Question

To ask the President of COP26, what plans he has to take forward discussions on debt from the March 2021 Climate and Development Ministerial meeting as part of the programme for COP26.

Fiscal space and debt sustainability was one of four key themes I took forward at the Climate and Development Ministerial in March. I have continued to prioritise this issue, for example in engagements with the IMF, World Bank and climate vulnerable countries, and welcome progress has been made.

Since March, the G20 and Paris Club have agreed to a further, final extension of the Debt-Service Suspension Initiative (DSSI), which is providing much needed short-term fiscal space to help countries tackle the immediate effects of the pandemic and avoid a worsening of debt problems. The G20 and the Paris Club have also continued implementation of the Common Framework for Debt Treatments, designed to provide a more long-term solution to debt vulnerabilities.

The IMF have implemented a historic $650bn allocation of Special Drawing Rights (SDRs), which will boost global liquidity and provide fiscal space, and G7 Leaders agreed to magnify the impact of this allocation by considering options for voluntary SDR channelling to developing and vulnerable countries.

Finally, the UK-led G7 Private Sector Working Group is also exploring the development and use of Climate Resilient Debt Instruments (CRDIs) that quickly suspend debt service repayments following a pre-defined climate-related event or shock.