Climate Debt Denial

Climate Debt Denial

The brunt of the impact of climate change will be borne by some of the poorest populations in the world. Is there a way to make rich nations pay climate debts to developing countries that have already felt the effects of climate change?

Art by Roger Peet

At the height of the Washington feeding frenzy about the fiscal cliff, the debt ceiling, and sequestration, austerity hawks coined a new label to denigrate lawmakers who were opposed to cutbacks brought on by the cynical manipulation of national debt: “debt deniers.” It was a savvy way of turning the tables on those who had gotten traction out of depicting the GOP as hopelessly afflicted by “climate denial.” Not that there was any real equivalence between the two charges. After all, economics, unlike climatology, is not a science, and there is nothing approaching a consensus about the fiscal wisdom of running large government debts, especially if they are U.S. debts, backed by the still almighty dollar. Indeed, the phrase “debt denial” was cooked up by Fix the Debt, a lavish, CEO-backed campaign to lobby Congress to slice Social Security, Medicare, and Medicaid and funnel more tax breaks to corporations. Many of the firms that contribute to Fix the Debt’s war chest don’t pay their own debts, let alone taxes, but they are still eager to squeeze the country’s most vulnerable populations.

Missing from the jousting on Capitol Hill was any mention of climate debt, yet there was plenty of evidence of its unwanted presence. Climate debt, which is financially complex but morally simple, is not yet part of the political lexicon in the United States. Indeed, denial about it runs high, even among those who readily accept the consensus about the grievous threat posed by climate change.

This past year finally saw the climate change threat acknowledged by the world’s leading international finance institutions. Speaking at the World Economic Forum in Davos, International Monetary Fund director Christine Lagarde described climate change as “the greatest economic challenge of the twenty-first century” and made a pitch for “green growth.” Commenting on the release of the World Bank’s devastating report, Turn Down the Heat president Jim Yong Kim urged that “a 4°C warmer world can, and must be, avoided—we need to hold warming below 2°C.”

In addition, both the IMF and the World Bank have acknowledged that the brunt of the impact will be borne by some of the poorest populations in the world, further jeopardizing their prospects for sustainable development. But neither institution has encouraged, let alone pressed, rich nations to pay climate debts to developing countries that have already felt the effects of climate change. Given their long history of delivering global South countries into debt traps, condemned to service compound-interest loans until eternity, it may be asking too much for the IMF or the World Bank to pay much attention when the creditor-debtor relationship is reversed, as it is under the terms of climate debt. “Denial” may be a weak characterization of the structural resistance at work here, but there is also no question that the disinclination to repay climate debts extends far beyond the (understandably) resistant kingpins of finance.

The debt trap has been a familiar outcome of neoliberal policies such as structural adjustment since the 1970s, but it also builds directly on patterns established through centuries of colonial extraction. The debt payments imposed by the French government on Haiti, from 1825 to 1947, as compensation for slave owners’ lost “property” are the most visible illustration of how debt service is administered as a punishment and an instrument of control. The more predatory approach to sovereign debts flourishes today in the legal leeway granted to vulture funds (most notably, Donegal International, Elliott Management, and FG Hemisphere) to buy up the distressed debt of defaulted countries at sharply reduced prices on the secondary market and then sue to collect the original amount.

Were the South’s claims as an eco-creditor just as valid as those of North American and European banks? Who owes what to whom?

The piracy of these vulture funds recalls the resource exploitation of the South that most analysts hold responsible for the North’s ecological debt. This concept was first introduced by the Instituto de Ecología Política in the lead-up to the 1992 Earth Summit in Rio de Janeiro. It was explicitly presented as a framework for discussing whether countries in the South should be responsible for repaying in full their external debt. How did these debts to foreign creditors compare with the North’s liabilities for environmental impacts from early colonization onward? Were the South’s claims as an eco-creditor just as valid as those of North American and European banks? Who owes what to whom? The ensuing debate within the Jubilee South movement about the cancellation of “odious debts” imposed on poor countries was informed by this ecological backdrop. Many argued that the obligation to repay recent high-interest loans had to be weighed against moral and economic liabilities from the more distant past, and that any estimate of the balance of payments would lend itself to cancellation of all external debts.

