Amendment
Introduced on 12/16/25
The Global Climate Resilience Act of 2025 establishes an innovative debt restructuring mechanism designed to help developing countries vulnerable to climate change impacts build resilience against extreme weather events and slow-onset climate disasters. The legislation authorizes the President to reduce, cancel, or restructure sovereign debt owed by eligible developing nations in exchange for their commitment to implement climate resilience activities. This approach recognizes that many climate-vulnerable countries face dual challenges of unsustainable debt burdens and urgent needs for climate adaptation investments. By converting debt obligations into climate resilience programs, the bill aims to free up financial resources that would otherwise service debt payments and redirect them toward protective infrastructure, ecosystem restoration, disaster risk reduction, and community-based adaptation measures. The legislation emphasizes inclusive approaches that prioritize local communities, Indigenous peoples, and efforts to reduce gender, income, and social inequalities. It also directs U.S. representatives at international financial institutions to advocate for broader climate insurance programs that can provide additional protection for vulnerable nations.
The bill creates comprehensive authority under Section 901 for the President to engage in debt-for-resilience swaps with eligible countries. Eligible countries are defined as low-income or middle-income countries and small island developing states that meet specific governance criteria, including having democratically elected governments and no consistent patterns of gross human rights violations. The President is authorized to sell, reduce, or cancel concessional loans made under the Foreign Assistance Act of 1961, with proceeds from any sales deposited into U.S. government repayment accounts as specified in 31 U.S.C. Section 3302. For privately held debt, the legislation permits the President to purchase such obligations at up to 65 percent of face value for purposes of debt-for-resilience swaps. Before implementing any debt modification, the President must consult with the recipient country to ensure alignment with national priorities and development plans. The bill defines resilience activities broadly to include changes to processes, practices, and structures designed to moderate harm from climate-related hazards, encompassing both extreme weather events and slow-onset climate disasters such as sea-level rise, biodiversity loss, and desertification. Priority consideration is given to countries that develop resilience plans involving local communities and Indigenous peoples and that aim to reduce gender, income, and social inequalities.
Implementation responsibility rests primarily with the President, who exercises discretionary authority over debt reduction decisions subject to congressional notification requirements. The President must notify relevant congressional committees at least 15 days before making a determination regarding country eligibility for debt relief. The legislation establishes an annual reporting requirement, mandating that the President submit reports to Congress by April 15 of each year detailing all activities undertaken under the program, including descriptions of debt reduction agreements entered into and the resilience activities being supported. U.S. representatives to the World Bank and other international financial institutions are directed to advocate for the establishment or expansion of international climate insurance programs, building on models such as the Caribbean Catastrophe Risk Insurance Facility. The bill works through existing international financial institution frameworks, including the International Bank for Reconstruction and Development, International Development Association, International Finance Corporation, and Multilateral Investment Guarantee Agency. Debt reduction proceeds can be applied to program restoration, disaster cleanup, climate adaptation infrastructure, ecosystem restoration, nature-based solutions, and other recovery efforts. The consultation requirement ensures that recipient countries participate in designing resilience plans that align with their national development priorities and local conditions.
The primary beneficiaries of this legislation are developing countries facing acute vulnerability to climate change impacts, particularly small island developing states and low- and middle-income nations that lack financial resources to invest adequately in climate adaptation while servicing external debt. By restructuring or canceling debt obligations, the bill enables these countries to redirect financial resources toward resilience-building activities that protect populations, infrastructure, and ecosystems from climate-related disasters. The legislation specifically targets support for small producers and vulnerable economic sectors affected by natural disasters, with emphasis on reducing gender, income, and social inequalities through climate adaptation investments. Local communities and Indigenous peoples stand to benefit from the prioritization of inclusive planning processes that incorporate traditional knowledge and community-based adaptation strategies. The bill does not specify appropriations amounts, leaving cost implications dependent on the scale of debt reduction undertaken and the face value of loans affected. Administrative burden falls on the executive branch to assess country eligibility, negotiate debt restructuring agreements, monitor implementation of resilience activities, and prepare annual congressional reports. Expected outcomes include enhanced climate resilience infrastructure, reduced disaster-related losses, improved ecosystem health through nature-based solutions, and strengthened capacity of vulnerable nations to adapt to changing climate conditions. The legislation contains no sunset provisions, establishing an ongoing program authority.
The bill operates under the constitutional authority of Congress to regulate foreign commerce and appropriate federal funds, as well as the President's authority to conduct foreign relations. It amends and builds upon the Foreign Assistance Act of 1961, which provides the foundational statutory framework for U.S. foreign aid programs, and references the International Development and Food Assistance Act of 1975 as part of the existing legal architecture for development assistance. The legislation grants the President broad discretionary authority to determine country eligibility and negotiate debt restructuring terms, subject to statutory criteria regarding democratic governance and human rights compliance. This discretionary authority operates within the framework of existing appropriations law, particularly 31 U.S.C. Section 3302 governing the deposit of government receipts. The bill directs U.S. representatives at international financial institutions to advocate for specific policy positions, exercising congressional influence over executive branch participation in multilateral organizations. The legislation does not preempt state or local law, as it operates entirely within the federal foreign affairs power. No explicit judicial review provisions are included, though administrative actions under the statute would be subject to general principles of judicial review under the Administrative Procedure Act for challenges alleging violations of statutory requirements or constitutional constraints.
The legislation presents several implementation challenges and potential areas of controversy. The broad discretionary authority granted to the President in determining country eligibility and negotiating debt terms may raise separation of powers concerns, particularly regarding congressional oversight of foreign policy decisions with significant fiscal implications. The 15-day notification requirement provides limited opportunity for congressional input before eligibility determinations become effective. Verification of whether recipient countries are effectively implementing resilience activities and achieving stated objectives poses substantial monitoring challenges, particularly given the long-term nature of climate adaptation investments and the difficulty of attributing resilience outcomes to specific interventions. The criteria for country eligibility, particularly the requirements regarding democratic governance and human rights compliance, involve subjective assessments that may become politically contentious and could exclude countries with significant climate vulnerability but problematic governance records. The authorization to purchase privately held debt at up to 65 percent of face value raises questions about market distortions and potential windfall benefits to private creditors. Cost implications remain uncertain because the legislation does not specify appropriations limits or caps on the total value of debt that may be reduced or canceled, potentially creating open-ended fiscal exposure. Critics may argue that debt forgiveness creates moral hazard by reducing incentives for fiscal discipline and that resources would be more effectively deployed through direct climate adaptation grants rather than debt restructuring. The emphasis on inclusive planning processes involving local communities and Indigenous peoples, while laudable, may complicate implementation timelines and create tensions with national governments regarding decision-making authority. The lack of specific performance metrics or accountability mechanisms for resilience activities funded through debt reduction may limit program effectiveness and transparency.