The menace of climate debt

July 25, 2008

NewAge, July 25, 2008. Dhaka, Bangladesh

It is becoming increasingly crucial that governments such as ours adopt training programmes to help bureaucrats across the board attain a more nuanced understanding of climate change, writes Mahtab Haider*

THIS week, New Age reported that tensions have peaked between the environment ministry and the Economic Resources Division of the finance ministry after the latter expressed a sudden interest to negotiate for World Bank loans to tackle climate change. According to the report, the ERD – Bangladesh’s foreign assistance gatekeeper under the finance ministry – is keen to avail loans from a multi-donor trust fund operated by the World Bank, while the environment ministry insists that foreign assistance in the area of climate change should predominantly be in the form of non-repayable aid and grants. 
   

The ERD is perhaps unaware that in its keenness to flex its muscles in attracting climate change funding, it has contravened one of the principled positions that Bangladesh has taken at various times in international climate negotiations. It has consistently been Bangladesh’s position as a member of the least developed countries group at global negotiations, that developed countries – whose industrial excesses are largely to blame for global warming – must compensate the LDCs and the developing world for the climate cataclysms that they are now experiencing. This is premised on the idea that 140 million Bangladeshis should not have to pay with lives, livelihoods, and destitution, for the environmental consequences of the industrialisation of Western Europe, the US and a clutch of other countries over the past century. In that sense, Bangladesh and the members of the LDC group, as well as a number of small-island states have a moral claim on cash compensations that cannot be hinged on conditionalities that typically accompany traditional grants and aid.
   

In an interview with New Age ahead of the high-profile Bali climate change summit last year, the environment adviser CS Karim rightly invoked the ‘polluter pays’ principle to justify this position that Bangladesh had adopted and continues to campaign for. ‘They owe us compensation as we are prime victims of a crime that we had no part in,’ Karim told New Age. This idea is also the basis for Article 4.3 of the United Nations Framework Convention on Climate Change – the core document which sets the terms of reference for all global negotiations on climate change. Furthermore, Bangladesh also leads the LDC group in its political negotiations at the annual Conference of Parties, and it would be foolhardy for the country to risk alienation in the LDC group by availing loans for adaptation funding, when it has played such a strong role in the past in dismissing the idea of loan financing for adaptations. So, while the ERD clearly has expertise in handling the foreign assistance that Bangladesh receives in other areas, it should learn to take the cue from its colleagues in the environment ministry in order to avoid risking Bangladesh’s standing at international negotiations for a pittance in World Bank loans. 
   

The conflict is not unexpected, and it certainly has been brewing awhile, indicative of the end of an era. The environment ministry has, over the past two decades, developed a certain expertise in dealing with the issue of climate change, and has a historical understanding of Bangladesh’s position at international negotiations on climate change. But, as governments across the world are learning, climate change is no longer an issue that concerns any single line ministry exclusively, and calls for a far more holistic developmental view of the challenges. In the coming decades the whole spectrum of government ministries and agencies will have to face up to the fallout from climate change in their relevant areas of work. As a rise in global temperatures causes crop failures or falling yields requiring action from the agricultural ministry, the health ministry will find malaria or dengue morbidity rising, and the disaster management ministry will find itself tackling a rising frequency of tropical cyclones along the coast. And that’s just a few predictable outcomes of only one of the gamut of climate variations that countries like Bangladesh will encounter. This means, it is becoming increasingly crucial that governments such as ours adopt training programmes to help bureaucrats across the board attain a more nuanced understanding of climate change, building on the general doomsday scenario of coming floods, cyclones and droughts that they currently might have. 
   

