Nick Dearden, Director Jubilee Debt Campaign
‘Climate debt’ questions a global free market system which has pushed many developing countries into high carbon pathways that they now need to find a way out of.
Through enormous debt burdens, through aid and lending and through trade rules, rich countries and their spokesmen in the IMF and World Bank have forced policies on developing countries which have created carbon addiction. These policies have led to more oil and coal being dug up, more trees being chopped down, more food being grown on massive farms to export to the West, more dependency on fossil fuels for electricity needs.
>>Indonesia (...) liberalised investment regulations, allowing foreign companies to become key players in the destruction of forests and export of timber.
Meanwhile, Nicaragua faced demands to privatise its electricity sector as a condition of receiving debt relief from the IMF and World Bank. Short-term this actually reduced Nicaragua’s carbon emissions – in the most regressive way possible – by increasing the average electricity bill by 100-400% and pricing the poor out of the market. But long-term it has increased the country’s fossil fuel addiction, because private companies are far less likely to put in the investment needed to create a renewable energy base.
Since the mid-1990s, the proportion of Nicaragua’s electricity coming from oil has increased from 55% to over 70%, while electricity from renewables has fallen. In contrast, Nicaragua’s neighbour Costa Rica has maintained a public, not-for-profit electricity system and the country gets 94% of its electricity from renewable sources.
Likewise, Ecuador has massively extended its oil production over the last 20 years, with the IMF seeing oil as a key way of Ecuador repaying its mountain of debt, itself based on loans irresponsibly lent to its military junta in the 1970s. This oil has done little for Ecuador – the IMF demanded 70% of oil revenues be earmarked for debt servicing, and no more than 10% for social spending. When current President Correa increased the proportion flowing into the social sector IMF loans were cancelled.
The examples go on, adding to the rich world’s ‘climate debt’, which we need to pay to enable developing countries to rid themselves of poverty, but in a less carbon-intensive way then we did. (...)
But the rich world fails to understand that climate change will not be solved by throwing a few loans the way of the starving and destitute. Indeed their solution is an avalanche of new loans to developing countries who are already repaying debts at a rate of 5 times what they receive in aid every year. (...)
Of course the concept of climate debt scares many – the same vested interests referred to earlier. (...) Certainly it implies fundamental changes in the global economy, radical redistribution of the world’s resources.
But the alternative is not ‘merely’ the continuation of gross inequality and shameful levels of poverty in a world rich in resources. It is the ability of all of us to inhabit our planet.