Debt burden fuelling climate change – ‘double injustice’

Practical Action, World Development Movement and WWF, 13 July 2007, Jubilee Debt Campaign

New figures released today by Jubilee Debt Campaign reveal that rich countries owe 27 times more in ‘carbon debt’ than poor countries pay in debt repayments to wealthy nations.

The world’s poorest countries are forced to repay over $100 million daily in often illegitimate debts to rich countries, those same rich countries produce a daily ‘carbon debt’ worth an estimated $2.7 billion per day, which remains unacknowledged, unpaid and hits the poorest countries hardest and first.

The briefing, produced jointly with World Development Movement, Practical Action and WWF highlights that unlike the richest countries, poor countries are currently in ‘carbon credit’. But the unjust and unpayable financial debt is increasingly forcing poor countries into environmentally destructive practices that drive climate change and deprive poor countries of the resources they need to adapt to the rapidly changing climate. The real cost of the ‘carbon debt’ in terms of lives and livelihoods lost is impossible to quantify in financial terms, but for the first time these figures show clearly the debt owed by the rich to the poor.

Benedict Southworth, Director of World Development Movement said:

“The rich world bears a heavy responsibility for creating the twin crises of unpayable debts and looming climate chaos. The impact of these crises include starvation, migration, disease and death. It is crucial that the governments of the richest countries take urgent action to cancel illegitimate debt and reduce their carbon emissions.”

Trisha Rogers, Director of Jubilee Debt Campaign said:

“It is poor countries and poor people who are paying with their lives. We need radically to rethink our perception of who is in debt to whom, and take urgent action to tackle this double injustice.”

The research revealed that:

• Rich countries owe poor countries an enormous ‘carbon debt’ – on the basis of per capita carbon emissions beyond a global ‘fair share’. The rich world owes an estimated annual carbon debt of more than $1 trillion – nearly $870 billion of it coming from G8 countries.
• Poor country debt burdens are contributing to climate change and wider environmental destruction by driving the depletion of natural resources through deforestation, oil and gas extraction, mining, and intensification of agriculture.
• Countries like Kenya and Bangladesh are being denied debt cancellation on the basis that their debt is considered ‘sustainable’. Meanwhile, they are already experiencing the frontline effects of climate change, such as desertification or flooding.
• Developing countries need an estimated $50 billion every year to adapt to climate change but the poorest countries are still making debt repayments of $43 billion a year.