The reason this inter-ministerial coordination is fast becoming an imperative also has to do with Bangladesh’s profile as a climate change victim. In the past year, since the Intergovernmental Panel on Climate Change released a series of reports affirming that the science of global warming is as robust as can be, Bangladesh has received widespread media attention as the country that will confront some of the biggest challenges posed by global warming. With the heightened call for global action on climate change, the amount of foreign assistance available to tackle climate change has been steadily rising, especially for Bangladesh, with a scrum of NGOs eager to be seen funding climate research or action in the disaster-prone country. Given this scenario, the ERD requires specific sensitisation on why it is important that we are selective in whom we accept assistance from, and what form this assistance can take. In 2007, Bangladesh spent $1,551.3 million in hard-earned foreign currency on servicing its external debts – roughly 18 per cent of total government expenditure. During that same year, public spending on education and health were 16.5 per cent and 7.4 per cent respectively – revealing the extent to which a debt trap can cripple the development of a country. For every dollar in foreign grant aid received, the government spends over $1.5 in debt service to foreign creditors annually, a 2003 study revealed. In such a scenario, it is difficult to grant the ERD the benefit of doubt for its evident inability to fathom the economic consequences of the new debt it seeks to create, especially since the World Bank is known to have significant sway in the ERD’s decision-making process. 
   

Most of all, it is important for all government agencies to realise that the World Bank’s role in disbursing loans and grants faces widespread criticism in the group that Bangladesh leads. Our own experience with the bank has been no sweeter either; between 1980 and 1990 – during a decade of military dictatorships characterised by rampant corruption and political oppression – Bangladesh’s debt figure tripled to $12,439 million, with the bulk of this surge in lending to autocratic regimes coming from the International Development Association, the soft-loan window of the World Bank. It is also a fact that as one of the three implementing agencies of the Global Environment Facility which has hitherto been responsible for dispensing funds for adaptations measures in the LDCs and the developing world, the bank has a controversial track record. Members of the LDC group have time and again pointed out that the bureaucracy and the technical requirements that needed fulfilling to qualify for such funding was often rigged against the least developed world. So much so that the Bali Summit last year saw immense pressure from the G77 group and the LDC’s to place future adaptations funding beyond the ambit of GEF control. 
   

Negotiations are currently ongoing to determine the nature and the format that future adaptations funding will take in a post-2012 era after the Kyoto Protocol expires. As one of the countries of the LDC group that is seen to have a strong moral case for demanding compensations and non-repayable assistance to tackle the fallout of climate change, Bangladeshi bureaucrats must realise that they are also burdened with a grave responsibility which they must not squander in our interests, and as a leader of those who share those interests. 
   

Contact: mahtabhaider@gmail.com

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CALL FOR PEOPLES SAARC 2008!

July 24, 2008

South Asian heads of government will meet in Colombo, Sri Lanka for the annual South Asian Association for Regional Cooperation (SAARC) summit between 27 July and 3 August 2008.

Regrettably, this SAARC summit will be no different to its predecessors in having little relevance to the needs and daily struggles of the peoples of South Asia. Its agenda will be shaped by the policy choices of post-colonial elites, while it has spectacularly failed to achieve regional unity or even facilitate grassroots initiatives in that direction.

Therefore, since 1993, social movements and peoples’ organisations have also converged in parallel to the SAARC summit to raise our agenda for our region, to demonstrate our will for friendship, solidarity and visa-free movement of people across imposed boundaries, and to manifest our desire for a peoples union of South Asia.
 
On 18, 19 and 20 July 2008, hundreds of women, workers, peasants, artisans, urban and rural poor, students and youth, cultural activists, scholar activists, and representatives of marginalised and excluded social groups and communities from around South Asia will gather at Peoples SAARC 2008 in Colombo, Sri Lanka.

The main theme of Peoples SAARC 2008 is “Towards A South Asian Union” while the sub-themes include women’s rights; demilitarisation, denuclearisation and democracy; right to food, livelihood, health, education and social security in the context of alternatives to neo-liberalism; environmental justice and natural resource rights; and South Asian solidarity with anti-imperialist struggles worldwide. A mass rally for peace and justice in South Asia will form part of the closing ceremony.

We call upon all those who affirm the vision of a peoples union of South Asia to join country-level preparations, mobilise for, and participate in Peoples SAARC 2008 in Colombo on 18, 19 and 20 July 2008.
 
For further information contact: Secretariat, Peoples SAARC 2008, 19/1/1, Siri Dhamma Mawatha, Colombo 10, Sri Lanka or Email: peoplesaarcsl@gmail.com or Tel: +94 11 267 2586.


Doha is the Problem, NOT the Solution

July 24, 2008
Reject the Doha Round!

