Climate cheating

Source: Agenda Global

In international negotiations on climate change, where “the sums at stake are huge and the ones who are cheated are the poor”, the countries of the industrial North are using resources that appear as a slavish imitation of picaresque literature “to fool negotiators of the South”, wrote Roberto Bissio, Social Watch coordinator, in his last article for Agenda Global.

Climate: tricky accounting
By Roberto Bissio

From the Spanish picaresque of "Lazarillo de Tormes" in the 16th century to the adorable girl played by Tatum O’Neill in the film “Paper Moon” (1973), literature and cinema have always been congenial with the rogue who plays tricks when counting money in order to get hold of the leftovers... provided the one being cheated on is rich, the swindler is poor and the sums at stake are unimportant.

When it comes to climate change, the world’s most powerful countries are behaving just like those rogues, but the sums at stake are huge and it is the poor that are being cheated.

A pamphlet listing “tips” to fool negotiators of the South was handed out by NGO activists in the lobby of the Hotel Maritim, where diplomats and experts from all over the world gathered last week to prepare the next summit on climate change in Durban.

First, count the already disbursed development aid as a contribution to mitigate the effects of climate change, then you add the total amount of loans – not just their “soft” component (below-market interest rates) – also as a contribution, forgetting that loans will have to be reimbursed, add then the amount of announcements already made in previous conferences as if they were newly-made, include the amount your country would have to spend anyway to mitigate the effects of climate change as if it were aid to the poorest countries, calculate the amount of money mobilized by private sources in poor countries, but handled through institutions based in the North, as if it was a contribution made by rich countries, then generate new funds under new names with already existing funds, mix gently... and the result is that the industrialized countries, the originators of the climate disaster by means of their accumulation of gas emissions since the inception of the industrial revolution, announce in the old Western German capital that they have fulfilled their commitments, when they have in fact only mobilized $5 billion of the $30 billion they had pledged in Copenhagen in 2009 and reaffirmed in Cancun last year.

To make matters worse, $30 billion are not enough. Hillary Clinton herself had announced in Copenhagen that $100 billion a year –i.e. a doubling of the current amount of development assistance– would be transferred from the North to the South each year before the end of the decade. And British Nicholas Stern, former chief economist of the World Bank and former advisor to premier Gordon Brown, has just revised up his 2006 estimates and says now that in order to avoid the worst effects of climate change the world must invest some $600 billion per year, that is, two per cent of global GDP. Losses due to hurricanes, droughts, floods and other catastrophes are already larger than expected and the number of people displaced from their homes in 2010 as a result of climate change-related phenomena is estimated at over 40 million.

Where will all that money come from? After having mobilized much larger sums to rescue bankrupt banks following the 2008 crisis, the richest countries – which are also the ones that have caused the problem – now say that there is no money for climate. The United States, Canada and Japan have refused to discuss finance sources and amounts while, on the other hand, they demand that the World Bank should be the manager of climate monies. This may explain the ongoing rumours about Hillary Clinton’s eagerness to become the first female president of the World Bank once Robert Zoellick leaves his position in 2012.

But, if we know that the richest countries are facing a debt crisis and we also acknowledge that the mechanism to create a carbon market where licenses to contaminate are being purchased and sold has not been successful, where may all that money come from?

In the first place, a tiny tax on financial transactions – an idea that has been supported by Christine Lagarde, the French Finance Minister and candidate to head the IMF – may bring about $650 billion a year right away.

The IMF, for its part, could issue Special Drawing Rights (SDRs) as it did in 2009. Of the $250 billion issued then to mitigate the crisis, $165 billion were allocated to rich countries, which in fact did not need them and could have well transferred them to poor countries, at no cost for their contributors.

Industrialized countries, starting with the United States, spend between $57 and $100 billion each year in subsidies for the oil industry. If this money was used to fund renewable energies in developing countries not only would they comply with their obligation, but they would also help to solve the underlying problem.

And finally, the world wasted $1.6 trillion in 2010 in military spending. Re-channeling part of this money to mitigate climate devastation would not increase insecurity. Quite to the contrary, US high ranking army officers and admirals have gone public stating that “climate change is making the world a more dangerous place”.