Climate Proposal: Poor Countries to Pay Down National Debt by Spending Money on Themselves

Guest essay by Eric Worrall

Imagine if you could pay down your own credit card or bank debt by mowing your own lawn. This is what developing countries have just demanded from COP26. To make sure the motion is passed, they also want to hold host country Britain accountable for ensuring the success of this proposed “climate emergency pact”.

Climate change: Vulnerable nations call for ’emergency pact’

By Matt McGrath
Environment correspondent

The countries most vulnerable to climate change are calling for an “emergency pact” to tackle rising temperatures. 

The vulnerable nations say that richer countries must fulfil their obligations to deliver $100bn in climate finance per year over the 2020-24 period.

The CVF nations want this money to be split 50-50 between cutting carbon and helping countries adapt to the threat posed by rising temperatures. 

The countries also want the UK to “take full responsibility” for this aspect of the negotiations, saying it is vital to restore confidence in the Paris pact. 

Among the other areas that the most vulnerable nations want to see progress on is the question of debt-for-climate swaps. 

Many of the world’s poorest countries have large debt burdens, and these have been exacerbated by the Covid-19 pandemic which has stretched finances even further. 

In a debt-for-climate swap, a country can reduce what it owes to international creditors by directing the debt service payments to fund renewable energy or greater protection for nature.

One such restructuring was recently announced by Belize where the debt money will now go to support marine conservation projects instead.

Read more: https://www.bbc.com/news/science-environment-58477926

There is the troubling issue that developing country governments repaying debt to banks, without actually giving any money to the banks, might leave the the banks short of cash. But I guess “climate emergency pact” afflicted banks could always ask rich country governments to print new cash, to make up any shortfall.

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Quilter 52
September 8, 2021 6:23 pm

In the unlikely event that this actually gets up, then these countries may well have difficulty borrowing any future cash. After all who in their right mind would loan to someone that has no intention whatsoever of repaying the money. China might lend but the conditions will be such that they effectively end up in control of those countries economies or at least the assets that China wants.

H.R.
Reply to  Quilter 52
September 8, 2021 6:50 pm

Ack! Ack! Reality alert!!

Forrest Gardener
Reply to  Quilter 52
September 8, 2021 7:29 pm

Indeed. The law of natural consequences kicks in again.

You want to borrow money? Ok, what collateral can you offer? Nice country you’ve got there. It would be a shame if anything happened to it.

Ruleo
Reply to  Quilter 52
September 9, 2021 12:40 am

After all who in their right mind would loan to someone that has no intention whatsoever of repaying the money

Easily solved- by government mandate. Fannie Mae Freddi Mac

Philip
Reply to  Quilter 52
September 9, 2021 1:20 am

Take a hard look at Ethiopia and China’s infrastructure deal. China took land as collateral on their $12bn investment. Now Ethiopia is asking China to loosen the debt noose. They can’t meet China’s payment demands.

Last edited 10 days ago by Philip
Mickey Reno
Reply to  Quilter 52
September 9, 2021 9:04 am

Here’s a real hockey stick.

us-federal-debt-by-president-political-party.jpg
stinkerp
Reply to  Mickey Reno
September 9, 2021 12:34 pm

It’s a sobering chart, but Presidents have almost nothing to do with the federal debt other than to approve or veto the budget that Congress passes. If you look at deficit spending by which party controls Congress, a pattern emerges.

Though over the last 80 years both parties have passed budgets that exceed the rate of inflation, resulting in deficits and an increasing federal debt, the Democrats are the big spenders. Excluding war time spending which can be considered a true “emergency” (WWI, WWII, etc.), when Democrats controlled both houses of Congress deficit spending was 3 times higher than when Republicans controlled both houses.

From 1996 to 2000 when the Newt Gingrich “Contract With America” Republicans took control of both houses for first time in 60 years and pledged to end deficit spending, they produced budget surpluses for the first time in 50 years. President Bush started a couple wars that caused deficit spending again, but in the last 4 years of his term the annual deficit was declining and would have resulted in surpluses again by 2010 if the great recession of 2008 hadn’t intervened and the Democrats hadn’t renewed their breathless spending spree in 2009.

