The sovereign climate debt trap and natural disaster clauses
Year: 2024
Type: article
Abstract: The growing prevalence and magnitude of climate‐related natural disasters are perpetuating a climate debt trap in which recovery costs compound over time, progressively eroding the capacity of governments to obtain financing to respond to them. How can countries participating in global financial markets respond? This article focuses on natural disaster clauses in sovereign debt contracts, which enable a national government to temporarily suspend payments to its creditors when a natural disaster strikes the country. Natural disaster clauses are analyzed and critiqued as an example of contract innovation amidst ongoing debates about legal reform of the global financial system in response to climate change.
Source: American Business Law Journal
DOI: 10.1111/ablj.12253
Authors: Stephen Kim Park, Tim R Samples
Institutions: University of Connecticut, University of Georgia
Language: English
Subfield: Finance
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W4404493120