(NDC) reports to the United Nations Framework Convention on Climate Change(UNFCCC); or alternative cost proxies based on other countries with similar rankings in the IMF INFORM risk index(see IMF 2024a). This can also include the impact of spending to promote resilience on growth(and on protection and recovery from natural disasters) using the IMF’s Debt-Investment-Growth and Natural Disasters(DIGNAD) model, as has been done for Bangladesh and Rwanda in Resilience and Sustainability Trust(RST) Board papers. 9 However, the cost levels presented by the IMF in its Staff Guidance Note are much higher than the standardised scenario, ranging up to 3.8 per cent of GDP for adaptation(50 per cent higher than in the standard scenario) and 14 per cent for mitigation(four times as high as standard), thereby raising the question as to whether the standard scenario is really useful as an indicator of potential costs and risks of climate change for debt sustainability. 3.1.2 Much More Limited Adaptation: the LIC-DSF In contrast to the major reforms made in the integration of climate into the SRDSF, there has been only very limited progress with the LIC-DSF. Adaptations have been much more limited in scope as follows: • The impact of climate change is limited to physical risk, such as climate-induced natural disasters, and omits the impact of adaptation, mitigation and resilience spending of the types included in the SRDSF. • Climate is relegated to a“stress test”, rather than being treated as an extension or modification of the baseline scenario. • It is used only for small states vulnerable to natural disasters as defined by the IMF(20 countries) 10 , as well as other LICs that have met a frequency criterion(two disasters every three years) and economic loss criterion(above 5 per cent of GDP per year), based on the EM-DAT database during 1950–2015. The use of such historical data on frequency and severity should also be examined, as all more recent data and forecasts indicate growing frequency and severity, so the analysis might better be conducted for all countries where natural disasters are forecast to be frequent and severe. • In spite of the fact that country eligibility requires countries to be hit regularly by shocks, the stress test natural disaster shock occurs only in year two of the projection and is not repeated over the longer term. • For this paper, the author has checked the remaining LIC-DSFs for small states 11 for any inclusion of a climate stress test and found none – which stands in marked contrast with repeated and extensive analysis of climate adaptation and resilience spending plans(for example for Cape Verde and Timor Leste) and warnings even in the texts of the DSAs of major unquantified downside climate risks to debt sustainability. The lack of analysis of climate impact in the DSA therefore stands out like a sore thumb. 3.2 The Way Forward: Integrating SDGs 13-15 into DSAs Currently, there are seven main criticisms of the way in which climate has so far been integrated into DSAs: Country Coverage: The number of countries covered by the analysis is potentially far too low. In terms of the adaptation submodule, it is only the 25 per cent of countries which are considered most at risk(plus any applicants for the RSF) which have to be analyzed, whereas costs for adaptation are likely to be substantial for at least the top 50 per cent of countries(for example, 68 countries are members of the V20 group and around 80 are considered“climate vulnerable”). In terms of the mitigation submodule, the threshold set for using the module- countries which set a target of net zero by 2050- is no longer ambitious as it has been adopted by 93 9 As well as IMF working papers for the Maldives, St Lucia and Vanuatu; Selected Issues papers for Solomon Islands, Timor-Leste and Uganda; and Climate Macroeconomic Assessment Program pilots for Madagascar and Samoa. For more details see IMF 2024b. 10 Based on the countries defined as extreme or high vulnerability in Annex 1 of IMF(2016) 11 For Bhutan, Cape Verde, Guyana, the Marshall Islands and Timor Leste. Djibouti’s DSA is unpublished but is understood based on interviews also not to include any climate stress test. Series: Debt Sustainability Assessments& Their Role in the International Financial Architecture 7