Sovereign Debt and Climate Change in Argentina – The Catalytic Role of the IMF

Abstract

This article studies the interdependence between Argentina’s public over-indebtedness and climate change. It addresses the following questions: What type of productive model does the Argentine public debt profile promote, and what is its impact on climate change? In a debt-servicing scheme marked by fiscal consolidation, which strongly conditions the state budget, what public funds are available to invest in adaptation and mitigation? Finally, what is the role of the IMF in this fiscal-environmental scheme? The article first presents the international commitments of the Argentine State in the face of climate change and the estimated fiscal cost of implementing the necessary adaptation and mitigation measures. It then describes the situation of Argentina’s debt in historical perspective up to the present and explains how the external debt has been determining the productive specialization of the national economy, which seeks to boost the country’s primary export capacity, particularly agribusiness, the fossil fuel sector, and open-pit metalliferous mining. It also analyzes the role of the IMF in Argentina as a catalytic actor in the climate crisis, describing the IMF’s centrality in the national economy, its economic-environmental policy on the production pattern that accelerates climate change, and the incidence of this phenomenon in Argentina.