PH must not borrow its future through climate loans

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SIX months after the conclusion of the climate negotiations in Glasgow, the same trends are largely continuing in the global political arena. This includes climate finance which still looms as a complex and divisive issue.

Yet, amid broken promises and frustrating baby steps, the position of developing countries is still the same: funding from developed countries and multilateral institutions must come in the form of grants, not loans.

This position is largely based on their common demand for climate justice, as nations with the lowest contributions to greenhouse gas (GHG) emissions but the greatest vulnerability to impacts. Receiving compensation from big polluters is seen as paying off their “climate debt” for causing the crisis that is causing substantial loss and damage to high-risk communities and nations.

It is in this context that the Philippines’ most recent act to secure climate finance is perplexing. Earlier this month, the Climate Change Commission made public its loan-based partnership with the Asian Development Bank in support of its adaptation and mitigation strategies.

Of the $650 million borrowed (more than 34 billion pesos), $400 million is allocated to a program that supports infrastructure financing and connects private sector infrastructure to capital markets. The remaining sum is intended for the implementation of its national climate adaptation and mitigation policies, including its goal to reduce its GHG emissions by 75% in the current decade as part of its determined contributions. on a national level.

Ironically, his commitment also calls for most of this goal to be conditional on or funded by other entities on the basis of climate justice. This action essentially contradicts the position of the Philippines, which is based on its status as a minor emitter of GHGs which is one of the countries most vulnerable to the anthropogenic impacts of climate change.

Arguably, this is partly fueled by the Philippine government’s urgency to secure financial support that it can currently access to kick-start the implementation of its strategies. However, this development has the potential to place the burden of the long-term socio-economic impacts of this loan on future generations of Filipinos, especially the marginalized and most vulnerable sectors.

The ultimate price of borrowing could be higher, given that the Philippines has just suffered more than 506 billion pesos in climate-related losses and damages over the past decade. Action that increases vulnerabilities and risks when negative impacts are expected to intensify not only worsens existing social and economic inequalities, but also prevents individuals and communities from exercising their rights necessary for further development.

The Philippines cannot afford to put itself at a greater disadvantage, especially as it is also trying to recover from the Covid-19 pandemic while dealing with the climate crisis. Instead of going into debt, it should instead strengthen its leadership with vulnerable countries to demand the means of implementation that developed nations have pledged to provide.

Furthermore, the government should not follow the current global trend that most forms of climate finance from the public or private spheres take the form of loans. Without appropriate interventions, this could set a bad precedent for future national strategies aimed at ensuring the means of implementation, whether at the level of global negotiations or bilateral agreements.

Slow progress in global climate negotiations should not be used as an excuse to pursue unfair climate finance modalities. Given the Philippines’ weakened position as a dominant voice on the global climate policy-making stage in recent years, this development also gives more leverage to developed countries that are already failing to meet their commitments to stick to the status quo.

More importantly, it can also be seen as an act of injustice towards communities bearing the brunt of the extreme impacts of climate change. As a proponent of the proposal to create a financial mechanism to directly address loss and damage in the Glasgow climate talks, this is another irony the Philippines cannot be known for.

It should be emphasized that any means of implementation for the Philippines, or any vulnerable nation, must be provided by developed countries or funding institutions through unconditional grants. Climate solutions must stay true to the well-established principles of the UNFCCC and the Paris Agreement, including maintaining common but differentiated responsibilities and respective capabilities.

Moreover, vulnerable countries like the Philippines should not hesitate to anchor their climate action strategies on these principles. Decades of negotiations, while frustratingly slow, have nevertheless created the momentum needed to get things done that have been deadlocked for too long, including climate finance and loss and damage.

Highly vulnerable developing countries should not be denied their right to pursue their own path to development. It doesn’t mean they have to make choices because it’s the most available to them. Instead, it should be an opportunity for countries like the Philippines to show an example of a people-centered and environmentally sound path to climate-resilient development.

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John Leo is Deputy Executive Director of Programs and Campaigns for Living Laudato Si’ Philippines and a member of the Aksyon Klima Pilipinas Acting Secretariat. He has been representing Philippine civil society at United Nations regional and global climate and environment conferences since 2017. He has been a climate and environment journalist since 2016.

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