Agreement of People website

Sign here if you support the campaign for a real democracy

Our blogs


AWTW FacebookAWTW Twitter

Your Say



Corporations cash in on climate change funds

As governments meet in Doha to discuss the transfer of funds from rich to poor countries to help them adapt to climate change, the developing world is asking both “where’s the money” and who is benefiting from the small amount allocated so far.

A Fast-start Fund (FSF) of £30bn was to be completed by December 2012, and then another £100bn by 2020. Now it’s clear that there will be no commitment to any further funding on the table this week.

The US, EU, Canada and Japan have made clear they will not say how or when they will commit to further funding. EU representative Peter Betts said they would not agree any targets: "These are tough financial times in Europe, as I'm sure you have noticed."

Jonathan Pershing from the US asked for trust: “The question really is did we do the first one and the answer is yes. Are we working on the second? The answer is yes." But given that the Obama administration’s total climate aid for this year was just £1.7bn, that trust is not likely to be translated into action.

The FSF replacement Green Climate Fund has a completely empty bank account. In any case, as Al Gore pointed out, the FSF money had mostly been moved around from existing aid commitments, and whereas grants were promised, they were actually mostly given out as loans with strings.

Much of it was handed out directly to corporations to do projects. The World Development Movement reports that UK climate finance (channelled through the World Bank) has been used to fund wind farms in Oaxaca, Mexico, which are controlled by French electricity giant EDF.

All of the energy produced is being used to provide cheap power to Walmart, and none is going to local people. The wind farms have been built on indigenous people’s land without their consent.

The EDF/Walmart involvement highlighted by WDM is not an aberration – it entirely represents the World Bank’s view on how to use climate mitigation funds. A recent report for the WB stated:

The large potential for private investment to achieve climate-related objectives justifies using a substantial share of the public funding available in and before 2020 to stimulate this investment…

Not all public funding will be used to stimulate private investment, but all else equal, channelling public funding through instruments that catalyze additional international private investment in a given action yields greater benefits than using the public funding directly for the same type of action.

Over the period between now and 2020, public instruments will need to have the flexibility to respond to various dynamic factors such as emerging domestic climate policies in developing countries, and the expected scaling up of carbon markets.

Translated into English that last paragraph means that developing country governments can decide to use climate change money for all sorts of policies – to leverage in land-grabbing investment funds; to switch to GM crops; to earn carbon credits from bio-fuel crops or indeed to generate power for Walmart.

The problem is that the Bank is not wrong in thinking that the only way to get things to happen quickly in today’s world is to get the global corporations on board. They have the know-how, the infrastructure, and the drive to do new things. What they don’t have is any real interest in mitigating climate change – profit is their only game and so the money will serve that end only.

Any tangential benefits, for example small reductions in greenhouse gas emissions, will be more than offset by their continuing rapacity everywhere they operate to resource, produce, distribute and sell goods.
A transformation of ownership and control of these corporations, as collectively owned democratic co-operatives, could change all that. Then the skills, knowledge and resources of what are after all the world’s biggest and most dynamic organisations, could be harnessed to tackle climate change and improve the lives of millions.

Penny Cole
Environment editor
6 December 2012

Bookmark and Share

Comments now closed

We do not store your name or email details, but may inform you if someone responds to your comment.

If you want weekly update messages please indicate and we will store your details in a secure database which is not shared with any other organisation.

Your name

Your E-mail
(we will not publish your E-mail)

Do you want Updates?

Anti-spam validation:compare< Please enter these letters>

Note: To counter spammers, all comments are moderated.