Call to Action

We, representatives of peasant organizations, women, migrants, workers, urban and rural poor, fisherfolks, social movements and civil society organizations from East and Southeast Asia call for the rejection of the Doha Round. 

We condemn and urgently call the attention of others to the attempts to conclude the Doha “Development” Round through a Mini-Ministerial in Geneva this July 21-26, 2008. This informal meeting to be convened by WTO Director General Pascal Lamy will begin July 21 and last for up to one week. Only around 30 trade ministers were invited to take part in this informal and exclusive phase of negotiations with unfair and imbalanced texts as the basis for the talks. 

The current texts show that the ambitious agenda to open up markets for agricultural and industrial goods, and services and not development and flexibilities for developing countries has become the core element of these negotiations. The texts continue to reflect the intransigence of developed countries to give in on demands for reduction of farms subsidies on the one hand and their aggressive push for substantive market access in goods and services on the other hand.  The major concessions given for the sake of the Doha round have consistently been made by developing countries.

We reiterate our call to end the Doha Round and reject all attempts to revive it, knowing that in the three major areas of negotiations – agriculture, NAMA and services – the majority of proposals under discussion are designed to protect and promote the interests of the rich countries and transnational corporations. 

Lamy along with the leaders of the World Bank and IMF are pushing for the conclusion of the Doha Round as the solution to the current global crisis of rising food prices. This is yet another false claim as years of trade liberalization have shown that promises of development are empty. 

Doha is the problem, not the solution. Further trade liberalization and forcing open of markets in the developing countries will leave them even more vulnerable to not only the food price crisis but also the financial crisis. If the current texts are agreed to and the Round is concluded, this will foreclose any chance for development for developing countries. 

We call on our governments to reject the attempts to conclude the Doha “Development” Round, at the expense of the people. 

We commit to mobilize at the national, regional and international levels to stop the revival of the Doha “Development” Round from July 21 to July 26, 2008. We call on other movements, peoples’ organizations and civil society groups to join us in our struggle. 

Globalize hope, globalize the struggle!

SIGNED:

Alliance of Progressive Labor, Philippines 
Asia Pacific Movement on Debt and Development-Jubilee South
ATTAC Japan
BanglaPraxis
Focus on the Global South 
FTA Watch Thailand 
Gerak Lawan, Indonesia (People’s Movement Against Neocolonialism-Imperialism)
Globalization Monitor, Hong Kong
Hong Kong Confederation of Trade Unions (HKCTU) 
International Gender and Trade Network – Asia
Institute for Global Justice, Indonesia
KALAYAAN!(Movement for People’s Freedom) Philippines
Kilusang Mangingisda (Fisherfolk Movement-Philippines) 
Korean Confederation of Trade Unions (KCTU) 
Migrant Forum in Asia 
Serikat Petani Indonesia (Indonesian Peasants Union) 
Stop the New Round! Coalition Philippines 
WELGA (Women Against Globalization and Poverty) 
WomanHealth Philippines
Aniban ng mga Manggagawa sa Agrikultura (AMA) 
SANLAKAS
Solidarity Workshop
AID/WATCH
Food Policy Center Vision21 (Japan)
Philippine Rural Reconstruction Movement
Union syndicale Solidaires – France
Nord/Sud XXI
Bina Desa, Indonesia
International Movement For A Just World (JUST)
Tamilnadu Women’s Collective
Tamilnadu Resource Team
Kalanjium Unorganised Workers Union
Kalanjium Women Farmers Forum
Social Movements Indaba, South Africa
Equity and Justice Working Group Bangldesh
CPAES ( Centre for Promotion of Economic and Social Alternatives), Yaounde –
Cameroon
National Foundation, Pakistan
Indian Social Action Forum (INSAF)
Global Network Asia
RNDD-Niger
Daughters of Mumbi Global Resource Center, Nairobi, KENYA
Freedom from Debt Coalition, Philippines
Jubilee South Africa
ATTAC Morroco
Globalization Watch Hiroshima
Movement for National Land and Agricultural Reform (MONLAR), Sri Lanka
Womyn’s Agenda for Change, Cambodia
SANLAKAS, Philippines

