South Asia and Beyond

Grants Vs Loans: ‘Developed Nations’ Aid To Developing In $100 Bn Fund Needs Significant Rise’

NEW DELHI: In our special series on the global climate crises, Helen Clark, three-time Prime Minister of New Zealand,
Administrator of the United Nations Development Programme(UNDP) for two tenures, Co-chair of the World Health Organisation(WHO) established Independent Panel for Pandemic Preparedness and Response and Editor, ‘Climate Aotearoa’ in conversation with StratNews Global Associate Editor Amitabh P. Revi.

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The 2009 Copenhagen climate summit agreed that developed countries would provide $100 billion a year to developing nations by 2020. In September 2021, a Organization for Economic Cooperation and Development(OECD) report estimated that developed countries provided or mobilised just $80 billion in mitigation and adaptation finance for their developing counterparts in 2019. Even of that reduced amount, a “very significant proportion” of the $ 100 billion a year in climate finance for low and middle income countries(LMICs) is in loans not grants, Helen Clark points out. She says LMICs argue that “high income countries have caused a lot of the climate problems and LMICs are now expected to borrow money to deal with it.” The “proportion of grant finance in that $100 billion needs to go up very, very significantly,” she adds in this interview.