FacebookTwitterGoogle+RedditEmail

The Climate Loan Scam

by NICK DEARDEN

UK loans to low income countries will make the poor pay twice for climate change.

On Thursday, International Development Secretary Andrew Mitchell promised to stump up funds to ensure developing countries are better heard in climate negotiations. But it is difficult to see how those countries could be any clearer than they were last year at the disastrous Copenhagen climate summit – the problem is that the British government isn’t listening.

At the end of next week, delegates from across the world will start arriving in Cancun for the follow-up to Copenhagen. They do so in the shadow of the World Bank’s announcement of $270 million for three countries – Bangladesh, Niger and Tajikistan – to help them cope with the effects of climate change, for instance by protecting coastlines and planting crops more resilient to flooding.

These funds will be enhanced by others and ultimately the money comes from developed country governments like that of the UK. The problem is that much of the money will come not in the form of grants but low-interest loans. The total package given to Bangladesh, for instance, is $624 million, of which 92% comes in the form of loans. Over $150 million of these loans have come from the UK Government.

Why is this a problem? Because it contradicts the main principle which developing countries are fighting for in climate negotiations – that rich countries must not only reduce their emissions substantially but they must pay for poorer countries to clean up the devastation caused by climate change, not to mention helping those countries to develop in a more sustainable manner now they are denied the ‘cheap development’ which has fuelled wealth in the West.

Instead, offering loans attempts to make developing countries pay twice – first because they are suffering the worst consequences of climate change, but second because they now have to pick up the tab for that chaos when they repay their loans. That’s why developing countries and campaign groups are united that these loans are completely unacceptable.

The developing countries involved in this first tranche of funding cannot be regarded as anything other than very poor. All are defined as low income. Bangladesh already has a high debt – $23.6 billion and rising, despite the country paying over $1billion a year servicing that debt.

Niger owes much less – but only because it received over $1 billion of debt relief in 2004 after struggling with unjust debts for over a decade. Meanwhile Tajikistan – which was offered a loan but we believe has declined it – is already at high risk of a debt crisis according to the International Monetary Fund.

Forcing these countries to pay for their own clean-up is rather like breaking into your neighbour’s house, causing devastation, and lending them money to get the cleaners in.

UK funds are all channelled through the World Bank, rather than a special United Nations fund which has been created through international agreement. This too is contentious. The UN Fund has a unique bottom-up approach to finance – any country can apply to it, and that country retains a good deal of control over how the project is implemented.

The World Bank, on the other hand, is top-down – selecting which countries should receive climate financing – and hypocritically remains one of the world’s largest supporters of fossil fuel projects. In fact the UK has made the World Bank’s funding even worse than it otherwise would have been; the Bank says that the only reason it is giving loans is because the UK has provided its money as capital rather than a grant.

None of this sits well with the pre-election commitments of the governing parties. Liberal Democrat party policy is to “support the UN Adaptation Fund” and to provide “grants for communities vulnerable to the impact of climate change without increasing the burden on indebted countries”. Conservative party policy is to “continue, as far as possible, to give aid as grants not loans” and to “encourage other donors” to do the same.

Perhaps it’s little wonder that expectations are being vigorously managed ahead of Cancun. But let’s not pretend it’s because developing countries can’t be heard. Any progress towards a just climate solution depends on rich countries starting to listen pretty quickly.

NICK DEARDEN is director of the Jubilee Debt Campaign.

 

Nick Dearden is director of the Global Justice Now and former director of the Jubilee Debt Campaign.

More articles by:
June 29, 2016
Diana Johnstone
European Unification Divides Europeans: How Forcing People Together Tears Them Apart
Andrew Smolski
To My Less-Evilism Haters: A Rejoinder to Halle and Chomsky
Jeffrey St. Clair
Noam Chomsky, John Halle and a Confederacy of Lampreys: a Note on Lesser Evil Voting
David Rosen
Birth-Control Wars: Two Centuries of Struggle
Sheldon Richman
Brexit: What Kind of Dependence Now?
Yves Engler
“Canadian” Corporate Capitalism
Lawrence Davidson
Return to the Gilded Age: Paul Ryan’s Deregulated Dystopia
Priti Gulati Cox
All That Glitters is Feardom: Whatever Happens, Don’t Blame Jill Stein
Franklin Lamb
About the Accusation that Syrian and Russian Troops are Looting Palmyra
Binoy Kampmark
Texas, Abortion and the US Supreme Court
Anhvinh Doanvo
Justice Thomas’s Abortion Dissent Tolerates Discrimination
Victor Grossman
Brexit Pro and Con: the View From Germany
Manuel E. Yepe
Brazil: the Southern Giant Will Have to Fight
Rivera Sun
The Nonviolent History of American Independence
Adjoa Agyeiwaa
Is Western Aid Destroying Nigeria’s Future?
Jesse Jackson
What Clinton Should Learn From Brexit
Mel Gurtov
Is Brexit the End of the World?
June 28, 2016
Jonathan Cook
The Neoliberal Prison: Brexit Hysteria and the Liberal Mind
Paul Street
Bernie, Bakken, and Electoral Delusion: Letting Rich Guys Ruin Iowa and the World
Anthony DiMaggio
Fatally Flawed: the Bi-Partisan Travesty of American Health Care Reform
Mike King
The “Free State of Jones” in Trump’s America: Freedom Beyond White Imagination
Antonis Vradis
Stop Shedding Tears for the EU Monster: Brexit, the View From the Peloponnese
Omar Kassem
The End of the Atlantic Project: Slamming the Brakes on the Neoliberal Order
Binoy Kampmark
Brexit and the Neoliberal Revolt Against Jeremy Corbyn
Doug Johnson Hatlem
Alabama Democratic Primary Proves New York Times’ Nate Cohn Wrong about Exit Polling
Ruth Hopkins
Save Bear Butte: Mecca of the Lakota
Celestino Gusmao
Time to End Impunity for Suharto’’s Crimes in Indonesia and Timor-Leste
Thomas Knapp
SCOTUS: Amply Serving Law Enforcement’s Interests versus Society’s
Manuel E. Yepe
Capitalism is the Opposite of Democracy
Winslow Myers
Up Against the Wall
Chris Ernesto
Bernie’s “Political Revolution” = Vote for Clinton and the Neocons
Stephanie Van Hook
The Time for Silence is Over
Ajamu Nangwaya
Toronto’s Bathhouse Raids: Racialized, Queer Solidarity and Police Violence
June 27, 2016
Robin Hahnel
Brexit: Establishment Freak Out
James Bradley
Omar’s Motive
Gregory Wilpert – Michael Hudson
How Western Military Interventions Shaped the Brexit Vote
Leonard Peltier
41 Years Since Jumping Bull (But 500 Years of Trauma)
Rev. William Alberts
Orlando: the Latest Victim of Radicalizing American Imperialism
Patrick Cockburn
Brexiteers Have Much in Common With Arab Spring Protesters
Franklin Lamb
How 100 Syrians, 200 Russians and 11 Dogs Out-Witted ISIS and Saved Palmyra
John Grant
Omar Mateen: The Answers are All Around Us
Dean Baker
In the Wake of Brexit Will the EU Finally Turn Away From Austerity?
Ralph Nader
The IRS and the Self-Minimization of Congressman Jason Chaffetz
Johan Galtung
Goodbye UK, Goodbye Great Britain: What Next?
Martha Pskowski
Detained in Dilley: Deportation and Asylum in Texas
FacebookTwitterGoogle+RedditEmail