Climate debt news
Facts behind the climate finance figures
The issue of climate finance is a Copenhagen deal breaker for developing countries, and much has been made by Gordon Brown and yesterday, Hillary Clinton, on the need for climate finance.
Both have put forward figures to 'help' developing countries cope with the impact of climate change. But the World Development Movement’s analysis shows that the facts behind the figures add ‘insult to injury' for developing countries. Of the $100 billion 'announced' yesterday by Hillary Clinton, half or more would be financed by carbon trading and developing countries.
Tim Jones, climate policy expert at the World Development Movement said:
“The small print behind the head line grabbing figures adds insult to injury for developing countries. Money that is being announced here is diverted from existing aid budgets; given as loans not aid; and is being financed through a flaw ridden offset scheme. What we need to see is developed countries admitting their historic responsibility for the problem that has brought us all here and offer compensation to developing countries, not bribery, bullying and belligerence.”
The World Development Movement’s analysis reveals that:
Short term finance (2010-2012)
The EU and US are calling for $10 billion a year from 2010 to 2012. Over 100 developing countries and the World Development movement are calling for $400 billion. Of the $10 billion:
- All of it comes from pre-existing aid commitments, so is not new money, just diverting finance from other aid areas
- $2.5 billion has already been given by developed countries
- So far 50 per cent is loans which will just increase unjust debts, rather than grants
- So far 55 per cent is being spent through the World Bank, compared to just 1 per cent through the United Nations
The UK has pledged $800 million a year to the $10 billion total:
- All of this comes from pre-existing aid commitments, so is not new money, just diverting finance from other aid areas
- $430 million, over half, was first pledged by Gordon Brown in 2007, and has already been given to the World Bank
- So far 75 per cent is loans which will just increase unjust debts, rather than grants
- So far 80 per cent is being spent through the World Bank, compared to nothing through the United Nations
Medium/long term finance (by 2020)
The EU and US have now both said the costs of tackling climate change in developing countries will be $100 billion by 2020. This is not the same as saying rich countries will pay $100 billion by 2020.
How the EU and US expects the $100 billion in costs to be paid:
- $22-$50 billion from public expenditure by governments from both rich countries and poor countries. The only countries not expected to contribute are the Least Developed Countries.
- An unspecified but large amount from carbon offsetting. Even if offsetting did help tackle climate change in developing countries, this is counted towards meeting rich country emission reductions obligations, so cannot count towards meeting their financial obligations as well.
- The remaining costs, potentially a large amount, will not get any international financial support. Poor countries damaged by climate change caused by rich countries are expected to bear the costs themselves.
Of course, the true costs of climate change in developing countries by 2020 will be much higher. Over 100 developing countries say the costs are already $400 billion a year. Using data from the UN and IPCC, World Development Movement estimated in November 2009 that the costs of climate change in developing countries will soon by over $400 billion a year.
Whilst the EU and US have not been specific enough to give an accurate figure, based on the above they are offering that rich countries collectively meet a maximum of 10 per cent of the costs of climate change in developing countries.
 Both mitigation and adaptation.
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