Developing countries face debt payments of up to $168 billion over the next ten years as a result of their vulnerability to man-made climate change.
A new study from Imperial College Business School found that climate risks are increasing the cost of capital for developing countries. The researchers found that for every ten dollars these countries pay in interest payments, an additional dollar is due to climate vulnerability.
The study shows that over the past decade, a sample of developing countries has endured $40 billion in additional interest payments on government debt alone. The researchers estimate that these additional interest costs are set to rise to between $146bn and $168bn over the next decade, and could exacerbate the economic challenges already faced by poor countries around the world.
However, the researchers also found that investments in climate resilience can help improve fiscal health at the national level.
Read more: Developing countries face rising payments due to climate change, says report
