47 countries will go bankrupt if they spend to achieve the Paris Agreement and the Sustainable Development Goals

The United Nations Environment Program estimates that developing nations will need up to €364 trillion each year in public finance for climate adaptation this decade.

Pressure is growing for global financial reforms to help developing countries tackle climate change, transmits Euronews.

An open letter was sent to G20 leaders this week ahead of the annual meetings of the World Bank and the International Monetary Fund (IMF). It calls on them to end "crippling debt" for developing nations and introduce new measures to "make polluters pay".

Among the signatories are the former Prime Minister of Denmark Helle Thorning-Schmidt, the former Prime Minister of New Zealand Helen Clark, the architect of the Paris Agreement Christiana Figueres, as well as other influential figures and celebrities.

A more than 100-strong group of actors, politicians, artists and experts say world leaders must triple their financial support for climate mitigation and tackle the "unjust debt" they say is holding back action.

The world is wracked by conflict, food insecurity, biodiversity loss and spiraling inflation. All of these are compounded by the devastation caused by climate change. The Sustainable Development Goals are under threat. Too many feel scarcity, austerity, despair," reads the letter coordinated by the non-profit communications agency Project Everyone.

It goes on to say that the architects of the World Bank and the IMF have earned their place in history, but current leaders must continue their legacy.

This is your chance to deliver on their promise: to transform these instruments of peace and prosperity and truly set them to work in our common interest. Triple the investment. End crippling debt. Make polluters pay. It's time to taste hope again," the letter added.

A financial system fit for the 21st century

The letter echoes statements made by the UN climate chief Simon Steele in London last week.

Steele said more climate finance should be made available through debt relief, cheaper financing for poorer countries and new sources of international financing.

He also stressed that development banks must be reformed to work better for developing countries, including climate in decision-making and building a "financial system fit for the twenty-first century".

It is difficult for any government to invest in renewables or climate resilience when the coffers are empty, debt service costs have outpaced health care costs, new borrowing is impossible and poverty is on the doorstep,” Steele said.

Every day, finance ministers, CEOs, investors and development bankers channel trillions of dollars. It's time to redirect those dollars from the energy and infrastructure of the past to a cleaner, more sustainable future. And to ensure that the poorest and most vulnerable countries benefit," he added.

Record debt could push climate costs to the brink

Record debt could prevent developing countries from taking climate action, a new report says. Its findings only underscore why calls for urgent reforms of global financial policy are needed.

The Debt Relief Project for Green and Inclusive Recovery (DRGR) and Boston University found that 47 countries will reach the IMF's default thresholds in the next five years if they spend as much as they need to meet the Paris Agreement and the Sustainable Development Goals.

The Boston University report said the $400 billion these countries would pay in foreign debt service — the money needed to pay the principal and accrued interest — would make them unable to allocate funds to adapt to climate change.

The countries combined have a combined population of over 1,11 billion people and currently spend more on foreign debt service than on health or education.

The United Nations Environment Program estimates that developing nations will need up to €343 billion each year in public finance for climate adaptation this decade.

In 2021, the latest year for which data is available, only €20 billion was provided by developed countries.