Below is a copy of Alan Beattie’s Financial Time article on the Copenhagen conference on climate change.
For rich nations, this is not the season for giving
By Alan Beattie
One of the ostensibly less feeble parts of the feeble deal reached at Copenhagen was the money. Rich nations seemingly overcame their Scrooge-like tendencies and forked out $10bn a year until 2012, rising to $100bn annually by 2020, to help developing countries adapt to climate change and to mitigate its effects.
God bless us, every one? More like: bah, humbug. This festive gift is nothing like as generous at it sounds. Given the murkiness with which aid is labelled and distributed, any promise is highly uncertain when announced and its implementation nearly impossible to judge in retrospect.
Instituting a new global system of tradeable carbon permits could be a genuinely innovative way of effecting transfers. But at present we are left with vague talk of climate change aid.
Copenhagen is not alone. The recent food security summit in Rome made a resounding call for agriculture’s share of aid to be increased, and there have been negotiations about “aid-for-trade” on the sidelines of the Doha trade round for years. Seasoned aid experts often watch the resulting announcements while shaking their heads in sorrow, or banging them on the desk.
First of all, take the concept of “additionality” – that any new money must be on top of existing aid. But additional to what? The last set of big development aid pledges were made by the Group of Seven – though not other donor countries – at Gleneagles in 2005. But they collectively started falling behind those pledges as soon as they were made and are likely to end this year only halfway to their 2010 targets. Should an additional pledge be on top of what is actually being spent, or what has been promised? If the former, the new pledge merely allows donors quietly to drop their previous promise; if the latter, it is so wildly unlikely to be kept that it further devalues the process.
Second is the question of labelling. It has become increasingly inaccurate to call any transfer “agricultural aid” or “climate change aid”. The trend among rich donor countries has been towards direct support of recipients’ budgets, not standalone projects, and money is fungible. On top of that, the public finance systems of many developing countries are not sophisticated enough meaningfully to record aid as going to a particular end.
Karin Christiansen of Publish What You Fund, one of a growing number of aid transparency campaigners, points out that the rules of official aid statistics allow donors to classify their aid in two different ways, by sector (agriculture, education) and by function (biodiversity, climate change, gender equality). So a donor that really wants to, can count the same dollar as both agriculture and climate change aid. (Not that all donors have even bothered reporting which aid is supposed to serve which function.)
And who determines what climate change aid is anyway? A government wants assistance to install solar pumps to irrigate farms growing partly for export. Is that aid for climate change, agriculture or trade? All this process does is induce cynicism in the recipient and the perpetual relabelling of plans, depending on the donor obsession du jour.
In a sense, we should rather hope that the labels are meaningless. The Overseas Development Institute in London pointed out in a study commissioned by the One campaign that if a lot of money does get spent on adapting economies to climate change – as opposed to mitigating its effects – it will probably mean aid being diverted from the poorest countries in Africa to middle-income nations in the Middle East, Asia and Latin America. (Disclosure: I’m a member of the ODI’s governing council, but had no role in this report.)
Aid policy is too often captured by what Clare Short, the former British secretary for international development, used to call “initiativitis”: the endless manufacturing of meaningless announcements, often via the double and triple counting of money. Such announcements seem intended to con the public into thinking that progress is being made and are used as sweeteners to induce developing countries to sign unpalatable deals.
Fewer and fewer people are being fooled: even campaigners that used to cheerlead aid announcements have become much more sceptical. Yet the debates over largely notional money still occupy time and attention that would be better spent on issues of substance.
Alan Beattie is the FT’s world trade editor