Countries most at risk for climate change also face steeper borrowing costs, a new Imperial College Business School and SOAS University of London study determined.
Climate change exposure risks have already spurred vulnerable countries—such as Ghana, Tanzania, Kenya, Bangladesh and Vietnam—to pay over $40 billion in interest payments on official debts, the Financial Times reported. They’re projected to pay $168 billion more in the next 10 years, as investors factor climate change exposure into their decisions.
It’s a “cruel irony” that countries most in need of climate change protection face the highest costs for their debt, said Imperial College Business School’s Charles Donovan.
Investing in climate resilience could help, the researchers said in an Imperial College press release, highlighting coastal protection projects such as planting trees and building dikes.