UK 'climate aid' criticised for adding to Third World debt

By agency reporter
November 6, 2009

The UK government came under fire today in a new report revealing that the current climate finance proposals likely to dominate the weekend’s G20 talks will increase third world debt and will be "grossly inadequate" to tackle the scale of the problem.

The report by anti-poverty groups the World Development Movement and Jubilee Debt Campaign, calculates that the UK alone owes a 'climate debt' to developing countries of over £17 billion each year for its contribution to climate change – an amount that is significantly more than that pledged so far.

They issued a stark warning that the issue of climate debt will be a "Copenhagen deal-breaker" for developing countries and that the hope of getting a fair deal hangs in the balance.

The report, 'The Climate Debt Crisis', heavily criticises the UK's current policy of channelling its 'climate aid' through the World Bank and of promoting the World Bank as the main hub of climate finance. It condemns the World Bank for distributing climate finance as loans, not aid and for allowing finance to be used for new coal power stations, not low carbon energy investment. The campaigners are calling for the finance to be in the form of grants not loans, and to be disbursed through the UN.

They argue that the rich world has caused climate change and must compensate poor countries which will be hit hardest. And that the finance is needed to help developing countries cope with the effects of climate change and to invest in low carbon development.

The campaigners also point to the World Bank's history of forcing developing countries to adopt economic policies that have increased poverty and carbon emissions, such as fossil fuel extraction, deforestation and intensive food production for export and which they say does not appear likely to change.

Nick Dearden, director of the Jubilee Debt Campaign said: “It’s profoundly unjust to saddle poor countries with decades of debt to clear up a mess created by the rich. What’s more, to put the World Bank in charge of this lending – the institution behind 30 years of dirty development – is like putting a shark in charge of a swimming pool. This isn't just another international meeting where the rich can bully the poor to sign up to a bad deal. Developing countries will not sacrifice their development to bail out the rich world's carbon binge. This is why Gordon Brown's climate plan is grossly inadequate. If the Copenhagen talks are headed for failure, as seems increasingly likely, it is because rich countries are refusing to pay their climate debt."

The campaigners are also warning strongly against the proposal to use the carbon market to raise climate finance for developing countries and instead are calling for the rich world's climate debt to be paid through innovative measures, including taxes on international transport and large financial transactions, as well as stronger measures to prevent tax evasion.

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