Even so, the full dimensions of ecological debt do not lend themselves readily to quantification. They range from the plunder of resources by extractive industries, and all of the associated pollution and biodiversity damage, to the loss of populations from the slave trade and colonial wars, to biopiracy of genetic resources from plants and agriculture. But carbon debts can be measured more reliably, on the basis of atmospheric emissions estimates, and it is this portion of the ecological obligation that emerged as the main vehicle for demanding repayment of what subsequently became known as climate debt. In fact, the exact share of responsibility for fossil fuel–derived CO2pollution from 1750 onward could be broken down, country by country, as National Aeronautics and Space Administration climatologist James Hansen did in a well-publicized 2008 letter to Australian prime minister Kevin Rudd. According to Hansen’s estimate, the historical carbon debt of the United States was 27.5 percent of the total, though the United Kingdom’s obligation exceeded that of the United States on a per capita basis ($33,307 and $31,035 per capita, respectively).

The belief that such measurements could be made with a degree of accuracy helped build confidence in the movement to hold rich nations to account. Evidence that atmospheric global warming was already taking its toll on the poor countries also bolstered the case for climate debt repayment. These well-documented effects include the loss of fresh water through glacial melt and mega-droughts, soil salinization and desertification, habitat degradation and coastal inundation, species and reef loss, lower crop yields, and shifting agricultural zones. The case for populations whose very survival hung in the balance was made, forcibly and dramatically, through the UN Framework Convention on Climate Change (UNFCCC) process. More than fifty developing nations (with Bolivia in the forefront) joined with the Least Developed Countries group, representing forty-nine of the world’s poorest, to push for climate debt repayment.

The Kyoto Protocol laid the groundwork for such claims in 1997 by including the idea of “common but differentiated responsibilities” among nations, but climate activists did not fully take up the call for debt justice until the Copenhagen summit in 2009. As a preemptive strike, the U.S. State Department lead negotiator, Todd Stern, issued a statement before the summit rejecting the idea that the United States was retroactively responsible for a problem that could not have been predicted: “For most of the 200 years since the Industrial Revolution, people were blissfully ignorant of the fact that emissions caused a greenhouse effect. It’s a relatively recent phenomenon.” Seen from this perspective, there was a much narrower window for making repayment claims—on the basis of emissions since, say, 1990, when a verifiable link between atmospheric CO2 and climate change was established by the Intergovernmental Panel on Climate Change’s first assessment. This diminished time frame illustrates the perils of separating off the most quantifiable part of ecological debt—uneven carbon emissions—as the basis for negotiation.

The failure to agree on any binding emissions reductions at Copenhagen moved grassroots activists to pour their ideas and energies into the World People’s Conference on Climate Change held in 2010 in Cochabamba, Bolivia, where climate debt was front and center in the discussions among many of the working groups. The final draft of the Cochabamba Declaration announced that the North’s repayment of the climate debt had to be “the basis for a just, effective, and scientific solution to climate change.”

Of these three qualifiers, justice was the key contribution coming out of Cochabamba. After all, there are many other kinds of solutions on the table that are put forth as “effective” or “scientific.” They include large-scale geo-engineering schemes (such as seeding the world’s oceans with iron), fully realized carbon markets, and the UN’s REDD (Reducing Emissions from Deforestation and Forest Degradation) program for purchasing carbon credits through rainforest conservation. But none of these are democratic pathways, and all of them would reinforce existing patterns of inequality that condemn those with an unfair share of the carbon budget to underdevelopment. Similarly, advocates for green capitalism tend to focus solely on the LOHAS (Lifestyles of Health and Sustainability) segment of consumer markets, which comprises 20 percent of the adult population of the Organization for Economic Cooperation and Development countries. The carbon savings to be gained from the purchase and use of green gizmos by the affluent will be outweighed by the commercial neglect of much larger populations whose basic social needs are still unmet. The outcome for the eco-haves will be heavily fortified green havens, protected and cut off from human and natural sacrifice zones on the other side of the proverbial tracks.

