As the United States, after inexcusably long delays, finally begins to make a real downpayment on fighting climate change with the passage of the Inflation Reduction Act, an important piece out from ProPublica shines a light on the struggles of our near-neighbors to cope with the catastrophic changes that are already underway. Describing Barbados’ attempts to simultaneously cope with climate-related damage while also struggling with onerous debts, it’s a timely reminder that our moral responsibilities to mitigate global warming don’t stop at the U.S. border, and that the IRA must be the start of a wave of further investment and justice-minded reforms.
Like many of its Caribbean neighbors, Barbados finds itself trapped in an increasingly untenable cycle, in which climate change-related storms and flooding cause massive economic damage, which requires these countries to take on even more debt for the sake of reconstruction, the repayment of which drains funds from measures that might mitigate damage from future storms. Author Abrahm Lustgarten writes:
The warming planet has turned this into a self-perpetuating cycle: Were it not for the disasters worsened by climate change, much of the region’s debt might not exist in the first place. Jamaica’s debt, for example, can be tied to the response to Hurricane Gilbert more than three decades ago. Grenada’s is in part because of Hurricane Ivan in 2004. Dominica’s 2017 loss, relative to its GDP, was the equivalent of a $44 trillion hit to the U.S. economy.
Truly hideous is the underlying reality that countries like Jamaica and Grenada are paying the human and financial cost for climate change they have had a negligible role in creating. As Lustgarten writes, “Caribbean nations are being asked, in a sense, to pay not only their own debts but the rest of the world’s debts, too, for all the progress it made while leaving the Caribbean behind.”
The piece is a great crash course on the world of sovereign debt and the role of finance capital in making money off the legacy of colonialism; what can be dry and abstract economic analysis takes on a far more urgent and accessible quality as Lustgarten relates it to the climate dangers facing Caribbean nations. In particular, the story of Barbados Prime Minister Mia Mottley’s efforts to renegotiate her country’s debts, so that they take account of the increasing number of natural disaster her nation is going to face, is both heroic and I think likely to be historical, a crucial battle in the fight to shake off the shackles of neo-colonialism and reform the self-destructive, profit-at-any-cost mentality of finance capital.
To its great credit, the lens of the reporting is wide enough to contemplate the long-term end game of this collision between the functioning of capital markets and the basic survival needs of dozens of Caribbean nations. In particular, it makes clear that there are profound and inescapable moral dimensions to what many corporations would prefer to think of as abstract business transactions between borrowers and lenders. There is much to chew on in Lustgarten’s assessment:
There is an argument to be made, though, that the loss of the money owed is a minimal price in the context of the profit that has been made, and that there is justice to this form of mercy. BlackRock, for example, is now among the largest holders of Barbados’ publicly traded debt, having purchased large blocks of it once Sequeda and the creditors settled. Consider what BlackRock, which is also the largest global financier of the oil-and-gas industry, has earned directly from the processes that have caused climate warming.
In a capitalist society, it is fair to ask why anyone should get anything free. But Barbados and the countries of the Caribbean are paying a tangible price now in lives and in dollars because of the emissions of wealthier nations. Perhaps the suggestion that lenders forgive debt isn’t about kindness but about obligation — about seeing it as a kind of back tax that they owe to society and to front-line societies, in particular.
It is difficult to come away from this report without a renewed appreciation for the inexorable moral logic of debt forgiveness for countries like Barbados, and of the necessity for radically reforming systems of power and capital that have led so many of the world’s countries to the brink of disaster, both in environmental and financial terms. Given the U.S.’s central role in supporting the current framework that leads to hopeless debt loads and underfunded climate mitigation in so many nations, we clearly need a far more public and vigorous discussion here of whether this country’s higher priority is to protect the profits of finance capital or the lives of our fellow human beings.