As the latest round of UN climate talks kicks off in Doha this week, top of the agenda for developing countries, alongside the key issue of emissions reductions, is the question, ‘Where’s the money?’.
Rich industrialised countries are largely responsible for having caused climate change, yet the world’s poorest countries, which have emitted tiny quantities of carbon dioxide, are and will be the hardest hit by increasing temperatures, droughts and flooding.
For example, Bangladesh’s per capita emissions are, at 0.3 metric tonnes, just 3.5 per cent of the UK’s. But it is Bangladesh that could see 17 per cent of its landmass underwater as a result of climate change. To put that in perspective, if the UK were to lose 17 per cent of its landmass, we would lose an area twice the size of Wales.
So countries like the UK, which got rich by burning fossil fuels, owe a ‘climate debt’ to developing countries.
The UN World Economic and Social Survey says that developing countries need US$500-600 billion a year to reduce emissions and adapt to climate change, while South Centre economist Dr Manuel Montes calculates a figure of US$600-1,500 billion a year.
But the world’s rich countries have spectacularly failed to cough up.
At the Copenhagen climate talks in 2009, developed countries pledged just US$30 billion for a so-called ‘fast-start’ period from 2010 to 2012. Most of what is counted under this figure is existing foreign aid rather than new money, and only US$23.6 billion of the promised US$30 billion has been committed so far.
In the case of the UK, most of the money provided so far has been in the form of loans through the World Bank, rather than grants, risking pushing poor countries deeper into poverty as they will have to pay the loans back.
Developed countries also promised in 2009 that they would provide US$100 billion per year by 2020 – but there is little sign of this so far. And adaptation finance, which is money needed to ensure that communities can adapt to the damage caused by climate change, has been especially neglected.
These adaptation measures – building flood defences for example – are needed to save lives but do not provide a return on investment and so must be financed through public finance rather than unjust loans. So far, only 21 per cent of global climate finance has gone into adaptation, of which most of the UK’s contribution has been in the form of loans through the World Bank.
Last year’s climate talks in Durban saw agreement on the foundation of a Green Climate Fund to manage the transfer of climate finance from developed to developing countries, and any financial pledges made at the Doha talks now underway could give it a clearer shape.
But rather than committing public money to this fund, rich country governments, led by the UK, are pushing for it to focus on ‘leveraging’ private finance. This means money from the fund could end up going directly to big companies for projects they would be pursuing anyway, rather than helping protect the most vulnerable people from the effects of climate change.
What’s more, despite the objections of developing countries, the World Bank has secured the role of interim trustee of the Green Climate Fund. With its totally undemocratic way of operating and its history of pushing fossil fuel-intensive projects, the bank is seen by many as a totally inappropriate body to oversee the fund.
If the Doha talks are to make any real progress, developed countries must pay their climate debt to poorer countries, setting tough emissions targets for the second commitment period of the Kyoto protocol and making firm commitments to long-term, large-scale climate finance. Money most be allocated according to the priorities of the recipient countries, not the donors, though grants not loans. And rather than relying on the private sector to bring about just solutions to climate change, it is essential that public funds are generated for climate finance, for example through a financial transactions tax (FTT) or global levies on aviation and shipping.