Climate needs and debt to hit lower-income states hard

Significance Debt distress is related to both global financial conditions -- such as the strength of the US dollar -- and growing climate vulnerabilities. Greater attention and funding to these issues would minimise global ripple effects and support equitable, long-term development. Impacts Far less private finance than needed will flow to developing states with shallow domestic capital pools and high political and macro risk. Debt restructuring is likely to be more difficult for countries which owe a sizable share of their debt to private bondholders. Multilateral development banks will be pivotal institutions in the discussion around climate finance, including local currency lending.