UK owes developing world £17 billion annual ‘climate compensation'

The UK government comes under fire today in a new report which reveals that the current climate finance proposals, likely to dominate the weekend’s G20 talks, are likely to increase third world debt, and will be 'grossly inadequate' to tackle the scale of the problem.

The report by anti-poverty groups the World Development Movement and Jubilee Debt Campaign calculates that the UK alone owes a 'climate debt' to developing countries of over £17 billion each year for its contribution to climate change – an amount that is significantly more than that pledged so far.

They issued a stark warning that the issue of climate debt will be a 'Copenhagen deal-breaker' for developing countries, and the hope of getting a fair deal hangs in the balance.

The report, 'The Climate Debt Crisis', heavily criticises the UK's current policy of channelling its 'climate aid' through the World Bank, and of promoting the World Bank as the main hub of climate finance. It condemns the World Bank for distributing climate finance as loans, not aid, and for allowing finance to be used for new coal power stations, not low carbon energy investment. The campaigners are calling for the finance to be in the form of grants not loans, and to be disbursed through the UN.

They argue the rich world has caused climate change and must compensate poor countries which will be hit hardest. And that the finance is needed to help developing countries cope with the effects of climate change and to invest in low carbon development.

The campaigners also point to the World Bank's history of forcing developing countries to adopt economic policies that have increased poverty and carbon emissions, such as fossil fuel extraction, deforestation and intensive food production for export and which they say does not look set to change.

Tim Jones, author of 'The Climate Debt Crisis' at the World Development Movement said:'It's incredibly alarming that cash the government claims will help developing countries cope with climate change will actually increase their unfair debts. This is a huge injustice because we owe a much bigger debt to compensate developing countries for climate change. The UK government needs to realise that the issue of climate debt will be a Copenhagen-deal breaker. If rich countries refuse to recognise it, deeply rooted inequality and injustice will be locked in for decades to come. And that cannot be allowed to happen.'

Nick Dearden, director of the Jubilee Debt Campaign said: 'It’s profoundly unjust to saddle poor countries with decades of debt to clear up a mess created by the rich. What’s more, to put the World Bank in charge of this lending – the institution behind 30 years of dirty development – is like putting a shark in charge of a swimming pool. This isn't just another international meeting where the rich can bully the poor to sign up to a bad deal. Developing countries will not sacrifice their development to bail out the rich world's carbon binge. This is why Gordon Brown's climate plan is grossly inadequate. If the Copenhagen talks are headed for failure, as seems increasingly likely, it is because rich countries are refusing to pay their climate debt.'

Ricardo Navarro, a climate change campaigner from Central America said: 'If you look at the history of the World Bank, you will see that they have been at the centre of many problems in Central America. The UK should not give this World Bank fund a pound, I would rather that the UK government bought flowers for every household in the UK than spend this money on a World Bank coal fund.'

The campaigners are also warning strongly against the proposal to use the carbon market to raise climate finance for developing countries and instead are calling for the rich world's climate debt to be paid through innovative measures, including taxes on international transport and large financial transactions, as well as stronger measures to prevent tax evasion.

The World Development Movement's Tim Jones continued: 'Carbon trading is heavily touted by rich countries as a silver bullet that cuts emissions and delivers climate finance to the developing world. But it's not a solution; it's a stitch-up. The carbon market allows the rich to continue to pollute, and place the burden on poor countries to clean up our mess. This is a massive threat to poorer nations, which we and campaigners from developing countries will strongly resist at Copenhagen.'