A Bolivian proposal based on the Cochabamba agreements was submitted to UNFCCC in 2010. It defines climate debt as comprising an “emissions debt” and an “adaptation debt.” The emissions debt is based on the denial to developing countries of “their fair share of atmospheric space,” and payment of it would take the form of sharp reductions in domestic emissions of the energy-intensive countries in order to free up space for others to develop their way out of poverty. The objective here would be to “decolonize the atmosphere,” driven by the right of poor countries not to have to forgo development opportunities in the interest of containing global emissions. Adaptation debt repayment holds that the beneficiaries of the industrialization that caused climate change should compensate the victims of climate change. This compensation would cover not only reparations for the damage already done but also the costs of absorbing and combating impacts in the future. Financing clean energy technologies, and renouncing the associated intellectual property rights, would be a large part of these adaptation costs.

To date, the preferred response of high emitters such as the United States is to offer “climate aid.” In Copenhagen, rich countries promised $30 billion as part of a fast-track, three-year aid package, with an eventual goal of $100 billion by 2020. So far, most of that money (the United States has spent $7.5 billion, according to one estimate) has gone to emission reductions, with a smaller allocation (less than 20 percent by some estimates) to adaptation. In the meantime, critics contend that much of this assistance would have been offered anyway under the rubric of “foreign aid.” At the most recent UNFCCC summit in Doha, a fragile alliance of the EU, the Alliance of Small Island States, and the Least Developed Countries pushed the claims further. Despite initial resistance from the U.S. negotiators, the responsibility to mitigate “loss and damage from climate change” was incorporated into the international legal record for the first time, but there was no agreement on a monetary target or timeline for climate finance. In addition, U.S. negotiators strongly opposed any mention of “compensation” in the final Doha drafts, or indeed any language that implied legal liability for repayment of climate debt, however calculated. Avoiding any implication of blame, this language allowed payments to continue to register as “aid,” disbursed (it remains to be decided by which mechanism) as an act of benevolence and not obligation.

Another kind of climate debt discussed at Cochabamba got less UNFCCC attention. It involves the plight of environmental migrants, forced off their land and deprived of their livelihoods by climate change. Their numbers were in the tens of millions globally by 2000, and estimates from the Intergovernmental Panel on Climate Change, the 2006 Stern Review, and other sources predict that climate change will generate from two hundred million to as many as one billion migrants by 2050. To date, no international convention has recognized the needs and rights of climate migrants, even though by 2010, according to a Red Cross estimate, they outnumbered the population of refugees from war and violence. Nor is it clear that standard legal recognition would always help them; it may create yet another level of second-class status for migrants, placing them in the limbo of refugee camps and detention centers or in the maze of temporary visa categories.

These migrants are living embodiments of the quandaries raised by climate debt. What is owed to them when they cross borders into more affluent countries, with high-carbon lifestyles, as refugees? Surely they are owed sanctuary at the very least, but other forms of reparation could be brought to the table on their behalf.

Take Arizona, ground zero for U.S. nativist sentiment. Much of the state is in the bull’s eye of climate change, heating up and drying out faster than any other region in the Northern Hemisphere, but the impact of the decline in precipitation on soil erosion in northern Mexico has also been significant. Studies predict that regional rainfall could decrease by 70 percent by century’s end. Thus, a significant portion of the Mexican border-crossers to Arizona should probably be classed as climate migrants. That means there is a causal environmental link between their plight and that of their tormentors in Sheriff Joe Arpaio’s Maricopa County; carbon emissions pumped into the air above metro Phoenix are partly responsible, however indirectly, for setting the migrants in motion. In time, they may have their own carbon-conscious version of the retort offered by post-colonials when they settled in cities like London and Paris: “We are here because you were there.”