Mickey Reno
Reply to  stinkerp
September 9, 2021 11:02 pm

Stinkerp wrote: “Presidents have almost nothing to do with the federal debt other than to approve or veto the budget that Congress passes”

I understand that. I mostly blame the American electorate, which has voted for the free stuff our idiot politicians promise. We’ve collectively voted this way for many, many years. There was some before WWII but it really ramped up afterwards, partly conditioned by thinking Americans deserved as much as the former enemy states of Europe received for rebuilding. But I blame the presidents and Congress for creating and signing the debt ceiling increases and ridiculous omnibus bills that Congress has decided to substitute for doing their jobs properly.

aussiecol
September 8, 2021 6:28 pm

In a debt-for-climate swap, a country can reduce what it owes to international creditors by directing the debt service payments to fund renewable energy or greater protection for nature.

Lol. China is a developing country, right? That means it can reduce its debt for sending a space craft to Mars as well as building coal fired power stations while thinking about renewable energy.

Rory Forbes
Reply to  aussiecol
September 8, 2021 8:52 pm

Hmm … China gets to be either a super-power, with a seat at the High Table (as our resident trolls believe), or they get to be a “developing country”, not both.

Greg
Reply to  aussiecol
September 8, 2021 10:37 pm

You seriously think China is borrowing money from anyone?
The only debt problem China has is what to do with all it’s US bonds before their value evaporates.

LdB
Reply to  Greg
September 12, 2021 7:14 am

Perhaps a reality check … yes they are borrowing truckloads of money

https://www.scmp.com/economy/china-economy/article/3135883/china-debt-has-it-changed-2021-and-how-big-it-now

China does hold $1.07 trillion in Treasury holdings so it does drop back a bit.

If you want a reasonable guess at the China debt clock
https://commodity.com/data/china/debt-clock/

The high level of debt is a real issue to China … google it.

george1st:)
Reply to  aussiecol
September 9, 2021 10:19 am

China know and use every trick in the book to get their own way .
Its all legal even if coercive .
Western world just looks the other way , all in the too hard basket .

observa
September 8, 2021 6:45 pm

Won’t they please think of the poor folks in developed countries wot will have to eat bugs if we don’t print more money to keep meat prices down?
Biden administration plans tougher action to rein in meat prices (msn.com)
You know it makes sense watermelons but imagine the emotional returns for yo’all signing up to the pledge to eat bugs only for protein so the poor folks can throw a chop on the barbie occasionally?

Rory Forbes
Reply to  observa
September 8, 2021 8:55 pm

But no endangered species of bugs, mind. ‘Will nobody think of the larvae?’

Coeur de Lion
Reply to  observa
September 9, 2021 12:53 am

Talking of bugs, I wonder what infections will be imported to Glasgow by COP26? Screening? Vaccinated? From Ivory Coast? Chad? Leave town, Glaswegians.

HotScot
Reply to  Coeur de Lion
September 9, 2021 1:56 am

I did, 30 years ago.

I was careful to switch the lights out too.

H.R.
September 8, 2021 6:48 pm

That is one of my all-time favorite ‘Josh’ cartoons.

It was funny the first time, and then Josh just kept adding the strike-outs; funnier each time.

I’ve made a few jokes in comments about COP One-hundred-something-something. We shall see if Josh gets to live long enough to make that many strike-outs.

Each strike-out just gets funnier yet. What a bunch of (expensive) maroons!

Rory Forbes
Reply to  Eric Worrall
September 8, 2021 8:58 pm

I’m sure that I remember you writing about your meeting in London, many years ago.

eo
September 8, 2021 7:42 pm

Article 4 of the UNFCCC laid down the obligations of the parties. One of the main concept is of the treaty is the Common But Differentiated Responsibilities. Developing countries do not have an obligation to cut on their emissions. China was classified then as developing country when the UNFCCC was signed and went into force later. What the framers forgot is the dynamic of the world order that a number of developing countries will become developed in terms of emissions. China looks at is emission on per capita basis and it is less than half of the US with a population less than one fourth of China. The developed countries looks at China’s total emission. The same thing holds true for India, the rest of the BRICS and the other rapidly developing economies. The Kyoto Protocol is the implementing mechanism for the UNFCCC. There was nothing for the developing countries except to watch so the Clean Development Mechanism was added. If the UNFCCC does not require the developing countries to cut their emission, they will be rewarded with carbon credits if they do so subject to certain criteria. It was considered a “win win” situation because the developed countries like Al Gore could buy the credits cheaply to offset their emissions and the developing countries gets money for mowing their own lawns. However, a large number of developing countries lives on high rise tenement housing and they dont have a lawn to mow. So the Paris agreement asked the developing countries to voluntarily cut down their emissions and in doing so would qualify them access to all the funds such as the Green Funds. India in its first submission specifically stated that it will required 2.3 trillion US dollars in order to meet its voluntary commitments. In short, India “volunteers” to cut its emission in lieu of the developed countries “volunteering” to provide the money. The Philippines accession document (accession because the Paris Agreement was already in force) was more blunt that it “volunteers” to get access to the voluntary funds.

