In Climate loan sharks, the World Development Movement and the Jubilee Debt Campaign reveal that the UK is pushing $1.1 billion of climate loans, via the World Bank, on some of the poorest countries in the world.
For example Grenada’s debt is already 90 per cent of GDP, yet it is to be lent a further $22 million, over 3 per cent of the country’s GDP. Lending to such debt burdened country is at best irresponsible and at worst willfully dangerous.
The UK, and other rich industrialised countries in the global north, owe a debt to countries in the global south as compensation for the devastating effects of climate change they have the primary responsibility for creating. A key part of this compensation is providing finance to poorer countries to help reduce the negative impacts of climate change on their lives and livelihoods.
The report finds:
- The UK is providing most of its climate finance for adaptation in the form of capital that can only be dispersed as loans through the World Bank’s Pilot Program for Climate Resilience (PPCR). Of the capital that will be given out as loans via the PPCR, 97 per cent comes from the UK.
- Of the 11 country proposals developed so far under the PPCR, at least $1.1 billion (£704 million) of finance will be in the form of loans, making up over half of the total finance provided to ‘help’ poor countries adapt to climate change.
- $419 million (£263 million) of the money for loans proposed through the PPCR proposals come from the UK government.
- The idea of climate loans was created by the UK Labour government as an accountancy trick to make its balance sheet look better, a policy continued by the current coalition government.