The Group of Twenty

The Group of Twenty (G20) is an international forum that brings together the largest and fastest-growing economies. Members of the G20 account for approximately 85% of global GDP, 75% of all trade, and 60% of the world’s population. It is a forum for leaders to discuss global economic challenges, but topics have also included wider issues such as development, energy, and technology. The G20 does not create binding international law, but rather enables major economies to coordinate policy priorities, exchange perspectives, and commit to collaborative economic goals. 

Sovereign debt, or public debt, refers to money borrowed by a national government to finance public spending and development objectives. When debt payments become too large or difficult to manage, this debt burden can mean governments have fewer resources available for services, investment, and economic recovery after disasters (https://www.imf.org/en/topics/sovereign-debt). Global sovereign debt has never been higher. The IMF has reported that this debt is nearly 93% of global gross domestic product (GDP): a staggering $99.2 trillion USD. In 2023, developing countries paid a record $1.4 trillion USD to service external debt, which included $406 billion USD for interest payments. 

Government borrowing can support infrastructure, education, healthcare, disaster recovery, and economic development: all of which are critical for a nation’s growth. However, high debt-service costs can reduce the ability of a government to pay for these priorities, and increase the vulnerability of that economy to natural disasters or economic shocks. 

Debt challenges can become an international problem because a government may owe money to several different groups, which could involve other governments, but also commercial banks, multilateral development banks like the World Bank, or private bondholders. When a country is unable to meet repayment obligations, debt restructuring may need to take place in order to renegotiate repayment terms. Restructuring debt involves renegotiating the terms of the loans so they are possible to pay off, which can involve solutions including renegotiating loan terms, reducing interest rates, or extending payment deadlines.

Reforming the global sovereign-debt system does not mean eliminating government borrowing, nor requiring debt cancellation in every case. Instead, the World Bank has recommended more complete reporting of loan terms and debt obligations, because when debt becomes hidden, it can increase borrowing costs and make restructuring more difficult as creditor countries become wary of losses. While creditor countries may want to provide debt relief, going too fast may shift the burden onto their taxpayers. As G20 member countries approach this topic, they must consider how debt restructuring can be made more predictable, and development financing can be made more accessible for countries facing different economic circumstances. 

1. When debt is restructured, who should bear the greatest cost? The borrowing government, creditor governments, multilateral institutions like the World Bank, or private investors? 

2. Should countries affected by natural disasters, public-health emergencies, or severe climate shocks receive a pause on debt-service payments? Who would absorb the resulting financial cost? 

3. Can increasing debt relief improve long-term development, or might it increase future borrowing costs and reduce investor confidence?

   1. How much debt relief should be allowed? 

4. A debt swap is when a creditor agrees to reduce or restructure part of a country’s debt, and the country agrees to spend some of the saved money on a specific goal, such as healthcare or education. Should debt swaps be encouraged, or do they give creditor countries too much control over debtor countries? 

1. International Monetary Fund: Global Public Debt

2. Why public debt needs reform

3. What are debt swaps?

4. How much are developing countries spending on debt?

Climate finance refers to funding from public, private, and alternative sources that support efforts to reduce greenhouse gas emissions or adapt to the effects of climate change. The global energy transition requires investment not only in renewable energy but also in electricity grids, battery storage, energy efficiency, and other technologies with lower emissions. In 2025, global energy investment was projected to reach $3.3 trillion USD, which included $2.2 trillion USD for clean-energy technologies such as renewables, nuclear power, grids, storage, low-emissions fuels, efficiency, and electrification. 

Although investment in clean energy is increasing on a global scale, access to finance remains uneven. The International Energy Agency reports that emerging markets and developing economies (besides China) receive approximately 27% of global energy investment and 18% of clean energy investment, despite accounting for much of future energy and electricity demand. However, currency risks and restrictions on direct investment can make it difficult for foreign investors to safely invest in clean energy in developing economies. 

According to the OECD, developed countries provided a total of $132.8 billion USD in climate finance for developing countries, and 67% was in loans. This raises important questions about whether climate finance should create new debt, to what extent developing countries should be able to control the interests of developing countries, and how funding should be divided between emissions reduction and climate adaptation. 

The G20 can encourage cooperation among major economies, development institutions, and private investors on these financial challenges. However, Member States differ in their energy resources, fiscal capacity, and prioritization of emissions reduction vs. climate adaptation. Therefore, delegates will have to consider how climate finance can be made more accessible, predictable, and feasible while still respecting national priorities.

1. Which countries should contribute the most to international climate finance: those with the most emissions, those with the greatest economic capacity, or a group of certain countries?

2. When climate finance is provided as a loan, does it support development, or does it risk increasing debt burdens for developing countries?

3. Should funding be available for lower-emission transition fuels, or should funding only focus on renewable and zero-emission energy sources? 

4. How can non-G20 countries, and especially the countries that will need the most adaptation to the danger of climate change, play a role in international climate-finance priorities?

1. Introduction to Climate Finance

2. Climate finance in plain language and why it is important

3. OECD explanation of climate finance investments and why they matter

4. What are adaptation and resilience?

5. What is mitigation?