As coronavirus cases have climbed across the world, the daily movements that once defined the lives of millions have all but ceased. The widespread suspension of travel and industrial activity has led to a dramatic fall in carbon dioxide (CO2) emissions. Research published in the journal Nature Climate Change recently showed that the carbon output of some countries fell by an average of 26% at the height of forced confinement measures. Remarkable as these numbers sound, this year’s lockdown won’t be enough to stall, let alone reverse, global heating.

The impact of the coronavirus on annual CO2 emissions could be just -4% if business-as-usual resumes by the middle of next month. Researchers believe this figure could reach -7% if some lockdown measures remain in place until the end of the year. To align with the more ambitious Paris Agreement targets, which stipulate that the global average temperature rise should be limited to 1.5°C, emissions must fall by 7.6% each year between now and 2030. Restrictions on individual behaviours, whether self imposed or state mandated, will not catalyse the necessary changes; only systemic action by policymakers and polluting industries will suffice. 

At 1.5°C of warming, weather extremes will become more prevalent across the world, as will high and low extremes in rainfall. According to a 2018 report by the IPCC, the UN’s climate science body, limiting warming to 1.5°C, rather than 2°C, could mean that 420 million fewer people are regularly exposed to extreme heat waves. Increases in the frequency and magnitude of droughts in some of the world’s warmer regions, such as the Meditterreanean and southern Africa, will likely be “substantially larger” at 2°C than at 1.5°C. Climate breakdown and Covid-19 share one definitive similarity: the most vulnerable populations, those least-equipped to deal with a crisis, are those that are being affected most profoundly. 

The coronavirus has shown us that the very institutions which levied unconscionable debts upon the Global South are reluctant to offer genuine aid. Since the 1980s, the International Monetary Fund (IMF) and the World Bank have forced austerity onto some of the world’s poorest countries as a condition for receiving a new loan, or a lower interest rate on an existing one. On paper, these “structural adjustment” programmes are meant to make recipient states more competitive and stimulate economic growth. But in practice, they’ve prohibited Global South nations from building the public services necessary for the effective handling of a crisis. 

Since the start of the pandemic, investors have withdrawn $83bn from emerging markets in a move the IMF has identified as the “largest capital outflow” ever recorded from low-income countries. At the same time, the devaluation of local currency and increased borrowing costs mean that, without intervention, and the burden of debt servicing will only rise. Commodity prices, exports and tourism revenues have all fallen simultaneously under lockdown, making the situation yet more acute. 

To date, there have been two types of support offered by the international community: new loans and a suspension of debt payments. Both provisions will only perpetuate the cycle of debt and costly borrowing, while reinforcing longstanding power imbalances between the lenders of the Global North and the debtors of the Global South. 

In mid-April, the IMF said it would cancel $215m in debt payments for 25 of the world’s poorest countries – including Liberia and Sierra Leone – over the next six months. That same week, G20 nations agreed to freeze bilateral government loan repayments for more than 70 low-income countries until the end of this year. However, the Jubilee Debt Campaign has deemed these measures “a drop in the ocean” compared to the level of debt cancellation required by low and middle-income countries over the next year, a figure it estimates could be as high as $300bn. Private creditors, such as bondholders and commercial banks, have thus far pushed back on requests for debt suspension.

Meanwhile, the World Bank has announced that it intends to provide loans and grants totalling some $160bn to low-income countries to help them combat and recover from Covid-19. It has already approved a $1bn loan for Kenya (just weeks after the IMF signed off on $739m in emergency financing for the country). Sums of $20m and $35bn are being disbursed to Senegal and Ghana, respectively, to strengthen their virus testing and tracing capacities. The World Bank has also provided $25m for emergency cash transfers to poor and vulnerable households in Pakistan. Last year, these four countries – along with 60 others – spent more on external government debt payments than on public healthcare. 

Countries contending with predatory loan repayments and structural adjustment regimes were simply not equipped to deal with a pandemic or its economic fallout. Wealthy lender nations have the ability to hike up their own national debt burdens to keep businesses on ice and services in action while the virus abates. The poorest nations of the Global South don’t enjoy this level of policy freedom. This is no coincidence. In limiting a government’s capacity to regulate its economy, the Global North has opened up channels for its own corporations to expand southward and engage in resource extraction. Such wide-open avenues will not readily be closed, even as the climate crisis advances. 

Destructive storms, turbocharged by a warming climate, have already ravaged some of the poorest nations on Earth. The response of the international financial community to last year’s cyclones in Mozambique set a worrying – if entirely predictable – precedent. On 14 March 2019, Cyclone Idai made landfall in the city of Beira, Mozambique as a category-4 storm. As it swept through Madagascar, Mozambique, Malawi, and Zimbabwe, some 1,300 people were killed and millions more were displaced. 

Mozambique, the sixth poorest country in the world, was already known to be suffering from a debt crisis caused by “secret” loans from London-based banks at the time. Just weeks later, Cyclone Kenneth made landfall as the strongest storm ever recorded in the country. The UN estimated that almost $400m was needed to help with rebuilding and recovery after the back-to-back catastrophes. But the IMF granted a $118m interest-free loan for rebuilding. The notion that debt can cover the cost of climate damages in the Global South reveals just how shortsighted neoliberal models of “aid” are. 

Only a radical programme of debt forgiveness can ensure that vulnerable nations are able to build the robust social safety nets needed to withstand both the coronavirus and the climate crisis. Last month, over 200 religious and secular organisations signed a call for the cancellation of all external debt payments due by Global South nations this year. The campaign also demanded that emergency additional finance, which does not create debt, is provided to nations in need.

The suspension of debt payments, with no interest, would allow governments working to combat Covid-19 to immediately access funds to support businesses and public health. But the question of how to pay for the disasters yet to come urgently needs to be answered. Campaigners have suggested levying a climate damages tax on each tonne of coal, oil and gas extracted by the fossil fuel industry. This would raise the funds needed to help the Global South adapt to climate change and transition their own economies away from fossil fuels. Others have suggested ending fossil fuel subsidies (which still exceed $5tn a year) and diverting these funds towards building green and resilient infrastructure. 

It is not necessary to further immiserate the Global South to pay for a global pandemic – a crisis that, while unprecedented in its effects, was far from unforeseeable. Nor is it ethical or logical to force further debts onto the countries least responsible for the climate crisis. All the capital needed to fund a transformative shift toward a more equitable global economy already exists across markets today. But accessing it will require challenging powerful vested interests.