Boris Johnson’s government must take the lead in giving poor countries access to the finance they need to tackle the climate crisis, to make vital climate talks a success, the UN’s development chief has said.
Ministers from around the world will meet virtually this week at a conference hosted by the UK to discuss the needs of developing nations struggling to cut their greenhouse gas emissions, as their economies have been left reeling by the Covid pandemic.
The UK will need the support of more than 130 developing countries to make a success of the Cop26 UN climate summit, to be hosted in Glasgow this November. But relationships with poor nations have been hit by the government’s decision to slash overseas aid by billions of pounds.
Achim Steiner, the administrator of the UN Development Programme (UNDP), urged governments to show the same will to tackle climate breakdown as they were showing with the recovery from the pandemic. He said: “We need to arrive at a mindset like the Marshall plan, a bigger vision that we need to recover [from Covid-19] together, a new investment paradigm for a global economy, not an aid or charity paradigm.”
Helping developing countries invest would reduce global emissions and benefit all countries, said Steiner. “What will be critical [at Cop26] is to find a way to finance the acceleration of climate action and higher ambition on emissions. This must be a collective effort, a joint undertaking,” he told the Guardian in an interview.
Cop26 comes at a crucial time, as developing countries face key decisions on how to help their economies recover from the Covid crisis. Many are under pressure to continue with fossil fuels, but investments now in coal, oil or other high-carbon infrastructure will lock in high emissions for decades to come.
“It is not in the interests of industrialised countries to wait another year [to assist investment],” Steiner said. “Global climate action is dependent on being able to solve the financial challenges and fiscal dilemma [over investing in fossil fuels or clean energy] that countries will be confronted with at Glasgow.”
The UK’s decision to cut overseas aid from 0.7% of GDP to 0.5% a year will not directly affect its spending on climate finance, which has been ringfenced at £11.6bn from 2021 to 2025. However, many in the climate talks are concerned that it will provide cover for other rich nations to cut spending ahead of Cop26.
Steiner said: “It sends a very mixed signal, and makes developing countries very concerned. It certainly does not enhance the confidence with which developing countries come to the table.”
Poor countries are already concerned that a longstanding promise, made in 2009, that rich countries would ensure flows of $100bn (£72bn) a year to the developing world by 2020, to help countries cut emissions and cope with the impacts of climate breakdown, have not been met. The UN secretary general, António Guterres, told the Guardian in December that having a credible plan to meet this target would be essential to agreement at Cop26.
Steiner also wants to see the UK spearhead innovative ways for poor countries to cope with their debt mountain, and raise capital for investment, for instance through “green” bonds.
Help from rich countries is needed because the cost of capital to poor countries is so high: a 10-year Kenyan government bond trades at a yield of 12.6% compared with 1.6% for the US, with other countries showing similar or higher rates. “The harsh reality is that the cost of borrowing is so prohibitively higher for a developing country,” said Steiner.
Debt repayment costs are also crippling developing economies. The World Bank recently estimated that 2.5% of this year’s debt service payments for poor countries, amounting to about $28bn, would be enough to vaccinate 2 billion people in the poor world.
The UN is pushing for debt suspension or forgiveness for some of the worst-hit economies. Forthcoming research by the UNDP has found that 72 vulnerable countries are facing $600bn in debt service payments from 2021 to 2025. Of these, 23 countries with $387bn in debt payments owed are not covered by existing debt relief programmes.
“The debt issue is constraining them,” said Steiner. “We are asking a lot from developing countries [at Cop26] that are under great debt distress, when their cost of borrowing is so much higher than industrialised countries.”
Separately, green campaigners have written to the UK government ahead of this week’s ministerial meeting to call for the overseas aid budget to be restored, warning that failure to do so would undermine the UK’s credibility as hosts of Cop26.
Amanda Khozi Mukwashi, the chief executive of Christian Aid, said: “In the year of Cop26, as host and significant emitter, all eyes are on the UK to lead the world in stepping up ambition on climate action. Vulnerable countries on the frontline of a climate emergency they did not cause need financial support. If the UK is to deliver a successful climate summit, then this week’s meeting must restore the much-needed aid, ensure that debts are cancelled, and commit the finance needed to help poorer nations adapt to a changing climate.”
Courtesy: The Guardian