Climate debt news
Developing countries and civil society speak out against 'Greedy Corporate Fund'
Guest post by Murray Worthy, used to be policy officer writes from Durban
One of the key issues being debated here at the UN climate talks in Durban is the establishment of a new 'Green Climate Fund'. It is hoped that the fund could replace the role the World Bank is playing in managing climate finance at the moment, and be the main fund for managing global climate finance. At the UN talks Developing countries and international civil society groups have spoken out against proposals for a dedicated private sector arm of the proposed new fund.
Today, 163 organisations including the World Development Movement, from 39 countries released a letter exposing efforts by the UK and US to turn the Green Climate Fund into a 'Greedy Corporate Fund' at the UN talks. The proposals for a dedicated arm to directly finance the private sector would lead to public finance, often taken from overseas aid budgets, being used to subsidise multinational companies from the global north. Relying heavily on the private sector would also skew what finance is used for, with finance diverted to already profitable energy projects - rather projects aiming to reduce the devastating impacts of climate change or supporting community energy projects.
The proposals would also mean that finance would be given directly to multinational companies, bypassing developing country governments. Lidy Nacpil of Jubilee South Asia/Pacific Movement on Debt and Development, one of WDM's allies from the global south said:
The role of private investment in financing climate activities must be decided at the national and sub-national levels in line with countries’ priorities, not corporate bottom lines. The move to allow the private sector to go directly to the Green Climate Fund for money undermines the possibility of a democratic, participatory process for meeting the needs of communities struggling to fight climate change.
Meanwhile in the negotiations, developing countries also spoke out against the current proposals for the fund. Nigeria said that it had no faith that the private sector would deliver the finance needed to developing countries, and challenged the idea put forwards by developed countries that the free market will step in to help them. Egypt also opposed the current proposals saying they did not the meet the needs of developing countries, and undermined developing countries' ownership of climate finance projects.
Venezuela expressed its 'deepest alarm' at the proposals which would establish a fund "diametrically opposed to positions of developing countries and that would hinder democratic access to finance". It said that the current proposals could not be accepted as it would establish a bad fund, setting a damaging precedent for future climate finance.
Developing countries urgently need a new institution to deliver climate finance, with the need for finance to help countries deal with the impacts of climate change estimated to be over $500 billion each year. The UK and US are still pushing hard for the current proposals, if not changing them to make them even worse. We will keep working with our allies to support developing countries in the talks, and oppose the work of the US and UK, to try and make sure this fund meets the needs of developing countries set to suffer the devastating impacts of climate change - not subsidise rich multinational corporations.