Climate change should not be dealt with through reckless and irresponsible lending

Today, decisions are due to be made on new World Bank ‘climate loans’ to Cambodia, St. Lucia, Mozambique, Nepal and Zambia. To protest against these new loans and say no to the World Bank being involved in climate finance, WDM and the Jubilee Debt Campaign gathered outside the Department for International Development in London. 

We were there in solidarity with over 50 civil society groups from the 13 countries due to receive UK sponsored loans through the World Bank’s climate funds. At the end of the protest, two 'intrepid sharks' went in to hand a copy of a statement signed by these groups to DfiD staff to pass on to international development secretary Andrew Mitchell.

The UK government and the World Bank: climate loan sharks

Our new report, Climate loan sharks, shows how the UK is making developing countries pay twice for climate change even through they are not responsible for causing it. Firstly, they are paying with their lives and livelihoods, as the impacts of climate change, worse in the global south, are destroying peoples’ way of life. Secondly, they will be made to pay back the $1.1 billion in new loans which the World Bank, supported by the UK, is now pushing on them.

This is clearly reckless lending. The countries set to receive these loans, hand-picked by the World Bank, are already heavily debt burdened. For example, Grenada already has a debt of 90 per cent of GDP and the additional loans will add another 3 per cent on to that. 

Before the general election last year, both coalition parties pledged not to provide loans for climate change adaptation. That they are now doing so is incredibly irresponsible. 

How will they be paid back?

The worst thing is that these loans are intended to be used to adapt to climate change, for example, through ensuring agricultural practices can be maintained, building sea defences or dealing with increased salinity. These types of projects, by their very nature, will not generate any new money, they will only try to enable people to cope with a world changing around them. As a result, the recipient countries will not generate any new revenue to pay back the loans.

The UK's approach also fails to take into account its historical responsibility for climate change, as it has agreed to do through the UN climate negotiations. In addition, it has still not given a single penny to the UN Adaptation Fund, which gives grants and was set up collaboratively through the UN process.

Our report also reveals that the World Bank has failed yet again to put the interested of people living in poverty before the interests of profit and rich donor countries. For example, as so often before, it has failed to adequately consult the communities it is working with. In Nepal, the Bank refused to fund anything that Nepal had recognised as national priorities, while in Mozambique, civil society groups that the World Bank had listed as having been consulted said they had not even heard about the programme. 

So what can you do?

At WDM we are continuing to work in solidarity with groups around the world that are resisting these World Bank loans. It's great to see people from so many different countries coming together to say a firm 'no'.

You can help us by taking action and sending an email to our climate change minister, Chris Huhne, telling him not to undermine the intentional negotiations by supporting loans for climate change adaptation.

By building an international movement we can make it clear to the UK government and the World Bank that loans should not be an option when they are designing the next round of funding programmes.

Take action here