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A new report, “Breaking the cycle of risk: Addressing resilience and debt for a new global financial architecture”, shows that we have the opportunity to move climate vulnerable countries out of debt by reforming the financial architecture.

The report, by E3G and Mistra Geopolitics, explores the relationship between climate, debt and resilience and the influence of geopolitics. It concludes that, as we consider how to reform the international financial architecture to fund the climate transition, we can map the journey out of the debt and resilience crisis for climate vulnerable countries.

Key findings in the report include:

• Resilience is essential to the success of economies and societies and the smart economic option, but the vicious cycle between the debt and climate crises, intertwines a lack of economic resilience with a lack of climate resilience, creating fragility.
• The availability of financial aid remains inadequate, while vulnerability itself leads to higher interest rates, making debt harder to pay off.
• Clear roadmaps, and transition plans, will help frame the roles, and actions, of debtor countries, their donors and creditors in emerging from the present crises.
• The debt products, the institutions, and the whole social contract between these parties must move to a more just, mutually engaged and supportive one, if the world as a whole is to move to a more resilient future.