Global South countries are afflicted by the dual challenges of climate change and sovereign debt. These issues promise to be the defining issues for global development in the coming decade (UNCTAD, 2025). Termed the ‘doom loop’, the debt and climate crises are mutually reinforcing: countries borrow to address climate change, then rising debt burdens constrain mitigation and adaptation (Zenios, 2024). Analysing the climate-debt nexus as a dual crisis and not as two separate challenges is necessary, as policy prescriptions pitched as ‘solutions’, such as debt-for-climate swaps, are currently proposed to tackle both climate and debt in conjunction.
This presentation analyses the climate and debt nexus and proposed solutions through the framework of neo-dependency theory, based on the idea that most Global South countries are stuck in poverty due to the unequal exchange of resources between the Global South and wealthier nations (Kvangraven, 2023). It draws on empirical evidence from countries that experience extensive climate risks and that have recently been through IMF restructuring to make the case for 21st Century climate and debt dependency.
References
Kvangraven, I. H. (2023). Dependency theory: strengths, weaknesses, and its relevance today. In A Modern Guide to Uneven Economic Development (pp. 147-170).
UNCTAD (2025). A World of Debt: Report 2025.
Zenios, S. A. (2024). The climate-sovereign debt doom loop: what does the literature suggest? Current Opinion in Environmental Sustainability, 67, 101414.
