FacebookTwitterGoogle+RedditEmail

The Climate Loan Scam

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.

 

More articles by:

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

Weekend Edition
September 21, 2018
Friday - Sunday
Alexandra Isfahani-Hammond
Hurricane Florence and 9.7 Million Pigs
Andrew Levine
Israel’s Anti-Semitism Smear Campaign
Paul Street
Laquan McDonald is Being Tried for His Own Racist Murder
Brad Evans
What Does It Mean to Celebrate International Peace Day?
Nick Pemberton
With or Without Kavanaugh, The United States Is Anti-Choice
Jim Kavanagh
“Taxpayer Money” Threatens Medicare-for-All (And Every Other Social Program)
Jonathan Cook
Palestine: The Testbed for Trump’s Plan to Tear up the Rules-Based International Order
Jeffrey St. Clair
Roaming Charges: the Chickenhawks Have Finally Come Back Home to Roost!
David Rosen
As the Capitalist World Turns: From Empire to Imperialism to Globalization?
Jonah Raskin
Green Capitalism Rears Its Head at Global Climate Action Summit
James Munson
On Climate, the Centrists are the Deplorables
Robert Hunziker
Is Paris 2015 Already Underwater?
Arshad Khan
Will Their Ever be Justice for Rohingya Muslims?
Jill Richardson
Why Women Don’t Report Sexual Assault
Dave Clennon
A Victory for Historical Accuracy and the Peace Movement: Not One Emmy for Ken Burns and “The Vietnam War”
W. T. Whitney
US Harasses Cuba Amid Mysterious Circumstances
Nathan Kalman-Lamb
Things That Make Sports Fans Uncomfortable
George Capaccio
Iran: “Snapping Back” Sanctions and the Threat of War
Kenneth Surin
Brexit is Coming, But Which Will It Be?
Louis Proyect
Moore’s “Fahrenheit 11/9”: Entertaining Film, Crappy Politics
Ramzy Baroud
Why Israel Demolishes: Khan Al-Ahmar as Representation of Greater Genocide
Ben Dangl
The Zapatistas’ Dignified Rage: Revolutionary Theories and Anticapitalist Dreams of Subcommandante Marcos
Ron Jacobs
Faith, Madness, or Death
Bill Glahn
Crime Comes Knocking
Terry Heaton
Pat Robertson’s Hurricane “Miracle”
Dave Lindorff
In Montgomery County PA, It’s Often a Jury of White People
Louis Yako
From Citizens to Customers: the Corporate Customer Service Culture in America 
William Boardman
The Shame of Dianne Feinstein, the Courage of Christine Blasey Ford 
Ernie Niemi
Logging and Climate Change: Oregon is Appalachia and Timber is Our Coal
Jessicah Pierre
Nike Says “Believe in Something,” But Can It Sacrifice Something, Too?
Paul Fitzgerald - Elizabeth Gould
Weaponized Dreams? The Curious Case of Robert Moss
Olivia Alperstein
An Environmental 9/11: the EPA’s Gutting of Methane Regulations
Ted Rall
Why Christine Ford vs. Brett Kavanaugh is a Train Wreck You Can’t Look Away From
Lauren Regan
The Day the Valves Turned: Defending the Pipeline Protesters
Ralph Nader
Questions, Questions Where are the Answers?
Binoy Kampmark
Deplatforming Germaine Greer
Raouf Halaby
It Should Not Be A He Said She Said Verdict
Robert Koehler
The Accusation That Wouldn’t Go Away
Jim Hightower
Amazon is Making Workers Tweet About How Great It is to Work There
Robby Sherwin
Rabbi, Rabbi, Where For Art Thou Rabbi?
Vern Loomis
Has Something Evil This Way Come?
Steve Baggarly
Disarm Trident Walk Ends in Georgia
Graham Peebles
Priorities of the Time: Peace
Michael Doliner
The Department of Demonization
David Yearsley
Bollocks to Brexit: the Plumber Sings
FacebookTwitterGoogle+RedditEmail