The trouble with climate aid

The UK plans to offer climate-change adaptation funds in the form of conditional loans. The news will offer cold comfort for the developing countries hit worst by global warming, writes Erin Condit-Bergren.

A report in the Guardian newspaper on May 16 offered cold comfort for people in the developing countries worst affected by climate change. Britain wants to help them, but only if they get a little something in return. That's right, the UK treasury only wants to offer climate adaptation funds in the form of conditional loans, fully repayable with interest and administered by the World Bank.

Adaptation funding is a major issue in climate-change politics today.  It is clear that developing countries will be hit hardest by climate change. For example, sub-Saharan Africa, one of the poorest places in the world, is likely to suffer from much increased drought, disastrous in a region where the majority of the population depends upon subsistence farming. Small island nations in the Pacific Ocean and elsewhere may disappear entirely. If sea levels rise 1.5 metres by the end of the century, hundreds of millions of people could be displaced from coastal areas and become environmental refugees in their own countries, including 72 million people in China. As the People's Daily points out, China is suffering many of the effects of climate change, with agriculture being negatively affected, ecosystems changing, the spread of disease and potential threats to key wildlife species such as the giant panda. No country is safe from the impacts of climate change, but we are learning that poorer countries will be hit hardest. Yet because they have few resources available in terms of money and infrastructure, poor countries will find it very difficult to adapt to the environmental threats posed by a changing climate.

Wealthy countries, on the other hand, have produced the vast majority of the greenhouse gases which are causing climate change. Since the industrial revolution, countries like the UK and US have built economies that depend on the burning of fossil fuels for growth. Without having burned fuels like coal and oil, these nations would not have the wealth that enables them to adapt to threats such as unreliable precipitation and increasingly severe storms, both of which are caused by climate change. Thus the United Nations and the governments of many developing countries around the world demand that wealthy nations pay for the pollution they have caused. This payment should come in the form of aid funding with two goals. First, it must help people in poorer nations adapt to climate change, for example by helping farmers to change their methods so they are less vulnerable to changing weather patterns. Second, it must help poorer nations to “decarbonise” their development, so that they can develop economically using clean technologies which do not pollute the environment and cause global warming.

When the UK’s Environmental Transformation Fund (ETF) and its £800 million pot (almost US$1.6 billion) for developing country climate change assistance was being discussed and promoted at the climate change talks in Bali last December, it was clear that Britain was using it as a major tool in the negotiations to highlight the government's commitment to (and moral authority on) climate change. But the intention to disburse the fund in the form of loans (although it will, of course, still be earmarked as aid) belies the government's good intentions. Additionally, the Guardian report confirms rumours that had been circulating for some time: that the UK government is trying to get other G8 governments to also donate in the form of concessionary loans, ahead of a media push when the international adaptation funds are announced at the G8 meeting in Japan in July. However, other G8 countries, including the US, prefer to offer adaptation funding in the form of loans. Furthermore, the World Bank, the UK's loan distributor of choice, is well known for its enthusiastic funding of fossil fuel projects in the development world, and its refusal to cease this form of lending when its own independent review told it to do so.

"It should be grants and not loans, otherwise developing countries will have to pay twice, once for the emissions that caused the problems and then again to clean up the mess," said Tom Sharman, a policy adviser with ActionAid in London. And therein lies the rub: although the UK, the progenitor of the industrial revolution, is fully culpable in creating the current climate crisis, they refuse to redress the balance. Countries like Bangladesh, where 20 million people are under the threat of displacement from rising seas, will be expected to repay all their ETF adaptation assistance at market rates. It is yet to be seen how a relatively poor country like Bangladesh could ever come up with the money, let alone island nations like Vanuatu or Kiribati who may be entirely flooded by rising seas.

Adding insult to injury, global justice campaigners in the UK recently celebrated the 10th anniversary of the human chain during the G8 meeting in Birmingham. A landmark moment in the global Jubilee 2000 Campaign, the 70,000-strong human chain pushed debt onto the G8 agenda and led to widespread forgiveness of unpayable developing-country debts. The movement is so strong in the UK that Gordon Brown himself delivered a videotaped address at the rally in Birmingham. He is not expected to explain his ministers' new plan to increase the indebtedness of countries who can least afford to pay it back. After all, climate change isn't just a global catastrophe. For countries that control both the foreign aid and the pollution, it's a business proposition.

Erin Condit-Bergren is originally from Los Angeles and has worked on climate change and sustainability campaigns in six countries. She is a PhD candidate in Society & the Environment at the University of California, Berkeley.

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