‘Climate finance’ saddles Pacific island nations with more debt
As this year’s UN climate summit reaches its final stage of negotiations, Pacific scholars are calling on world leaders to improve the dispersal system of climate finance to support people living in small island nations.
Last week, we presented the Conference of the Parties (COP29) with a report from the largest Pacific climate adaptation study. The Pacific Ocean Climate Crisis Assessment (POCCA) amplifies voices of people with lived experience. It collates data and case studies about climate impacts island nations are already facing and local adaptation strategies they are already practising.
The report shows that climate finance has been mainstreamed into global financial structures that follow the same patterns as development aid.
This means the main global financial institutions, including the World Bank and the International Monetary Fund, become the “accredited” institutions involved in dispersing funds, adding loan components and making direct access difficult for Pacific nations.
Loading recipient countries with more debt
As a result, some 72% of the money is in the form of loans by the time it reaches people on the ground. The real beneficiaries are private contractors in developed countries who are brought in to build climate-resilient infrastructure.
What may have started off as a humanitarian gesture has ended up loading recipient countries in the Global South, particularly in the Pacific, with more debt.
Recent research shows extreme weather is already costing vulnerable island nations US$141 billion each year. Estimates suggest this will rise to $1 trillion annually by 2030.
Climate finance is an essential point of negotiation at COP29, with the goal of increasing the contributions by wealthy countries.
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