Cole: Developed countries mobilize climate aid, complexities loom
Climate change is a human-induced, environmental force that disproportionately impacts developing countries that have little responsibility for its existence.
The 2015 climate change conference in Paris will attempt to finalize developed countries’ commitment of providing $100 billion per year in climate finance to developing countries by 2020. Although this effort can be seen as positive, the politics of foreign aid oftentimes diminishes its actual effectiveness, and can potentially harm developing nations long-term.
Aid operations, historically, stem from colonial roots. Between 1940-1960, European colonizers’ physical presence slowly dissipated, replaced by international organizations meant to improve governance from afar, predominantly through financing. While supranational institutions including the World Bank, International Monetary Fund and United Nations certainly do a lot of good, it is appropriate to be wary of their power and its potential for abuse.
Countries receiving loans often have a hard time paying the money back. In this, and most similar situations, the receiving countries prefer grants, while the lenders prefer loans.
“Interest rates on development loans vary depending on how they are structured, conditionalities attached, and the institutions involved,” said Farhana Sultana, an associate professor of geography at Syracuse University. “However, development aid compounds over time and often cripples the ability of a country to repay its original debt because the interest has become considerably larger than the original principal amount of the debt.”
Sultana continued, “In many instances historically, countries have actually repaid the debt many times over but the interest keeps them in what is called the debt trap.
Debt traps render forward progress for the recipients futile and result in only one positive: the profit margins of those already in power. The details for the yearly $100 billion in climate relief are still unknown. This is something worth keeping an eye on, and, when released, must be analyzed critically.
In the context of the 2015 climate summit, understanding the basics of development studies is imperative. Scholarship of development studies is rife with debate, but one argument is particularly difficult to ignore. This is that, without an intersectional understanding of the social and political nuances and complexities of an area, any monetary aid will fall short of its potential to help, and may maintain existing unjust structures of power.
“There’s a difference between allocating and using development aid on paper and actually doing so in meaningful and useful ways that help people,” Sultana explained.
For example, poor countries need financial resources to protect themselves against worsening, severe weather, but foreign capital tends to favor funding potentially profitable renewable energy deals. This is an instance of top-down aid policies which look impressive at face value, but when analyzed through a critical lens, are more about benefiting the donors than those in need of assistance.
There are currently no concrete answers as to how this $100 billion in aid will be implemented. In a little over a month, this should change and, when it does, it will be vital to review carefully. Interest rates, conditionalities and means for participatory inclusion are three important areas to keep an eye on.
So yes, $100 billion per year in climate finance sounds great, but its grandiose must not distract from its accompanying complexities, which, if developed countries are serious about making amends for the predicament they’ve put the rest of the world in, must be understood and acted upon intersectionally.
Azor Cole is a senior public relations major and geography minor. His column appears weekly. He can be reached at email@example.com and followed on Twitter @azor_cole.
Published on October 15, 2015 at 12:51 am