Helping Climate-Vulnerable Nations
A professor at the head of BU’s Global Development Policy (GDP) Center has an eye to a growing climate (and financial) crisis and how to help. Developing countries need to accelerate investment in climate adaptation and improvement, but dozens spend more paying down interest on their loans than they do on health and education.
Kevin Gallagher and the GDP Center he directs have a robust plan to address this crisis. The professor of global development policy at the Frederick S. Pardee School of Global Studies is part of an international collaboration advancing debt relief to aid these countries in a green and inclusive recovery. As the international community works to dig out of this crisis and avoid future ones, the research group proposes steps to help struggling countries recover financially while continuing to invest in climate and development. By granting significant debt reductions, loans can be restructured to help countries transition to sustainable, low-carbon economies.
There is, in fact, an existing framework to restructure overloaded debt burdens, but it has flaws. For example, middle-income countries cannot participate, it does not suggest a way to bring all creditors to the table, and the debt relief it provides is not forward-thinking enough to produce sustainable change.
In contrast, the plan from the GDP Center is “really about letting everybody in, creating incentives for all creditors, and linking the debt relief to social and environmental goals,” says Gallagher. “[It’s] not just turning the lights back on.”
Individual countries—despite their financial struggles—can do their part in achieving environmental and sustainability goals. Gallagher believes this plan truly lives up to the mandate of the GDP Center: “What is a nonpartisan, empirically based, theoretically driven way of dealing with this, that doesn’t take a side with bondholders or governments? Hopefully, it can help the policy discourse and turn into policy change.”