COP21 & Climate Finance, investment or assistance?

As the discussions in Paris are getting hotter, some serious dilemmas are getting more obvious – unfortunately, we are still far away from having a common and targeted response to the questions posed. Let’s see the example of Bangladesh. With a population of 140 million, Bangladesh is one of the world’s most populated countries. It is also one of the most vulnerable to the impacts of climate change. Cyclones, floods and droughts have long been part of the country’s history and they have intensified in recent years. As a result of the long exposure to these hazards, Bangladesh is a world leader in adaptation strategies but this has come with a heavy price tag. Bangladesh’s Ministry of Finance has been working with the UNDP-UNEP Poverty-Environment Initiative to launch its first comprehensive climate change accounting system. The results of the financial review were really astonishing.
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Bangladesh currently spends $1 billion a year, 6 to 7% of its annual budget, on climate change adaptation. This is roughly 20% of the World Bank’s forecasted adaptation budget for the next 35 years! But it was spent just for one year (but this is another story, there are a lot of questions about the reliability of those long-term forecasts and their documentation). The facts reveal that 75% of money spent on climate change in the country comes directly from the government, while 25% comes from international donors. There is one more shocking detail: the average European citizen emits as much carbon in 11 days as the average Bangladeshi in an entire year.
Then, allow me to come back to my previous post on Climate Justice. We can’t put the burden for fighting climate change and funding adaptation strategies to the citizens of Bangladesh, we simply can’t ask them to pay for their protection from the pollution that the Western World has created – but this is exactly what’s happening now, in many cases, as the case of Bangladesh. If we don’t stop this practice, we simply erode any reliable agreement on Climate Change – as I have already written there is no real agreement without Climate Justice.
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Ok, but someone can say that rich countries are committed to provide 100 billion dollars to developing countries by 2020. On December 2, the US special envoy for climate change Todd Stern had told a press conference that donor countries were “well on the way to beating that pledge”. But allow me to mention that I have some doubts about those 100 billion dollars. Initially, I doubt a little bit about if those money will be, finally, available and also, I have my questions regarding the time horizon in which they will be given. In addition “If today’s public adaptation finance were divided among the world’s 1.5 billion smallholder farmers in developing countries, they would get around $3 each year to cope with climate change – the price of a cup of coffee in many rich countries,” as Oxfam’s climate policy adviser Jan Kowalzig recently said.
But, unfortunately, I have a more important doubt. Are those 100 billion dollars going to be given as loans (which means actually as an investment that will provide a certain profit) or as grants? Is it going to be recognition that rich countries have to pay a big part of the bill they have created or it will be one more way to create long-term dependencies of the poor countries? Gambia’s environment minister, and representative of the least developed countries group, Pa Ousman Jarju was absolutely right when he said: “We cannot take loans to pay for climate change and take that as climate finance. For us it needs to be grant-based finance because we are not responsible for what is happening.” So, let’s hope he will be heard, but let’s think that if the rich countries follow the path of loans, any climate deal will be fragile, ineffective and it will create much more problems than it will resolve.
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