To sign on to this statement, please email: marylou@focusweb.org


Turmoil over transit

July 24, 2008

Tanim Ahmed*, NewAge, July 24, 2008. Dhaka, Bangladesh

The suspicion with which Indian proposals are viewed in Bangladesh can only be done away with through prudent and generous gestures that would hardly cost an advanced developing country like India but provide much for a least developed country like ours. Transit is, therefore, quite rightly a sensitive issue and Bangladesh should not be asking what it would get in return. It should be the position of Bangladesh that trade and investment regulations in India should first reflect the same, if not better, openness and generosity that Dhaka has already shown

 IT WAS hardly surprising when an Indian High Commission communiqué to the finance ministry, prior to the July 17-18 foreign secretary-level talks between Bangladesh and India, stated that New Delhi would once again ask Dhaka for transit facilities at the talks. India has, on several occasions in the past, pressed Bangladesh for transit facilities. The reason is obvious. It takes more money and time for goods, products and machinery to travel from provinces like West Bengal to the Seven Sisters, seven north-eastern provinces of India, by going around Bangladesh than it would if Indian goods could go through Bangladesh. This time, according to reports, India asked for transit facilities for vehicles and people through Bangladesh into the provinces of Meghalaya, Tripura and Mizoram through three transit points — Tamabil, Bibirbazar and Khagrachari. There were quite naturally other complementary demands that included time periods that Indian vehicles would be permitted to stay within Bangladesh and so forth. New Delhi wanted to have a five-year agreement signed.
   

The economics behind asking for transit facilities are compelling and would only add to the welfare of people in one of India’s most troubled regions, which is generally perceived as the backwaters of one of the world’s strong economic powerhouses. Besides, transit facilities should exist between the countries of the SAARC region as a norm rather than an exception. The Indian external affairs minister, Pranab Mukherjee, told a SAARC conference in March 2007 in New Delhi, ‘We believe that the entire region stands to benefit if we end all restrictions on overland trade among the nations of the region.’ As he pointed out, quite rightly, the South Asian Association for Regional Cooperation, a regional grouping of Afghanistan, Bangladesh, Bhutan, India, the Maldives, Nepal, Pakistan and Sri Lanka, stands to gain substantially from increased economic cooperation.
   

The Indian state minister for commerce, Jairam Ramesh, when inaugurating a Bangladesh Fair in Agartala in India’s Tripura state in 2007, meanwhile, assured Bangladesh that all non-tariff barriers on India’s imports from Bangladesh would be reduced to correct a huge imbalance in the two-way trade. He said, ‘India is also ready to consider a proposal to remove Bangladesh from the negative list of nations which are barred from investing in the country.’ Ramesh also brought up the transit issue quite forcefully during a visit to Bangladesh about a year ago. At the inauguration of India-Bangladesh Chamber of Commerce and Industry, it was pointed out that the trade gap between these two countries was extremely skewed in favour of India with Bangladeshi exports to its neighbour accounting for just over a tenth of the formal trade volume worth more than $2 billion at that time, as New Age reported on July 23, 2007. Ramesh said, ‘If Bangladesh wants to reduce the trade deficit with India quickly, I would once again request that you consider the long-standing issue of granting transit rights to India…Bangladesh is perfectly entitled to ask – what will we get in return for granting transit.’ Ramesh also suggested that if Bangladesh wanted more trade with India, reduced tariffs and such benefits it would have to be bold enough to say ‘yes’ to transit.
   

As before, the recent focus on the transit issue elicited sharp reactions from the political parties that indicated that India was trying to secure a concession that the incumbents did not have the mandate to give. While some indicated that our largest neighbour was unduly pressuring a weak government whose influence and acceptance was on the wane, others suggested that the military-controlled interim government was going out of its way to consider this issue more seriously than their predecessors only to appease certain quarters and strengthen its support base. Perhaps, it was meant to be a reply to such strong political reactions when the Indian high commissioner to Bangladesh, Pinak Ranjan Chakravarty, said on July 13, ‘We believe it [transit] is purely an economic issue, not a political issue at all. But here it is made a political issue although I do not see any reason for that.’
   

