A debt crisis is emerging in the Global South at the precise moment when substantial investment is needed to meet shared climate and development goals. Yet, the G20 Common Framework has been unable to engage all creditor classes or link debt relief to climate and development.

How can emerging market and developing economies (EMDEs) find financial and fiscal stability while making the investments necessary to transition to sustainable and low-carbon economies? How does climate vulnerability impact a country’s debt sustainability? What level of restructuring is required across creditor classes for debt distressed EMDEs to achieve debt sustainability? And how could the G20 Common Framework be reformed to provide debt relief for a green and inclusive recovery?

A new report by the Debt Relief for a Green and Inclusive Recovery (DRGR) Project analyzes new data on the level and composition of public and private external sovereign debt for EMDEs. The report finds that, for 61 countries identified as in or at high risk of debt distress to achieve debt sustainability, more than $812 billion in debt needs to be restructured across all creditor classes. At least $30 billion in debt should also be suspended over for the next five years for the most debt-distressed countries.