Laurie van der Burg is global public finance campaign manager at Oil Change International. Mariana Paoli is global advocacy lead at Christian Aid. Rebecca Thissen is global advocacy lead at Climate Action Network International.
While climate disasters intensify across the Global South, another connected crisis is quietly unfolding – one with less media coverage, but just as deadly. Governments are drowning in debt, and the money they need for clean energy and resilience is flowing not into solar panels, but to creditors in the Global North.
Meanwhile, the US is on a mission to make this debt and climate spiral even worse: it is pressuring the World Bank and other global institutions to abandon climate action and to instead use their public funds to underwrite the private profits of American and multinational corporations, including through investments in fossil fuels.
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At meetings this week in New York to prepare for the United Nations’ 4th Financing for Development conference (FfD4) that will take place in Seville in June, countries face a clear choice: reject these attempts – including US efforts to weaken its outcomes – or lay the foundation for a renewed financing framework in Seville – one that will ensure the world’s poorest countries get the resources they need to survive.
A system built to extract
Many Global South countries now spend five times more on debt repayments than on climate action. Some cannot rebuild after floods or droughts because they’re paying interest on loans from decades ago. Others remain dependent on expensive fossil fuel imports – or stuck exporting oil and gas just to stay afloat.
This isn’t misfortune – it’s design. The global financial system was built by – and continues to benefit – the rich countries that did the most to cause the climate crisis. Today, they are demanding loan repayments from those who contributed the least, while offering “climate finance” largely in the form of new debt.
Ghana, for example, received over $2 billion in World Bank financing for oil and gas projects, yet project delays have left it reliant on expensive fossil fuel imports. On top of that, “take or pay” contracts that guarantee profits for foreign investors but not public coffers are costing the country over $1 billion a year, while many Ghanaians still lack access to affordable energy.
This is not an isolated case. Many countries are trapped in a vicious cycle of relying on fossil fuel extraction to service their debts, fueled by conditions imposed by international financial institutions like the International Monetary Fund (IMF). A study from the ODI think-tank found that debt levels rose sharply in the last decade in major oil and gas exporting countries across the Global
South.
Global South countries have the solutions
Global South groups – such as the African Group and the Alliance of Small Island States (AOSIS) – have put forward clear, workable solutions. They have successfully pushed for establishing a UN Tax Convention to close tax loopholes and stop the outflow of wealth through tax havens, negotiations for which are ongoing. They have also repeatedly called for dramatically increased public, grant-based climate finance.
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With 2025 declared a Jubilee year for debt forgiveness by the late Pope Francis, the calls for debt cancellation and to adopt a UN Sovereign Debt Convention have become impossible to ignore. The current draft text for FfD4 calls for a process to establish such a Convention, which would provide an alternative to the insufficient attempts to tackle the debt crisis by the G20 and the IMF, and finally put debtor and creditor countries at equal footing.
The Convention could set up a multilateral sovereign debt resolution mechanism to deliver faster and fairer debt restructurings and cancellation. It could develop a new approach to debt sustainability framework and analyses (DSAs), ensuring that the assessment is aligned with human rights, climate and sustainable development needs.
But the Global North is blocking reform
Instead of stepping up and supporting financial system reform, wealthy governments – including the UK, France, and Germany – are cutting aid and outsourcing their responsibilities to the private sector. They are obstructing bold action in UN spaces and instead push to keep decision-making behind closed doors in elite clubs like the OECD, where poorer countries have no seat at the table. Their approach of prioritising the mobilisation of private money and offering loans rather than grants or highly-concessional public money has been tested and failed. Even the World Bank chief economist Indermit Gill admitted that the “Billions to Trillions” agenda never delivered.
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Rather than supporting harmful approaches and piecemeal reforms, the EU and UK should strengthen their alliances with Global South countries and back their proposals for system change and more democratic governance of financial institutions.
This would help free up the public money needed to fund the solutions. Money is out there, it is just a matter of political will. Just the world’s 10 richest individuals hold more than $1 trillion in combined wealth. Fossil fuel companies made $1 trillion in profits last year. Governments still give hundreds of billions annually in fossil fuel subsidies, paid for by the public.
Taxing the ultra-wealthy, making polluters pay, ending fossil fuel handouts, and cancelling exploitative debts, could free up more than $5 trillion a year – enough to fund a global Just Transition and build a
more equal, stable world.
Seville is a moment of reckoning
The Seville conference is a rare opportunity to prove that international cooperation can still deliver in an age of crisis. For too long, climate finance, debt relief, tax justice, and fossil fuel phaseout have been treated in isolation. But these crises are deeply connected – and demand a unified response.
Seville must be the moment when governments back Global South–led solutions that can start shifting the global economy toward justice, resilience, and sustainability. At the heart of that effort must be securing a UN Sovereign Debt Convention – to finally rebalance a system rigged against the world’s poorest.
Wealthy countries must rise to the occasion – not with more financial engineering, but by strengthening the public tools that serve the common good. Anything less isn’t climate action. It’s exploitation with a green label.