The reactions from political quarters regarding transit, as before, quite clearly belied the lack of objectivity with which successive governments of Bangladesh and political establishments have viewed cooperation with India. At the heart of this request from India is quite obviously economic rationale and hence, as the Indian high commissioner said, transit could be termed to be essentially an ‘economic’ issue. But the matter, as any decision relating to the nation state, is very much a political one. It is up to the political vision of the incumbents and how they interpret their responsibility to run the affairs of the state that eventually dictate how to approach this request and what to ask for in return. That there has been lack of objective negotiation or discussion in this regard within the political establishments may hold true; however, it still remains a political decision of the ruling Bangladesh government, just as it would be in India. 
   

There appears to be a common perception that transit facility to India would only provide benefits for India and not for Bangladesh. There is much to gain strategically as well as economically from giving India such a facility – it is merely a matter of constructive engagement and dynamic negotiations. Moreover, such a facility, as Mukherjee told the SAARC conference, would be beneficial for all the countries in the region. It would increase the scope for interaction between citizens and peoples of the countries and pave the way towards a more vibrant and integrated South Asia that has much potential to become a formidable trading bloc as a unit rather than as individual entities. Incidentally, India is also the only country in the region that has borders with four of the original SAARC members, the other two of the original seven being island nations, while none of the others have borders with each other. Thus, as far as transit goes, trade with third countries could only be facilitated if India is willing to allow transit through it. Be it a formidable trading bloc, be it trade with a third country through transit, the smaller nations like Bangladesh, Nepal or Bhutan have more to gain than does India, which is already considered an emerging economic superpower in the world along with countries like Brazil and China.
   

Indeed, even at the ongoing mini-ministerial meeting of the World Trade Organisation, which is being attended by 30 odd ministers, there were warnings on the eve of India’s ‘no confidence’ vote in parliament, which the ruling Congress party survived, that there would be no point in concluding a trade deal without Indian endorsement of a final outcome in the WTO where it has become one of the movers and shakers and a significant power broker. Currently, the developing countries are pushing for reduction of farm subsidies in the developed countries and protesting against the developed countries’ bid to secure reciprocal benefits from the large developing countries. The developing countries, including India, have rightly pointed out that reciprocity in this instance, particularly when it is between much stronger developed countries and emerging developing countries, is inherently unfair and undermines development. Unfortunately, however, it is not with the same spirit that India negotiates trade and economic matters with its smaller neighbours. Not only does India refrain from making more generous concessions to its neighbours, it does not even reciprocate the preferences and concessions accorded by its smaller neighbours to it.
   

In the case of Bangladesh, for instance, there are virtually no bars from Indian investment flowing into almost every sector, even sensitive ones including mineral resources, health services, educational institutions and so forth. There are no bars on Indian publications entering Bangladesh. Indeed, some of the Bengali publications from West Bengal thrive on Bangladeshi subscription and would find it rather difficult to sustain without their Bangladeshi readership. The markets are flush with consumer goods and industrial products manufactured in India. It only points to the fact that there hardly any effective trade barriers –tariff, non-tariff or para-tariff – for Indian products to enter Bangladesh.
   

However, the same is not true in the case of Bangladeshi products going into India. India’s arbitrary anti-dumping claim at the WTO regarding Rahimafrooz car batteries from Bangladesh comes to mind. Even according to competent Indian authorities in this matter, the case did not merit an anti-dumping claim as Rahimafrooz had at that time secured only a negligible portion of the Indian market. However, like other anti-dumping cases, the product did not quite regain its market once the complaint was withdrawn. Neither has India compensated Bangladesh for accrued losses in any way for that. As for investment, Bangladeshi investment has only recently been allowed by India but only on ‘case by case’ basis, almost the same treatment given to Pakistan. It is plain from the comments of Ramesh at Agartala that even till 2007, Indian regulations prevented flow of Bangladeshi investment, which was hardly the case in Bangladesh. There are myriad different barriers, in the form of permits and licenses and so forth, that effectively bar Bangladeshi products going into India although there are no such regulations in Bangladesh for like products from India. In this regard, Bangladesh, being a least developed country, has, in fact, overdone itself to appease its larger neighbour but received little in return.
   

