'The Donors’ Dilemma' - Climate Change and the Future of Aid

This column by David Ritter and Jessica Panegyres is part of Global Policy’s e-book, ‘The Donors’ Dilemma: Emergence, Convergence and the Future of Aid’, edited by Andy Sumner. Contributions from academics and practitioners will be serialised on Global Policy until the e-book’s release in the first quarter of 2014. Find out more here or join the debate on Twitter #GPfutureofaid.

Climate change is a critical factor in the future of aid. The InterGovernmental Panel on Climate Change (IPCC) predicts that a changing climate will bring more drought, extreme weather events, and rising sea levels, impacting on food production, water availability, and the frequency of natural disasters. This chapter will sketch out some of the interstices between climate change and aid, emphasizing that it is essential to mitigate carbon emissions if we care about alleviating poverty. The need to both mitigate climate change and to provide adaptation assistance to those worst affected is accepted by all states party to the United Nations Framework Convention on Climate Change (UNFCCC) but policy commitments have failed to match the rhetoric.

There is a high degree of consensus among scientists and aid practitioners that climate change is already affecting the poor and vulnerable within most societies, with the worst effects occurring in the horn of Africa, other Least Developed States and low-lying island nations. In short, climate change is creating more people that need humanitarian assistance, which aid group Oxfam worries will compromise the global ability to meet the Millennium Development goals. Poverty reduction is, long-term, inseparably linked to climate stability. The basic challenge, as Kumi Naidoo, the global head of Greenpeace, has stated, is ‘to deliver decent lives for all within the ecological boundaries the planet sets for us.’

In theory, the infrastructure exists for the world to act to tackle both climate change and poverty. We are seeing a lot more climate change aid and assistance, and the development of climate aid infrastructure by organisations like the United Nations Development Program, the Red Cross, and the UNHCR. Developed nations have promised billions in climate finance to developing countries through the Green Climate Fund, for those countries to purse sustainable development pathways, rather than treading the dangerous high-carbon path taken by developed nations. According to the UNFCCC, climate finance is supposed to be ‘above and beyond any financial assistance’ that donors already provide to recipient countries. It may be viewed as the ‘carrot’ proffered to induce developing countries to make emissions reductions, when those countries’ leaders argue – with justification - that they are historically not responsible for current carbon dioxide-equivalent (CO2-e) concentrations.

Viewed through a carrot-tinted lens, climate finance is more ‘self-help’ than ‘foreign aid.’ Runaway climate change will ultimately affect all of us, regardless of national boundaries: developed and developing countries are bound together in a grim community of fate. However, the lines between aid, development assistance, and the pursuit of national interest have never been particularly clear, and climate finance blurs them further. Yet there is currently no global deal to reduce emissions, the Green Climate Fund is largely empty, and new climate finance dropped by more than two-thirds from 2012 to 2013 according to the UK based Overseas Development Institute. All eyes are on Paris 2015.

Of course, it is not that the requisite money is not available. It could be easily raised by, for example, removing fossil fuel subsidies as members of the G20 have promised to do, or through implementing a Financial Transactions Tax. That is quite aside from the funds that would be released if companies were required to pay for the social and environmental cost of their emissions.

The gap between national policies to tackle climate change and poverty, on the one hand, and the rhetoric of necessary action, on the other, is illustrated by recent decisions by the Australian government. The government officially accepts that, ‘(l)imiting emissions is crucial to avoid some of the most adverse impacts of climate change, which will disproportionally affect the most vulnerable members in the poorest communities’. At the same time, it gained notoriety for ‘wrecking’ the Warsaw climate negotiations, including by refusing to support the Green Climate fund. Although there is some lack of clarity, it appears that the current Australian government has also cut all funding for global environmental programs. As part of an overall slashing of $4.5 billion from the total foreign aid budget, the government appears to be withdrawing its aid for mitigation (through deforestation assistance) and adaptation (in the form of crop diversification programs). These actions are particularly disappointing given Australia’s wealth and economic stability and also seem especially self-defeating in rational terms, given the nation’s well-documented vulnerability to climate change.

If the world cannot reach agreement on the necessary emissions reductions and related climate finance, it will arguably make more optimistic scenarios for the future of aid – including those mentioned in this series - redundant. What does aid look like in a four to six degree world or worse? Assumptions that many developing countries will become middle-income may be rendered unfathomably optimistic under conditions of climate chaos. Scarcity of water and food will doubtless shrink national resources, making conflict seem more – rather than less – likely and with the added prospect of enormous numbers of climate ‘refugees’. In such a context will donor countries increasingly focus on assisting their own populations with the effects of a changed climate, and therefore shrink their foreign aid budgets? Will foreign aid be absorbed by emergency relief rather than development assistance, as the non-linear effects of climate change provoke a chain of natural disasters? Will a more chaotic world lead to new politics of isolationism and insularity?

In order to avoid such nightmarish scenarios, the priorities for developed nations are clear. Country emissions must be cut in line with what is needed to keep global warming within 2 degrees above pre-industrial levels. This includes the finance needed to assist countries to pursue paths of sustainable development. Aid should be provided to assist people worst affected by a changing climate. This does not just mean disaster relief; aid should be provided to develop resilience to climate variation. Countries that are not currently meeting their 0.7 per cent GDP target for aid should do so. This may sound obvious, but Western countries have long dodged their aid and development obligations. What climate change now adds is a clear self-interested imperative for nations to come through or risk the consequences.

Policy recommendations

Cut global greenhouse gas emissions in order to keep global temperature rise within 2 degrees above pre-industrial levels.
Secure a binding international agreement to limit greenhouse gas emissions at the 21st session of the Conference of Parties to the United Nations Framework Convention on Climate Change (UNFCCC) in Paris in 2015.
Meet the Millennium Development target of committing 0.7 percent of national Gross Domestic Product (GDP) to aid.
Honour commitments made to provide climate finance to developing countries.
Support adaptation – climate resilient sustainable development - in recipient nations

David Ritter is the Chief Executive Officer of Greenpeace Australia Pacific, an Honorary Fellow of the Faculty of Law of the University of Western Australia and an Associate of the Institute for Democracy and Human Rights at the University of Sydney. Jessica Panegyres holds First Class Honors degrees in Law and Politics from the University of Western Australia, an MPhil in Political Theory from the University of Oxford and is a Policy Adviser at Greenpeace Australia Pacific.