Finally, the paper examined the lack of progress on adapting DSFs to the key types of spending which will confront the extreme inequality and poverty crisis. Currently the only mention of these types of spending is in an SRDSF module examining negative risks of ageing populations for higher health and social protection spending. However, the paper finds that it would be very easy to replicate what has been done in regard to integrating climate spending, for key anti-inequality spending. In particular, it finds that it would be easy to define the types of spending to include in an additional module or sub-modules, using an extended standard baseline scenario, and to define the country groups in which this should be done. It also finds that accepted estimated costs exist for the key sectors to be included, with which a template could be“pre-populated”. It would also be easy where necessary(i.e. where costs are very high) to include customised country-specific scenarios analysing costs and potential sustainable financing sources in more detail(for which clear and simple methodologies exist); and it would be feasible- and essential – to include the major positive impacts on growth which reducing inequality would have. Given that studies suggest a global pandemic is likely once every decade, it also suggests that a pandemic“stress test” should be included in both SRDSF and LIC-DSF. Table 1: Summary of current situation and reform proposals Type of Adaptation Current Situation Reform Proposals Climate/ Environment SRDSF: Adaptation and • Replicate SRDSF Climate Module in LIC-DSF Mitigation Costs in“Extended Review Baseline” • Include Nature Collapse Risk and Prevention Spend SRDSF and LIC-DSF: Natural • Combine all Climate Impacts Disaster Shock in“Stress • Include Positive Impact of Spending on Tests” Growth • Customised Scenario with Country Costs and Sustainable Financing • Give More Weight to Climate Module Results in Overall Risk Inequality/ Poverty No Current Adaptation Both SRDSF and LIC-DSF: • Anti-Inequality/ Poverty Module –“Extended Baseline” • Trigger High Net Gini(e.g. 0.4) • Include Positive Impacts of Spending on Growth • Customised Scenario with Country Costs and Sustainable Finance • Pandemic Shock Stress Test • Preferably Combine All Inequality/ Pandemic Impacts However, it is also vital not to forget two broader suggestions which are made in the paper: • There is no reason why the twin crises of climate and inequality should be considered separately. Ideally, climate and inequality would be considered and tackled together in all relevant countries so as to promote a“just green transition” across all countries and maximise the positive multiplier effects of the combined spending. This would mean that DSF modules on climate and inequality would be used simultaneously and their combined effects on sustainability, financing needs and growth shown. 17 17 Some interviewees suggested that to ensure that this happens naturally, the RSF and the PRGF could be merged: however, the different beneficiary countries, funding sources and purposes of the facilities might prevent this. Series: Debt Sustainability Assessments& Their Role in the International Financial Architecture 14