Abstract

This study examined the influence of climate change vulnerability on the external debt vulnerability of Sub-Saharan Africa, with a focus on the Vulnerable Twenties (V20s), utilizing panel data spanning from 2015 to 2020. The climate readiness, climate vulnerability, and external debt vulnerability indices were derived via principal component analysis (PCA). The results from the system GMM analysis indicate that climate readiness exhibits a negative and significant impact across short- and long-term periods for the overall sample. However, for the V20s, the negative effect of climate readiness shifts to a positive and significant one over both short and long terms, with the long-term effect being more notable. These findings highlight a vicious cycle between debt and climate crises within the V20s. Thus, prioritizing debt relief over climate finance loans, decarbonizing greenhouse gas emissions, redirecting funds for climate goals, improving debt practices, and investing in public services would break nations’ vicious cycle of debt and climate vulnerability.

Talk to us

Join us for a 30 min session where you can share your feedback and ask us any queries you have

Schedule a call

Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.