Although India should have more than reciprocated Bangladesh’s gestures in trade and investment, those same preferences that Bangladesh rightly deserves are being linked with transit. India has indicated severally that reduction of tariffs could only happen once it is accorded transit facilities. India has obviously learnt well the game of cross-linking when bargaining and negotiating for trade preferences at the highest international levels. However, in this case, India is trying to bargain with preferences that it is in a way obligated to provide; a developing member of the regional association should accord privileges to a least developed member. Now it is transit. But very soon it will be India’s access to the service sector in exchange for tariff reduction and trade preferences. But even beyond that there should be such measures that allow Bangladesh an opportunity of securing comparable revenues from its exports to India.
   

It is not just an isolated case between Bangladesh and India. The largest country of the South Asian bloc has acrimonious relationships with almost all the smaller countries that it has borders with and the attitude of the Indian establishment has played a major role of creating such a discord out of a potentially friendly and peaceful region. When in 2006, Nepal’s transit facility through India — which is Nepal’s lifeline for international trade — was set to expire, the government of India, instead of automatically renewing it, extended it for three months and sat for bargaining. In the end, it was renewed but only days before those three additional months were about to expire as well and only after Nepal agreed to India’s terms.
   

The suspicion with which Indian proposals are viewed in Bangladesh can only be done away with through prudent and generous gestures that would hardly cost an advanced developing country like India but provide much for a least developed country like ours. Transit is, therefore, quite rightly a sensitive issue and Bangladesh should not be asking what it would get in return. It should be the position of Bangladesh that trade and investment regulations in India should first reflect the same, if not better, openness and generosity that Dhaka has already shown. Once trade barriers are at a comparable level offering Bangladesh similar opportunities of business in India should Bangladesh consider providing transit. And in case of transit, it must not be linked with those trade preferences, but with transit for Bangladesh through India to third countries like Nepal or Bhutan. The offer for the transit package for Bangladesh should be such that it has the potential of generating similar revenues and opportunities for Bangladesh in India or in third countries that Indian business would secure by means of transit through Bangladesh.

*Contact: tanimahmed@gmail.com


ERD must act in nation’s interest on climate change

July 24, 2008

Editorial, NewAge, July 24, 2008. Dhaka, Bangladesh

THE tensions over climate change funding between the environment ministry and the Economic Relations Division under the finance ministry have developed as a predictable low-intensity conflict for a while now. New Age reported on Wednesday that the two are now at loggerheads over the division’s willingness to accept climate adaptation funds from foreign governments in the form of loans and the environment ministry’s insistence that much of this funding should come as non-repayable grants. 
   

Over the past two years, as the science and the global politics of climate change have risen in profile, it no longer remains an issue for the scientists and environment bureaucrats; so, in theory, the Economic Relations Division’s involvement is important. In Bangladesh, in the coming decades, climate change is expected to cause a rising intensity and frequency of cyclones and floods, public health crises, agricultural cataclysms and displacement of communities. So, it is the entire spectrum of government agencies and ministries that now need to start understanding climate change and mainstreaming adaptations measures into their relevant policies and decisions. In a similar vein, the Economic Relations Division cannot think itself inherently competent to deal with foreign funds on climate change, just because it has traditionally handled and negotiated the country’s foreign loans and grants. Instead it should look to the government’s position on climate change funding, best known by the environment ministry, for cues on how it should approach foreign donors on this issue. Its failure to do so is sheer incompetence and could also severely damage some of the politically relevant points Bangladesh is making at global climate change negotiations, thus running contrary to national interest.
   

At present Bangladesh’s profile as one of the worst victims of climate change is ascendant. As a past chair, and one of the leaders, of the least developed countries group at UN negotiations, Bangladesh is in a unique position to drive home the point that the countries of the prosperous North, largely responsible for climate change, must compensate the impoverished millions in the third world who are suffering its fallout. At various public forums, Bangladesh has already taken the official position that it is seeking non-repayable grants from the developed world to finance climate change adaptations – be they for building embankments or rehabilitating climate refugees. It is against this backdrop that the Economic Relations Division insists that the country is open to accept loans from the multi-donor climate change trust fund. On this issue, we cannot but question the division’s allegiances, since it is also in the interest of a consortium of multilateral lenders, led by the World Bank, that poor countries avail loans to tackle climate change. In 2007, Bangladesh spent 18 per cent of its total government expenditure on external debt servicing, as opposed to 16.5 per cent on education and 7.4 per cent in health. Surely, the Economic Relations Division understands the implications of further miring the country in such debt. 
   

