In order to stabilize the global climate, by 2030, investments in developing countries must increase by USD 4.5 trillion (or 4,500 billion). SFL makes a series of proposals that could be decided at the international climate summit COP28 in Dubai to enable countries to invest sufficiently in the sustainable transition in the short term. These include increasing the lending capacity of multilateral development banks, introducing international taxes and debt relief.

Special attention is paid to the redistribution of SDRs. These are issued by the IMF and can be exchanged for currency, such as dollars, to be invested in climate mitigation and adaptation measures. Through a joint proposal on hybrid capital by the African Development Bank and the Inter-American Development Bank, hundreds of billions in SDRs now sitting unused in rich countries’ accounts could be freed up for developing countries in the short term.

The report further includes a set of recommendations to reform the international financial architecture to make it fairer, more inclusive and greener without creating a new debt crisis.

The report can be downloaded here.