World’s Richest Countries Are Cheating Poor Ones
As nations moved forward from the Paris Agreement, there was an assumption, and, in some cases, a promise, that the world’s rich nations would provide the world’s poor nations with capital to improve their green footprints. Part of those programs were grants, which means that the poor countries would not have to borrow and affect what were probably already battered balance sheets with low credit ratings.
The world’s richest nations have taken a largely different path. They have provided that money as loans, many of which have high interest rates. That undermines the poor nations’ balance sheets even more.
Oxfam has studied this process. “New research by Oxfam and CARE Climate Justice Center, published today, finds developing countries are now paying more back to wealthy nations for climate finance loans than they receive- for every 5 dollars they receive they are paying 7 dollars back. 65% of funding is delivered in the form of loans.”
Two-thirds of the money provided was loans. The interest rates in increasing the sums owed, which further hurts the balance sheet. Oxfam identifies France, Japan, and India as the worst offenders. “Rich countries are treating the climate crisis as a business opportunity, not a moral obligation,” said Oxfam’s Climate Policy Lead, Nafkote Dabi.
Oxfam’s proposal is that the $600 billion that was supposed to be transferred from rich to poor between 2020 and 2025 be paid now, and the promised annual contributions of $300 billion be made thereafter.
The challenge is that none of the agreements can be enforced so that the loan programs could continue.
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