Climate loans threaten rerun of Copenhagen

UK loans to low income countries will make the poor pay twice for climate change

On Thursday, International Development Secretary Andrew Mitchell promised to stump up funds to ensure developing countries are better heard in climate negotiations. But it is difficult to see how those countries could be any clearer than they were last year at the disastrous Copenhagen climate summit - the problem is that the British government isn't listening.

At the end of next week, delegates from across the world will start arriving in Cancun for the follow-up to Copenhagen. They do so in the shadow of the World Bank's announcement of $270 million for three countries - Bangladesh, Niger and Tajikistan - to help them cope with the effects of climate change, for instance by protecting coastlines and planting crops more resilient to flooding.

These funds will be enhanced by others and ultimately the money comes from developed country governments like that of the UK. The problem is that much of the money will come not in the form of grants but low-interest loans. The total package given to Bangladesh, for instance, is $624 million, of which 92% comes in the form of loans. $60 million of these loans have come from the UK Government.

Why is this a problem? Because it contradicts the main principle which developing countries are fighting for in climate negotiations - that rich countries must not only reduce their emissions substantially but they must pay for poorer countries to clean up the devastation caused by climate change, not to mention helping those countries to develop in a more sustainable manner now they are denied the 'cheap development' which has fuelled wealth in the West.

Instead, offering loans attempts to make developing countries pay twice - first because they are suffering the worst consequences of climate change, but second because they now have to pick up the tab for that chaos when they repay their loans. That's why developing countries and campaign groups are united that these loans are completely unacceptable.

The developing countries involved in this first tranche of funding cannot be regarded as anything other than very poor. All are defined as low income. Bangladesh already has a high debt - $23.6 billion and rising, despite the country paying over $1billion a year servicing that debt.

Niger owes much less - but only because it received over $1 billion of debt relief in 2004 after struggling with unjust debts for over a decade. Meanwhile Tajikistan is already at high risk of a debt crisis according to the International Monetary Fund.

Forcing these countries to pay for their own clean-up is rather like breaking into your neighbour's house, causing devastation, and lending them money to get the cleaners in.

UK funds are all channelled through the World Bank, rather than a special United Nations fund which has been created through international agreement. This too is contentious. The UN Fund has a unique bottom-up approach to finance - any country can apply to it, and that country retains a good deal of control over how the project is implemented.

The World Bank, on the other hand, is top-down - selecting which countries should receive climate financing - and hypocritically remains one of the world's largest supporters of fossil fuel projects. In fact the UK has made the World Bank's funding even worse than it otherwise would have been; the Bank says that the only reason it is giving loans is because the UK has provided its money as capital rather than a grant.

None of this sits well with the pre-election commitments of the governing parties. Liberal Democrat party policy is to "support the UN Adaptation Fund" and to provide "grants for communities vulnerable to the impact of climate change without increasing the burden on indebted countries". Conservative party policy is to "continue, as far as possible, to give aid as grants not loans" and to "encourage other donors" to do the same.

Perhaps it's little wonder that expectations are being vigorously managed ahead of Cancun. But let's not pretend it's because developing countries can't be heard. Any progress towards a just climate solution depends on rich countries starting to listen pretty quickly.

Nick Dearden is the director of Jubilee Debt Campaign

Photo: Getty Images
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The buck doesn't stop with Grant Shapps - and probably shouldn't stop with Lord Feldman, either

The question of "who knew what, and when?" shouldn't stop with the Conservative peer.

If Grant Shapps’ enforced resignation as a minister was intended to draw a line under the Mark Clarke affair, it has had the reverse effect. Attention is now shifting to Lord Feldman, who was joint chair during Shapps’  tenure at the top of CCHQ.  It is not just the allegations of sexual harrassment, bullying, and extortion against Mark Clarke, but the question of who knew what, and when.

Although Shapps’ resignation letter says that “the buck” stops with him, his allies are privately furious at his de facto sacking, and they are pointing the finger at Feldman. They point out that not only was Feldman the senior partner on paper, but when the rewards for the unexpected election victory were handed out, it was Feldman who was held up as the key man, while Shapps was given what they see as a relatively lowly position in the Department for International Development.  Yet Feldman is still in post while Shapps was effectively forced out by David Cameron. Once again, says one, “the PM’s mates are protected, the rest of us shafted”.

As Simon Walters reports in this morning’s Mail on Sunday, the focus is turning onto Feldman, while Paul Goodman, the editor of the influential grassroots website ConservativeHome has piled further pressure on the peer by calling for him to go.

But even Feldman’s resignation is unlikely to be the end of the matter. Although the scope of the allegations against Clarke were unknown to many, questions about his behaviour were widespread, and fears about the conduct of elections in the party’s youth wing are also longstanding. Shortly after the 2010 election, Conservative student activists told me they’d cheered when Sadiq Khan defeated Clarke in Tooting, while a group of Conservative staffers were said to be part of the “Six per cent club” – they wanted a swing big enough for a Tory majority, but too small for Clarke to win his seat. The viciousness of Conservative Future’s internal elections is sufficiently well-known, meanwhile, to be a repeated refrain among defenders of the notoriously opaque democratic process in Labour Students, with supporters of a one member one vote system asked if they would risk elections as vicious as those in their Tory equivalent.

Just as it seems unlikely that Feldman remained ignorant of allegations against Clarke if Shapps knew, it feels untenable to argue that Clarke’s defeat could be cheered by both student Conservatives and Tory staffers and the unpleasantness of the party’s internal election sufficiently well-known by its opponents, without coming across the desk of Conservative politicians above even the chair of CCHQ’s paygrade.

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.