Rich world cheated poor countries of $30 billion climate funds

A report released on the eve of climate change talks in Doha has suggested that rich countries have largely cheated the developing nations of the $30 billion funds they had committed to transfer to the poor ones between 2010 and 2012.

The fund has largely been a green-wash - recycling and renaming existing funding as 'climate funding' and giving loans instead of grants, the report said.

The developed world in 2009 had promised to fast-track funding of $30 billion between 2010-2012 and an annual transfer of $100 billion starting 2020. The money was not aid or a loan. It was reparation for having contributed largely to climate change.

It was meant to go to the poorest countries to help adapt to the inevitable climate change. The funds were supposed to be new and in addition to the overseas development aid (ODA) money that the rich world already gives. It was supposed to be largely for adaptation and with flexibility for the poor countries to use based on their priorities.

Research by Oxfam now suggests the developed countries have deceived the world and largely given loans or recycled existing promises as part of the ODA commitments as contribution to the fast-track funds.

Only one-third the total funding provided till date appears to be new money and only 24% of it was in addition to existing aid commitments. Only 43% of this went as grants, the rest were given as loans on which the developed countries will actually earn interest. A mere 21% of this was spent on adaptation to climate change.

Oxfam said while releasing the report, "It reveals that many of the contributions so far are more of a 'false start' than a fast start. Developed countries have yet to make any concrete financial commitments for the period 2013 to 2020. Oxfam's research suggests that levels of public climate finance are set to fall in 2013 compared to the past three years. At the very moment that finance must be scaled up to meet the $100 billion per year Copenhagen promise, rich countries look set to scale down."

The Doha talks starting on Monday are expected to see developing countries demand more accountability and clarity from the developed world on how they shall upscale their promised funds. The rich world is keen to let private investments largely be the solution but the developing countries want public funds as the central source, helping attract private investments in clean energy and adaptation. But the continued fiscal ill-health of the developed countries has become an excuse used often to evade obligations.