis required virtually all nations to expand expenditures, but the poor countries could only meet the basic needs of their people by borrowing.
Loss and damage from catastrophic weather events caused by climate change has forced many Global South nations to borrow funds just to help their people survive. This is especially unjust since climate change was caused by the wealthy nations who are now extracting even more wealth from the poor nations through debt service.
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[This is Part 1 of a 2-part post. Please also read Part 2. If you would like to read, or share, both parts of the post together now, the full text is available now at https://docs.google.com/document/d/1yL_IVFduXXUjBFWNINVGOPzX5IshRPOjeM1FKe4qwII/edit?usp=sharing ]
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The photo above is from a march at the World Social Forum in Nepal in February 2024, courtesy of Debt for Climate.
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I read both parts together on the Google doc you provided. I very much enjoyed reading both parts together and did not think it was at all too long. That’s because it provided a clear summary of an important situation without getting into the weeds of a lot of detail. Well done! (Full disclosure: I was already familiar with this topic.)
I too read both parts, and agree it is easily grasped in a few minutes. There are assumptions in it which are doubtful. I expect blowback, but effective action requires a solid base.
The milking of resources by the powerful ‘North’ is correct. This has been going on for millennia including the Romans, Vikings, Mongols, Chinese Dynasties (& present CCP), various European nations, The British Empire, USSR/Russia, and US. Unfortunately, it is difficult to imagine a way to eliminate predatory behavior, as the UN has been impotent for decades. I’d like to be proved wrong.
Finite and shrinking resources are being cut into 4 times the slices as was the case a mere century ago. Population quadrupled. Migrations frequently occur because desperate people seek to increase energy throughput which generally enhances well-being. Try getting comfortable people to give up a lot of it. Note that only ~17% of 8B live in US, Canada, Europe, UK, AU/NZ. And most of them aren’t wealthy. See:
https://en.wikipedia.org/wiki/Maximum_power_principle (humans aren’t an exception!)
I was an expert in Currency Derivatives, and understand global finance fairly well. The debt of the US has been skyrocketing faster than ever in history. Many other ‘rich’ nations are in the same boat. Cancelling debts requires increasing other borrowings to offset the lost revenue unless spending is cut to do so. That’s a non-starter.
Lastly, global fossil fuel demand has not decreased despite the many solar and wind devices added yearly. The sun and wind might be renewable, but the infrastructure is only replaceable. The embedded energy in it is primarily fossil. The mining of metals and minerals, transport at each step, smelting, processing, fabrication, assembly, maintenance, disassembly at end of life, recycling what’s possible…all require energy and produce waste and pollution. There’s no free lunch.
I co-own a small e-list which includes William (Bill) Rees (developer of Ecological Footprint Analysis), Rex Weyler (co-founder of Greenpeace International), Alice Friedemann (author an runs Energy Skeptic Blog) Charles Hall (leader of Biophysical Economics), and other ecologists and scientists. I’ve been working pro bono on sustainability for 1/4 century. I’m not denying climate Change! I’m urging people to examine the science and probabilities of various actions. Shrinkage of human throughput is required. Women’s empowerment is the likely best choice in my opinion.
Dear Steven,
I agree that women’s empowerment is a key choice for moving things forward. I also agree that for long-term sustainability we will need to reduce consumption. However, I disagree with your claim that the “embedded energy” is always fossil fuels. The highly respected International Energy Agency has demonstrated that the world can run on renewable energy and that if we make the right choices we can get there by 2050. Making the right choices, of course, means wresting power from the fossil fuel industry and its enablers. This is no small task, but must be a major focus of our efforts. The other major focus must be redistribution of income, so that the resources currently being hoarded by the ultra-rich can be made available for needed climate action around the world. Again, this will only be possible if we build a powerful people’s movement.