‘Everything is connected’: How climate and debt justice are linked – and why we have to tackle both

“[…] we cannot ignore one fundamental fact, namely that the many moral, social, political and economic crises we are experiencing are all interconnected, and what we see as isolated problems are actually causes and effects of one another.”

So said Pope Francis in his message for New Year’s Day 2023 – the Church’s World Day of Peace.

The idea that “everything is connected” is a theme the Holy Father has returned to time and again as Pope. The Pope recognises that the struggles our global family and our common home are facing have roots in the same causes, and that to overcome them, we need to tackle these crises side by side.

The climate crisis and the debt crisis are stark examples. Countries need money to prepare for climate disasters and rebuild when they strike, yet many of the countries hardest hit are being forced to pay huge debts – taking money away from efforts to address the climate emergency.

That’s why in 2023, we’re calling for leaders to draw the connections between climate and debt justice and tackle the climate and debt crises together.

Call for action to cancel the debt

How are climate and debt justice connected?

From floods, hurricanes and droughts to lost crops, homes and livelihoods, millions of people around the world are facing the reality of the climate crisis.

But rather than being able to spend the money needed on rebuilding from these climate disasters – and preparing for future catastrophes – governments in low-income countries are being forced to pay billions of dollars in debts, and spiralling interest payments, to lenders in rich countries.

Many of the countries most vulnerable to the effects of the climate emergency are those that are also facing a debt crisis. In fact, countries across the global south are currently spending five times more on debt repayments than they are on tackling the impacts of the climate crisis.

What make this injustice even more outrageous is that the countries on the frontline of the climate crisis are those that have contributed least to causing it.

Join calls to cancel the debt

Why are countries in debt?

Along with collecting taxes, all governments borrow money to pay for key public services such as their health and education systems.

Lenders often charge governments in low- and middle-income countries higher interest rates because they believe there is a greater risk that these governments will be unable to pay back those debts. Being paid the extra interest that comes with higher interest rates means that lenders’ profits can be bigger.

Events in recent years have left many of these countries unable to pay back debts. Economic shocks such as the Covid-19 pandemic and climate disasters such as floods and cyclones have slashed the revenues that governments in many low- and middle-income countries have been able to collect.

This reduced revenue makes it difficult to repay debts to these private lenders.

Why we need to cancel the debt – and how we can do it

No country should have to choose between rebuilding from a disaster or face being sued by lenders refusing to cancel debts. As Pope Francis has reminded finance leaders, “It is not right to demand or expect payment when the effect would be… hunger and despair for entire peoples”.

Yet big banks and hedge funds are holding low- and middle-income countries to ransom. They’re acting like cowboys – making millions from interest payments while governments struggle to pay for measures to tackle the climate crisis.

The UK is in a special position to stop this.

Ninety per cent of contracts between private lenders and governments state that they’re subject to English law. This means that lenders can threaten to take countries facing a debt crisis to court in the UK if they fail to repay debts and huge interest payments.

A group of MPs has called for the government to look at changing the law to prevent lenders from forcing countries to have to make the impossible choice between paying debts and paying for public services.

We want to make sure all MPs are aware of the connections between the climate crisis and the debt crisis and to let them know what their colleagues have called for.

So join our campaign and add your voice for calls to Stop Cowboy Lenders so that countries don’t have to face the choice between paying huge debt bills and tackling the climate crisis.

Call for the government to Stop Cowboy Lenders