Is the Climate Finance the New Poorer Nations Debt Trap?
“Climate finance to developing countries continues to grow but in 2018 was still USD 20 billion short of the 2020 goal of mobilising USD 100 billion. Early 2019 data from the European Union and its member states, the largest provider taken collectively, indicate that bilateral public climate finance may have continued to increase last year,” said OECD Secretary-General Angel Gurría at the launch of "Climate Finance Provided and Mobilised by Developed Countries in 2013-18" report.
While developed countries have contributed most to exacerbating climate change, developing countries face the overwhelming burden of coping with its effects such as damage to crops and health care costs from heat waves and droughts, flooding and sea-level rise, increased food and economic insecurity. In many cases, the impact of climate change will be felt most severely by women, the majority of and poorest of the poor.
Analysis of the latest climate finance data shows that wealthy nations are giving less money to poorer ones for climate projects than their official statistics make out. In their recently published report, Oxfam found that nearly 80% of climate finance to developing countries took the form of loans, rather than grants. Poor nations were expected to pay richer countries back, often for investment in projects with weak climate credentials.
Between 2016 and 2018, the OECD- the group representing 36 of the world’s most developed countries reported that Asia benefited from the largest share of climate finance at 43%, followed by Africa (25%) and the Americas (17%). In terms of distribution by income group, 69% of climate finance went to middle-income countries, 8% went to low-income countries and 2% went to high-income countries, with the remaining 21% allocated at regional rather than country level.
That “is particularly unjust,” said Carty, of Oxfam, adding those were the countries that have “done least to cause the climate crisis but are being hit hardest”.
UNFCCC has set the goal of mobilising USD 100 billion per year by 2020 to help developing countries tackle and adapt to climate change. It has released its "Compilation and Synthesis report 2020" on the subject.
The OECD report confirms that far too much climate finance is given as loans that force poorer nations into debt — and who will pay for it?
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