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Climate Change Threatens Global Debt Sustainability, Study Warns

5/20/2025

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Summary

Story summary

A new study uncovers alarming risks posed by climate change to global sovereign debt sustainability, with potential costs soaring to 3% of GDP in severe scenarios. While investing in adaptation can mitigate some effects, it may not fully safeguard financial stability. Balancing public spending and debt sustainability becomes increasingly daunting amid these climate challenges.

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Story summary

A new study uncovers alarming risks posed by climate change to global sovereign debt sustainability, with potential costs soaring to 3% of GDP in severe scenarios. While investing in adaptation can mitigate some effects, it may not fully safeguard financial stability. Balancing public spending and debt sustainability becomes increasingly daunting amid these climate challenges.