We urge the Economic Relations Division, therefore, to develop skills and understanding for a more nuanced approach to climate change – one that is in the interests of the country – and till it has done so, to look to the environment ministry, for cues on how to handle this issue. It will be unacceptable if it so happens that the incompetence and lack of awareness of a set of bureaucrats undermines the legitimate claims for compensatory climate change funding that Bangladesh is leading.


Brilliant Plans to Destroy the Planet: The World Bank Tackles Climate Change

July 24, 2008

The World Bank’s new Climate Investment Funds will do nothing to help the climate; they’ll just give the bank more clout.

OP-ED by Janet Redman. IPS, July 11, 2008

President Bush and other leaders of the industrialized world managed to produce a masterfully vague, loophole-ridden statement on climate change at a Group of 8 summit held at a secluded resort on the banks of Lake Toyako in Japan this week.

Meanwhile, thousands of delegates from grassroots movements transformed tranquil Odori Park in downtown Sapporo into the central nervous system of a bottom-up response to ecologically destructive development policies. On the opening day of the G8 summit, activists from every continent joined Japanese environmental and global justice groups in the streets brandishing banners, flags and megaphones. Their message was unambiguous: “Climate Justice, Yes! World Bank, No!”

Their boiled-down slogans were in response to a communiqué released on the second day of the official summit that endorsed the World Bank’s newly created Climate Investment Funds. The $6 billion pledged by the United States, the United Kingdom and Japan to these funds will do nothing to help the climate. Instead, they will give the World Bank an even larger — and completely inappropriate — leadership role on climate change.

Large developing countries, such as China and India, have clearly stated their opposition to climate funds being channeled through the World Bank. More than 130 developing nations issued a statement at climate talks in Germany in June that the United Nations, not the World Bank, should have control of any funds contributed for weathering climate change. If given to the World Bank, they argued, these funds should not count toward countries’ obligations under the international climate change convention. By ignoring their unified position, the G8 support for this expanded World Bank role in climate funding jeopardizes efforts to bring developing countries to the table for a global climate deal.

Also offensive to developing countries is that the World Bank is asking the countries least responsible for causing climate change to take out loans to help pay for adapting to the inevitable impacts. According to the G8 statement, rich country “donations” to the Strategic Climate Fund will count toward those nations’ obligations for development aid, stretching an already pitiful sum impossibly thin.

Piling more debt onto many already heavily indebted nations will mean less money for climate-related disaster preparedness, emergency services and food shortages in the future.

World Bank Climate Hypocrisy

The World Bank’s effort to reinvent itself as the global climate crusader is a dangerous charade. With $2 billion already spent on coal, oil and gas projects this year, the World Bank continues to be among the world’s largest multilateral financiers of greenhouse-gas-emitting projects in the developing world.

The new Climate Investment Funds proposed by the United States and others will house the Clean Technology Fund. Donations from rich countries will ostensibly be used to bring low-carbon technologies to developing countries, and clean energy access to their poorest citizens. But environmental groups have taken to calling the Clean Technology Fund the Slightly Less Dirty Technology Fund because of the bank’s outright support for slightly more efficient coal power.

Predictably, the G8 highlighted its support for market mechanisms, such as carbon trading, as key instruments in fighting climate change. The World Bank has long favored carbon trading. The institution’s zeal for this approach is not surprising: A recent report by the Institute for Policy Studies found that on average, the bank rakes in a 13 percent overhead on the emissions deals it brokers.

The inconvenient truth behind carbon trading is that while companies in industrialized countries continue to pollute at home, they “outsource” their emissions cuts to countries with no caps. In other words, for every incrementally less-polluting coal plant generating carbon credits in a developing country, a dirty coal plant can be built next door. This accounting system may be profitable for carbon brokers like the World Bank, and less costly for Northern polluters, but it does nothing to avert climate disaster.

U.S. Role

Fiery protest in Japan was matched by a chilly reception among some members of the U.S. Congress to the Bush administration’s request for a $2 billion donation to the World Bank’s new funds. Barney Frank, chair of the House Financial Services Committee, pointed out at a recent committee hearing on a U.S. contribution that the “World Bank is not seen as an institution friendly to the environment” and that it seems to “spend one day a month protecting the environment and the other 29 days destroying it.” Still, it’s likely that Congress will authorize the money.