Arizona’s bitter fight over immigration may be one of the first skirmishes in the “climate wars” to come, when the threat of global warming will be used increasingly to shape immigration policies that conserve rich nations as resource islands. This enclave mentality is often cited as the basis for the border politics of Northern countries, but it is also active within these borders. Climate-induced disasters on the scale of Hurricanes Katrina and Sandy expose the uneven pattern of impacts within cities, disproportionately affecting those with the least resources. Each disaster generated its own climate migrants, and a new kind of debt trap for those offered recovery loans, along with a debate about how to shore up protections for the propertied classes.

Katrina and Sandy serve as reminders that international climate justice was modeled on the environmental justice movement that emerged within American cities during the 1980s to combat the unequal placement of hazardous industry and toxic waste. The Bali Principles of Climate Justice, adopted by environmental organizations in 2002, were based on the Environmental Justice Principles blueprint developed at the 1991 People of Color Environmental Justice Leadership Summit in Washington. The international face of climate change may be the tragic spectacle of global South islands disappearing beneath rising sea waters, but climate change is also a poisonous reality at the point of its production, and most of all for U.S. communities of color exposed to toxins from coal-fired power stations, the cancerous impact of uranium mining on reservations, or toxic ash from mountaintop removal mining.

These virulent inequalities are not confined to the North; they can be found within the borders of every nation-state. While many of these ills are due to outsourced dirty industries (remember then–World Bank chief economist Lawrence Summers’s infamous [and supposedly ironic] 1991 memo: “the economic logic behind dumping a load of toxic waste on the lowest-wage country is impeccable . . . under-populated countries in Africa are vastly under-polluted”), each country has its homegrown villains and untold environmental victims of state action undertaken by its own political class. This raises an ongoing problem for those who believe that the nation-state system, as represented at UNFCCC, is the only, or even the best, way of bargaining over climate-debt repayment. Who will guarantee that the payments don’t unduly benefit the elites of the eco-creditor countries? How much of the compensation will get to those who need it most?

This question is often asked of development aid programs, and many economists have shown that such aid tends to widen income gaps as a result of corruption by government officials and cronies. Others point to the dodgy behavior of donors; foreign aid is rarely altruistic, because it is usually dictated by geopolitical strategy or the commercial interests of donor countries and institutions. Inevitably, this strain of aid-bashing will apply to the UNFCCC-brokered system of climate finance unless there is transparent tracking of the funding to ensure that it is flowing through the most effective channels and not into the kleptocracy. One way to do this would be through a green dividend, paid out as a “basic income” to all citizens. This dividend, unconditional and not subject to means-testing, would provide a green pathway to households and communities for whom infrastructural sustainability is beyond economic reach.

A pilot program for basic income in Otjivero, Namibia, demonstrated a number of positive ripple effects, increasing the community’s income to a level well above the aggregate amount of the grant funding the program. Poverty, household debt, and child malnutrition rates fell, and economic activity shot up. In the North, a basic income guarantee could be funded easily by a carbon tax, with the payments being channeled, wherever possible, into sustainable lifestyles and a “just transition” of labor away from high-carbon livelihoods. Like Alaska’s popular Permanent Fund Dividend, a disbursement of oil revenue, it would be difficult to repeal once established. Since basic income is, by definition, divorced from work—an achievement long overdue in technologically advanced societies—it would also accord with the spirit of buen vivir, or good holistic living (as opposed to the materialist “good life”), that was championed at Cochabamba and adopted as one of the guiding principles of the climate justice movement. Bringing the basic income into being is a long-term project—the political work would require heavy lifting in both the North and the South—but it stands out as a viable instrument for minimizing the pitfalls and maximizing the merits involved in repaying a debt that really should be honored.

Andrew Ross is Professor of Social and Cultural Analysis at New York University. He is the author of many books, including Bird on Fire: Lessons from the World’s Least Sustainable City, and Nice Work if You Can Get It: Life and Labor in Precarious Times.