In Retrospect
Eight months ago, on November 29, 2009 and the eve of the Copenhagen Climate Summit (COP15) I began in this column what I projected then would be an extended series of analyses and commentary on the LCDS; the Agreement between the Government of the Cooperative Republic of Guyana and the Government of the Kingdom of Norway; the accompanying Memorandum of Understanding (MOU) and Joint Concept Note; and, related matters pertaining to the problems created by global warming and climate change. My intention was to approach these matters from the perspective of the interests of poor countries, and in particular poor rainforest ones like Guyana.
At the time I began this series of articles, I never anticipated in my wildest expectations that the issues to be considered under this rubric would extend over as many as thirty-odd consecutive Sunday Stabroek columns. Today, however, I begin consideration of the very last item in this series that I shall deal with, acknowledging that there are still several untreated ones, which readers have been asking me to engage. The last item to be engaged is the provision of global climate funding (aid) for poor countries in the global South 1) to pursue mitigation and adaptation actions to cope with global warming and climate change; and, 2) for poor rainforest ones specifically, to provide environmental services designed to reduce global atmospheric pollution.
I shall limit my discussion to three aspects of this topic. First, I shall consider briefly whether the current global financial and economic situation is supportive to the transfer of climate funding from rich to poor countries. It goes without saying that, global climate funds would be more easily forthcoming the more supportive (that is, prosperous and expanding) and the less hostile is the international economic and financial environment. This therefore, is the logical starting point for my analysis. Second, economic experience suggests that, rightly or wrongly, flows of climate funds from the global North to the global South would be heavily contingent on the quality of governance of environmental resources practised in the global South, and in particular the management of these resources in poor rainforest countries like Guyana. Third, I shall consider whether, also based on experience, pledges by rich countries to provide climate funding (aid) to the global South can reasonably be expected to match their actual delivery of such funding.
Climate Debt
Before I begin to consider this item it is worth re-stating my view that, the overwhelming responsibilities for global warming and climate change remain with the historic polluters ― the rich countries of the global North. Poor developing countries, and especially those richly endowed with rainforest resources (with capability of providing significant global environmental services) are victims of the global North’s misuse and abuse of the earth’s natural resources and its peoples. Yet the negative impacts of global warming and climate change threaten these poor countries to a far greater degree than the rich ones, because they do not have the economic and technological capacity to mitigate and adapt to them.
To take an example close to home, CARICOM is one of the most vulnerable at-risk regions in the world to global climate and environmental catastrophe and it clearly has, on a global scale, minimal capacity to deal with the potentially damaging impacts of global warming and climate change. From this perspective it would be fair to claim that regions like CARICOM and the global South are morally owed a climate debt by the historic polluters. As such they should not be constantly cast in the role of supplicants or beggars for aid from the rich global North.
Financial and Economic Situation
Even to the most casual observer the current global financial and economic situation is hardly conducive, if not downright hostile, to a sustained flow of climate funds from the public and private sectors of the rich countries to the poor ones. Why is this so? The answer depends on a host of important considerations. First, by all accounts, beginning in the third quarter of 2007, the global economy has suffered the worst economic recession since the Great Depression of the 1930s.
Accompanying this, there has been a financial crisis of such gravity that, at its peak, it was believed by many governments in rich and poor countries alike, there was a dire risk of collapse of the international financial system. As readers of this column would know, this crisis was centred on the bursting of the United States “housing bubble”, which revealed an enormous pile of highly toxic private household mortgage-backed derivative securities located there.
The effects of this included a dramatic decline in household wealth; a credit crunch and freeze on bank lending; panic and contagion on financial and stock markets; and, a dramatic reduction in public confidence and trust in economic and financial institutions and Authorities.
It would be no exaggeration to claim that at its peak (the third quarter of 2008) the downward spiral threatened the systemic collapse of all the world’s major financial institutions.
Secondly, while at the moment the worst of the economic recession and financial crisis appears to be behind the global economy, full economic recovery and a return to a sustained upward growth and employment paths remains uncertain. There is presently a wide-ranging global debate about the prospects for the near to medium-term future.
Opinions range from those who label the present situation as showing classic signs of a faltering but eventual recovery, to those who have an outright expectation that the global economy is headed towards a “double-dip” recession.
Such an uncertain economic atmosphere is hardly conducive to new initiatives for private investment, particularly in areas investors consider as un-tested and un-proven, like providing environmental services to global markets! Indeed, the business outlook is so bleak that one cannot depend on the sustained flow of private climate-related investments from rich countries to poor ones.
In similar vein, it would be reckless to expect a sustained flow out of public sector resources.
This is simply because with incomes not growing significantly, government revenues are under pressure. Taxes to finance climate transfers cannot be introduced.
Next week I shall continue the discussion from this point and then turn to the second aspect of the problem: “governance of rainforest resources”.
