Can Debt-for-Climate Swaps remain viable without US support?

Debt-for-climate swaps are a financial restructuring instrument that unlocks climate funding by restructuring sovereign debt. They have been around since the 1980s but have only achieved the scale necessary to be impactful instruments in the climate funding ecosystem over the last fifteen years. Recent developments in US and international politics have undermined the viability of these transactions. This thesis will seek to clarify the current obstacles debt-for-climate swaps face by evaluating how different parties and institutions contribute to or challenge their success. I will first examine the role of Sovereign Ratings Agencies and their assessment of swap-related credit risk. I will then analyze the relationship between US policy and institutions, and the prevailing transaction structures of debt-for-climate swaps. Finally, having identified the key obstacles, I will offer policy recommendations for the various parties and institutions that contribute to or benefit from debt-for-climate swaps, with a view towards resurrecting the instrument during a time of increased uncertainty in the sphere of international climate finance and collaboration.