Commonwealth Secretariat Discussion Paper

The Discussion Paper series raises awareness of topics that are of importance to Commonwealth work programmes. Discussion Papers explore an issue relating to research or programme activities and provoke debate on it. The intended readership is researchers and policy advisers.


Commonwealth Multilateral Debt Swap for Climate Change Adaptation and Mitigation Proposal

An Exposition of the Operational Features

This paper discusses the technical details of the Commonwealth proposal for a Multilateral Debt Swap for Climate Action, something that could see small states benefit from improved debt management, climate resilience and possibly debt relief. It is geared towards senior technical personnel, both in Commonwealth member governments as well as in IFIs. It provides the definitions (section 2); main assumptions/elements underpinning the Commonwealth’s thinking (section 3); the detailed mechanics of the proposal using a funds-flow diagram and three scenarios (section 4); benefits of the proposal to prospective climate finance providers (section 5); and some key issues (section 6).


Keywords: climate finance, Commonwealth, Multilateral debt swap arrangement
JEL: Q54: Agricultural and Natural Resource Economics; Environmental and Ecological Economics / Environmental Economics / Climate; Natural Disasters and Their Management; Global Warming; H63: Public Economics / National Budget, Deficit, and Debt / National Debt; Debt Management; Sovereign Debt; F34: International Economics / International Finance / International Lending and Debt Problems
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