4 minute read
Climate debt
It's payback time
Boris Johnson has called on rich countries to pledge more climate finance at COP26. But as DANIEL WILLIS writes, the UK is a long way short of paying its own fair share.
At last month’s UN general assembly in New York, prime minister Boris Johnson tried to show off his ‘climate leadership’ credentials. He hectored world leaders to increase their climate finance commitments, while announcing that the UK will increase its own contributions in the next five years. “History will judge,” he said.
If you’ve come across Boris Johnson before, you’ll already know that there’s a catch. At $3.2 billion a year (£2.3 million), the UK’s climate finance commitments still fall well short of what southern leaders argue would be this country’s ‘fair share’, based on the UK’s historic contributions to climate change. Even worse, this funding isn’t new and additional as the UN requires it to be, but will instead be raided from the UK aid budget, which the government has already cut by £4 billion this year.
PAYING OUR FAIR SHARE
Over a decade ago, rich governments agreed to collectively pay the global south $100 billion a year in climate finance by 2020. The goal was designed to account for the historic carbon emissions of the global north and to support the global south to decarbonise and adapt to climate change. Yet not only have they failed to meet this target, the target itself was always far too low Alternative calculations by global south leaders argue that the UK alone should instead be paying at least $46 billion a year to the global south to cover its fair share of climate finance.
The UK alone While this sounds like a lot, it is less than should be paying 1.5% of this country’s annual national at least $46bn a income, and would year to the global save a lot of money in terms of dealing south to cover with the impacts its 'fair share' of of climate chaos in the long term. One climate finance. LSE study found that rich industrialised countries together must provide $400 billion to $2 trillion a year of climate finance by 2050 to collectively pay their fair share. The UK’s recent increase, and President Biden’s announcement in September that the US will contribute $11 billion a year (the US’s fair share is $80 billion), therefore remain well short of what is needed. Yet a lack of ambition is not the only problem with these pledges.
DODGY ACCOUNTING
Firstly, there are a raft of ways in which rich countries overcount the limited finance that they have contributed. Of
Protesting outside the Asian Development Bank in the Philippines.
Photo: © Pat Roque/AP/Shutterstock
the $79 billion the OECD said that the global north had provided in climate finance in 2018, Oxfam analysis suggests only $20 billion meets the definition of genuine climate finance. That is partly because 74% of this finance was provided as loans, not grants, meaning that governments were counting money they would eventually get back as assistance to the global south.
Furthermore, the funding is meant to be new and additional. In contrast,
the UK has consistently raided the aid budget to provide climate finance, when the two must stay separate. As one Indian government ministry put it, the UK is “robbing Peter to pay Paul”, and putting vital aid-backed services in healthcare and education at risk through its approach to climate finance.
DEBT AND REPARATIONS
On top of receiving the vast majority of climate finance in the form of loans, countries in the global south are facing a Covid-19-induced debt crisis which threatens to plunge up to 150 million people into extreme poverty. And the growing impacts of climate change look set to make this worse.
Climate change-related disasters take a heavy financial toll on low and middle income countries, particularly on the least developed countries and small island developing states, often forcing them to take on more debt to rebuild. For example, a UCL study found that six hurricanes in Antigua and Barbuda between 1995 and 2010 cost the state $335 million, while Irish Aid estimate that climate change is set to cost heavily indebted Zambia $4.3 billion over a 10-year period
These economic losses exacerbate debt problems, by making it difficult for governments to make their existing repayments and by forcing them to turn to lenders for further loans. Breaking the climate-debt cycle through widespread debt cancellation should therefore be a key part of all programmes for climate justice.
Even with drastic emissions reductions, debt cancellation and climate finance, however, the global south may never be fully compensated for the lost development opportunities taken from them by the global north. Rich countries got rich burning coal and oil, but that opportunity will never be afforded to the global south. Furthermore, climate finance does not cover the harder to quantify losses (including displacement and lives lost) due to climate change. Because of this, reparations must be made.We need to call out the UK’s climate hypocrisy before, during and at COP26. It’s time that the UK paid up and contributed its fair share of climate finance. But we must also demand our government uses its COP presidency to push other rich countries to agree a new climate finance deal that represents equity and justice for the global south. If it doesn’t, history will certainly judge.
Daniel Willis is climate campaign manager at Global Justice Now.
TAKE ACTION
Call on the UK government to pay its fair share of climate finance:
