Climate change protesters outside Parliament in Cape Town.
Image: Brenton Geach
CLIMATE debt is based on an idea that wealthy nations have polluted more than their fair share of the atmosphere with greenhouse gases. This is known as atmospheric appropriation.
Because of this, these countries have a responsibility to compensate developing countries, which have contributed least to greenhouse gas emissions, and disproportionately suffer the effects of global warming. This is their climate debt.
Repaying the climate debt would enable African countries to pursue a just and sustainable transition to renewable energy, and to adapt their cities to heatwaves, floods, and other climate change related disasters. But currently, sub-Saharan Africa receives just 5% of global climate finance to pay for mitigation such as renewable energy projects and to adapt to the effects of global warming.
This shows that the climate debt remains largely unpaid.
As an urban economist, I am always fascinated that no country has ever reached middle-income status without going through a well-managed urbanisation process. Burning fossil fuels to do this, such as setting up factories powered by coal-fired electricity, has been the norm. But it has also caused the climate crisis we are experiencing today.
An activist holds a banner, as she demonstrates at the entrance of the Sharm El Sheikh International Convention Centre, during the COP27 climate summit opening, in Sharm el-Sheikh, Egypt, November 7, 2022.
Image: Mohamed Abd El Ghany/Reuters
The Action Aid report calculates that rich countries achieved up to 70% of their economic growth by using more than their fair share of the climate budget. According to the report, wealthier countries owe US$36 trillion to African countries in climate debt.
Africa is at the beginning of its urbanisation journey, the most rapid the world has ever seen. However, it cannot follow the same high-carbon industrialisation model that wealthier nations used. Africa needs to forge its own path, one that does not significantly increase greenhouse gas emissions. The urgency of the climate crisis requires this.
In 2015, the Paris Agreement was signed. Developed countries committed to providing US$100 billion annually to support developing nations in addressing climate change. During the COP29 negotiations in Baku, Azerbaijan in 2024, this was increased to US$300 billion per year.
But developed countries have yet to fully deliver on the initial US$100 billion commitment. Some researchers say the true climate debt is closer to US$192 trillion in total, or approximately US$4 trillion per year until 2050.
The Action Aid report also highlights that these calculations only account for debt that is directly related to climate change. There are compelling arguments for additional reparations that cover the historical injustices of the transatlantic slave trade, as well as the ongoing financial losses African nations face due to illicit financial flows, tax havens, and exploitative economic structures. Each of these areas carries its own debt calculations.
African cities need substantial investments in housing, transport, energy, education, health, water and sanitation. Investments made in cities today will shape their long-term growth for generations to come. Enough investment will enable cities to set up housing and services that are resilient to climate change. Under-investment will make cities less able to cope with population growth and global warming.
Cities have a central role in economic transformation and climate adaptation. But the global climate finance system is biased towards national and regional institutions, and direct funding for cities is very limited. Constrained city budgets mean delayed projects, making cities more vulnerable to climate risks.
Another problem is that more than two-thirds of the climate finance flowing to African nations is in the form of loans rather than grants. Africa is already in a debt crisis from borrowing money at high interest rates and unfavourable lending conditions. By 2023, African countries spent more money on repaying debt than flowed in.
In 2024, 34 African countries spent more on external debt payments than on health or education. Debt repayments consumed at least 18.5% of the continent’s budget revenues, the highest level in 25 years.
Climate loans are often profit-driven and therefore tend to finance investments which might make a profit. Only 10% of the climate finance that does reach Africa is allocated to adapting cities in a way that won’t make a profit – for example, new drainage systems to protect against floods or urban forests to cool cities down.
Most climate finance globally is money lent to countries and an estimated 60% of developing country debt is owed to private creditors. This means that funds meant to address the climate crisis may instead be contributing to a social crisis. If climate finance is meant to be reparation from wealthier countries, then it should not need to be paid back.
Major donors like the US and the UK have cut aid budgets. This means that climate grants (that don’t have to be repaid) may shrink to an all-time low, leaving African countries to rely on high interest loans.
It is urgent that African nations move beyond passive reliance on international goodwill and take a unified, strategic approach to securing what is owed to them. Climate debt repayment is a matter of fairness. It is in the long-term economic and environmental interests of the entire planet that it be repaid.
The G20 presidency currently held by South Africa (the first African nation to lead the group) provides a platform to spotlight climate debt and to push for better access to finance and for existing debt to be restructured. This is already on the agenda of the G20.
Securing more finance alone is not enough. African leaders must ensure that these funds are directed toward climate-resilient infrastructure, services like health and education, and long-term economic transformation.
This is particularly crucial for Africa’s cities, where most future growth will take place. Resolving climate debt and securing fair repayment are critical to determining whether cities become engines of resilient and sustainable prosperity or sites of deepening climate crisis.
This article was first published in The Conversation