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Climate & Energy Editor
Climate & Energy Editor
Oxfam Novib said in a report that rich countries are paying poor countries enough to face the consequences of climate change. According to the organization, the countries are thus ignoring an agreement that was reached more than ten years ago at the global level. Money received by poor countries in the form of loans is often given instead of gifts and there is also discussion on this topic.
Thirteen years ago, rich nations pledged $100 billion annually in climate finance from 2020 onwards. The failure to achieve this goal is an important point of discussion at the upcoming World Climate Conference in Egypt next month. Officially, more than $83 billion became available in 2020, I mentioned recently OECD (Organization for Economic Co-operation and Development).
Part of this was provided by governments in the form of export credits and corporate investments. According to Oxfam Novib, the amount mentioned in this regard (more than 68 billion dollars) is incorrect. Oxfam says if you look at the true value of those commitments, it’s between $21 and more than $24 billion. The rest are not gifts, but loans.
“Loans only count”
But according to Peter Bao of Eindhoven University of Technology, an expert on climate finance, it was agreed that loans matter, too. “At the Poland Climate Summit 2018, it was made sure that loans are also allowed and that you can include them in full,” he explains. “Loan is wise wherever possible, because then the money can be reissued after repayment.”
As far as it is concerned, this is especially true of investments in renewable energy in less poor developing countries. Climate expert Bertram Zajima of Oxfam Novib says Oxfam is by definition not against loans. But really poor countries can’t repay the loans, and so they go deeper into debt. According to Oxfam, it is also important that government money goes to poor countries in particular. They have to adapt to the consequences of climate change and it is difficult to find a revenue model for companies.
“Look at Pakistan now. There was a lot of rain, which has to do with climate change. And because the country has not prepared enough for the amount of rain that can fall today, the water stays for a long time. So, this country will have better drainage. You can’t earn Money from that, it costs money in particular,” says Zajima.
Bao says that the fact that the hundred billion is not made, regardless of the discussion about gifts or loans, is a bad thing. “It stresses trust between rich and poor countries and reduces the chances of success at the upcoming climate summit in Sharm el-Sheikh.” This also hinders discussions about reducing carbon dioxide emissions.
The current agreement on climate finance is valid for the years 2020-2025. It was agreed in the Paris Climate Agreement that a new and even higher target for climate finance should be set by 2025. Negotiations on this will take place at the upcoming summit in Sharm El Sheikh.
By the way, the Netherlands has recently increased its contribution to climate assistance. The government wants to spend 900 million euros on public climate finance by 2025. The government will also try to boost investment by companies. Together, the Dutch contribution could reach 1.8 billion euros in 2025. Part of this money comes from the budget of the Ministry of Development Cooperation.
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