2024 Public Sector Perspectives

Ana Holzbacher Trius Public Sector Group, Corporate Banking Andrew Park Public Sector Group, Corporate Banking Peter Sullivan Head of Africa Public Sector Group, Corporate Banking The long-awaited Loss and Damage Fund $313 bn 1 . While this amount would approximately correspond to Chile’s GDP 2 for 2022, it also represents the economic loss caused by natural disasters worldwide for the same period. Sadly, 2023 is similarly on track to be yet another one of the costliest years for our planet. The droughts in East Africa, the record-breaking wildfires in Canada and the devastating floods in Libya are only some of the tragic events which 2023will be remembered for. The acceleration of natural disasters in recent years is a declaration of the direct repercussions climate change is having on our planet. While these phenomena have already increased in number and magnitude compared to a few decades ago, climate change will only continue acting as a risk multiplier, amplifying the intensity of extreme weather events, increasing their unpredictability, and exacerbating our vulnerability. While climate change is a global phenomenon its negative impact is more severely felt by low-income countries where a severe lack of investment towards climate adaptation, social development and infrastructure resilience has left them vulnerable. In such manner, Africa has historically contributed to only a minimal small share of global greenhouse gas emissions but is now jointly bearing the cost of Europe and North America who together contributed to more than 70% of the stock of anthropogenic climate change over the past 270 years 3 . The economic impact of such natural disasters on low-income countries, often the very same countries that struggle the most fiscally and financially, forces them to choose between eradicating poverty, combating climate change or honoring growing amounts of debt. To illustrate, the IMF 4 reported that out of the 59 nations most vulnerable to climate change, a staggering 34 are also classified as having a high fiscal risk, which is often also linked with debt sustainability concerns. 1 Aon 2 IMF 3 Financial Times 4 IMF Blog Building Resilience Against Future Loss and Damage Through Climate Adaptation Citi Perspectives for the Public Sector 13 12 Building Resilience Against Future Loss and Damage Through Climate Adaptation While climate change is a global phenomenon its negative impact is more severely felt by low-income countries where a severe lack of investment towards climate adaptation, social development and infrastructure resilience has left them vulnerable.