FacebookTwitterRedditEmail

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
August 14, 2020
Friday - Sunday
Matthew Hoh
Lights! Camera! Kill! Hollywood, the Pentagon and Imperial Ambitions.
Joseph Grosso
Bloody Chicken: Inside the American Poultry Industry During the Time of COVID
Jeffrey St. Clair
Roaming Charges: It Had to be You
H. Bruce Franklin
August 12-22, 1945: Washington Starts the Korean and Vietnam Wars
Pete Dolack
Business as Usual Equals Many Extra Deaths from Global Warming
Paul Street
Whispers in the Asylum (Seven Days in August)
Richard Falk – Daniel Falcone
Predatory Capitalism and the Nuclear Threat in the Age of Trump
Paul Fitzgerald - Elizabeth Gould
‘Magical Thinking’ has Always Guided the US Role in Afghanistan
Ramzy Baroud
The Politics of War: What is Israel’s Endgame in Lebanon and Syria?
Ron Jacobs
It’s a Sick Country
Eve Ottenberg
Trump’s Plan: Gut Social Security, Bankrupt the States
Richard C. Gross
Trump’s Fake News
Jonathan Cook
How the Guardian Betrayed Not Only Corbyn But the Last Vestiges of British Democracy
Joseph Natoli
What Trump and the Republican Party Teach Us
Robert Fisk
Can Lebanon be Saved?
Brian Cloughley
Will Biden be Less Belligerent Than Trump?
Kenn Orphan
We Do Not Live in the World of Before
Kollibri terre Sonnenblume
Compromise & the Status Quo
Andrew Bacevich
Biden Wins, Then What?
Thomas Klikauer – Nadine Campbell
The Criminology of Global Warming
Michael Welton
Toppled Monuments and the Struggle For Symbolic Space
Prabir Purkayastha
Why 5G is the First Stage of a Tech War Between the U.S. and China
Daniel Beaumont
The Reign of Error
Adrian Treves – John Laundré
Science Does Not Support the Claims About Grizzly Hunting, Lethal Removal
David Rosen
A Moment of Social Crisis: Recalling the 1970s
Maximilian Werner
Who’s Afraid of the Big Bad Wolf: Textual Manipulations in Anti-wolf Rhetoric
Pritha Chandra
Online Education and the Struggle over Disposable Time
Robert Koehler
Learning from the Hibakushas
Seth Sandronsky
Teaching in a Pandemic: an Interview With Mercedes K. Schneider
Dean Baker
Financing Drug Development: What the Pandemic Has Taught Us
Greta Anderson
Blaming Mexican Wolves for Livestock Kills
Evaggelos Vallianatos
The Meaning of the Battle of Salamis
Mel Gurtov
The World Bank’s Poverty Illusion
Paul Gilk
The Great Question
Rev. Susan K. Williams Smith
Trump Doesn’t Want Law and Order
Martin Cherniack
Neo-conservatism: The Seductive Lure of Lying About History
Nicky Reid
Pick a Cold War, Any Cold War!
George Wuerthner
Zombie Legislation: the Latest Misguided Wildfire Bill
Lee Camp
The Execution of Elephants and Americans
Christopher Brauchli
I Read the News Today, Oh Boy…
Tony McKenna
The Truth About Prince Philip
Louis Proyect
MarxMail 2.0
Sidney Miralao
Get Military Recruiters Out of Our High Schools
Jon Hochschartner
Okra of Time
David Yearsley
Bringing Landscapes to Life: the Music of Johann Christian Bach
FacebookTwitterRedditEmail