It remains to be seen if U.S. taxpayers can match the vigor of global civil society groups gathered in Japan, or whether they will simply sit back as Congress prepares to throw $2 billion of their money out the window at a time of rising oil prices and economic downturn. People in the developing world hope, this time, they are paying attention.


Climate Change Funds: Bangladesh Environment ministry, ERD at loggerheads

July 23, 2008

Ministry wants funds in grant, ERD wants in loans 

Shahidul Islam Chowdhury, NewAge, July 23, 2008

The environment ministry and the Economic Relations Division are at loggerheads over accepting foreign loans to finance programmes on climate change adaptation.
   

While the division is pushing for loan-based multi-donor trust fund sponsored by the World Bank, the environment ministry is pursuing grant-based bilateral funding from developed countries.
   

‘The Economic Relations Division is trying to sell loan-based funds sponsored by the World Bank to support climate-proof development programmes under a single umbrella and in one kitty,’ said a top official of the finance ministry. ‘But the environment ministry is opposing the division’s plan on the grounds that it contradicts Bangladesh’s stance and the stances of the least developed countries and G-77 in global negotiations on climate change.’
   

‘If the government accepts the foreign loan proposed by the the division and World Bank for adaptation programmes, it will put extra burdens on the national budget,’ he said.
   

‘In addition, Bangladesh will lose face to both the LDCs and the G-77 who are negotiating for all-grant funds to finance adaptation programmes as developed countries are responsible for global warming by emitting too much greenhouse gas and innocent countries like Bangladesh are the victims,’ the official said. ‘We will be singled out in the global negotiations and be blamed by every country.’
   

A section of lending agencies and industrialised countries are pushing the division to accept their proposal to create mainly loan-based trust fund for programmes to adapt to adverse impacts of climate change here, said a senior environment ministry official.
   

When he was asked about the differences between the environment ministry and the division over their stances on loan-based trust fund, the ERD secretary, Aminul Islam Bhuiyan, on July 15 told New Age, ‘It is impractical to depend solely on grants to implement programmes to adapt to the climate change and tackle natural disasters.’
   

‘Bangladesh is a disaster-prone country, and the issues of climate change and disasters and programmes to adapt to the emerging situation are intermingled. Bangladesh, as a country with severe resource constraints, needs huge amounts of fund to implement programmes that include heightening roads and embankments and constructing cyclone shelters. But the bilateral and multilateral donors are not coming up with the necessary grants,’ he said. ‘However, they are ready to provide huge loans to finance adaptation programmes.’
   

Raja Devasish Roy, special assistant to the chief adviser on the ministries of environment and forest and Chittagong Hill Tracts affairs, told New Age on the day, ‘The priority [of the environment ministry] is to create a grant-based trust fund for climate change adaptation programmes.’
   

‘The government has already created a climate change trust fund of Tk 300 crore in the current [2008-09] annual budget to support mainly adaptation programmes,’ he said. ‘We expect the donor countries to also come up with grants for the fund.’
   

‘We are not closing the avenue for loans. We may require loans in the future to implement some components of the climate change adaptation programmes. But our emphasis should not be on loans,’ he said.
   

The Inter-governmental Panel on Climate Change, which was awarded the 2007 Nobel Peace Prize along with former US vice-president Al Gore, has persistently said in its recent reports that climate change has an enormous impact on a range of sectors including agriculture, health and access to water, and the poorest and the island countries, including Bangladesh, will be its biggest victims.
   

The agriculture and water resources adviser, CS Karim, said on the day, ‘It is the moral responsibility of industrialised countries to provide compensation for the victim countries for adaptation to climate change, and the “polluters should pay” Principle should be applied here.’
   

‘We are the prime victims of climate change, yet we do not emit even a low amount of greenhouse gases. Our per capita emission of gases is very little, only about 200kg, which is almost next to nothing when individuals in many societies emit 20 tonnes. So they owe us compensation as we are the prime victims of a crime we did not commit,’ he told New Age earlier.