In this edition of BRAC University C3ER Presents: Youth-Experts Dialogue on Climate Actions, M. Zakir Hossain Khan, Chief Executive, Change Initiative, sits down with journalist Borhanul Ashekin Prince. They discuss whether climate finance should grant or loan. They talked about how the LDCs are falling into debt traps in the name of climate finance. Vulnerable countries like Bangladesh risk falling into a climate debt trap due to heavy reliance on loan-based climate financing. This reliance intensifies fiscal pressures, diverting resources away from critical development initiatives and increasing debt-to-GDP ratios. In Least Developed Countries (LDCs), each person bears an annual climate debt of $0.85.
These climate loans are pushing developing countries further into debt. Currently, 3.3 billion people live in countries that spend more on interest payments than on education or healthcare. Without reforming the climate finance framework, LDCs will face increasing vulnerability to climate-induced debt, compromising their ability to build resilience and invest in essential services.