As I mentioned earlier the climate change issue is reaching its climax and soon its ending as the developed countries dont want to “volunteer” to pay for the “voluntary emission ” cuts of the developing countries and the developing countries rode on the narratives (now feeling they are taken for a ride) because of the access to “volunteered” funds that is not there now.

Streetcred
September 8, 2021 8:08 pm

Haven’t the despots of these ‘poor’ countries stolen enough from their victims / populations already?

Peter East
Reply to  Streetcred
September 8, 2021 9:01 pm

NO!

Redge
Reply to  Streetcred
September 8, 2021 11:47 pm

Not until they’ve matched thieving politicians in richer countries

Rory Forbes
September 8, 2021 9:08 pm

What happens to the money is: the UN opens a branch office of one of their numerous agencies and subordinate agencies in order to spend the money for the specific government. Naturally the resident bureaucrats and politicians require funding for the appropriate licensing, duties and expenditures. These concerns are always far too important for any of the money to get anywhere near the citizens.

Internationally, the lions share always gets back to the UN. $billions can be absorbed in this way.

Tom Abbott
Reply to  Rory Forbes
September 9, 2021 1:41 pm

The leaders will get the money, and the people will get nothing.

Rory Forbes
Reply to  Tom Abbott
September 9, 2021 2:57 pm

Yep, exactly. Socialism is designed to create an entitled bureaucracy utterly dependent on the leaders for their life style. Slick system if you can get enough people to look the other way. The modern upgrade has allowed the Oligarchs to deal themselves in and take a hand in the game (or a snout at the trough).

Last edited 9 days ago by Rory Forbes
September 8, 2021 9:55 pm

Britain should tell them to pound sand, maybe they can find a shilling or two.

Chris Hanley
September 8, 2021 9:59 pm

The photo at the top of the BBC article had a caption: ‘a woman in flood waters in Haiti’ (or similar), the caption has disappeared.
The stock photo is from a photographer who flies the world taking photos of people standing in flood waters caused allegedly by climate change due to human CO2 emissions.
A similar photo appeared in an article in the SMH in 2011 titled: ‘6/25 A photograph of a flood victim is itself fogged due to water damage done to a camera in Haiti’, however the surrounding has changed and the water appears to be at a lower level.
Curious.

Greg
September 8, 2021 10:32 pm

But I guess “climate emergency pact” afflicted banks could always ask rich country governments to print new cash, to make up any shortfall.

That’s not necessary. Banks invent 90% the money they lend out of thin air in the first place. It what economists call “creation of wealth”. That is why they can always do some debt restructuring, it just means they make a little less profit from this scam. That what is called “taking a haircut”.

Didn’t you ever wonder how all the major banks which needed trillion dollar bailouts in 2008 were able to pay it all back in a couple of years.

Charlie
September 8, 2021 11:38 pm

In the Mother of Parliaments yesterday:

Craig Mackinlay 
(South Thanet) (Con)

Q7. Will my right hon. Friend offer me an answer for my constituents of the future, as they sit around a tepid radiator powered by an inefficient and expensive air source heating unit, worrying about the payments on the electric car that they did not want either, while they watch the growing economies of the world going hell for leather building new gas and coal-powered stations? They will be asking me, “Why?” Will the Prime Minister please commit to solutions that are technologically possible to reduce Britain’s CO2, rather than uncosted commitments that—I am sorry—we will be hearing a lot of at COP26?

Thanks for trying, Craig Mackinlay. Your question deserves a proper response. Unfortunately, you got this:

The Prime Minister 

Not only has the price of batteries fallen vertiginously, as has the cost of solar power, but I can tell my hon. Friend and the people of Thanet South that they have huge opportunities. The cost of wind power in this country has fallen by 70% just in the last 10 years. What I think the people of Thanet want to see, and I am sure my hon. Friend exemplifies it, is a spirit of Promethean technological optimism.

Zig Zag Wanderer
Reply to  Charlie
September 9, 2021 1:06 am

Boris really is a complete twat

Rusty
Reply to  Charlie
September 9, 2021 1:08 am

Boris thinks we’ll all be flying on our holidays in electricity powered aircraft in a couple of years. He’s as scientifically illiterate as a toddler.

He simply cannot understand that gumption does not overcome the laws of physics.

Graemethecat
Reply to  Rusty
September 9, 2021 7:39 am

Boris is a politician who thinks that he can make things come true if he asserts that they are true.

Bill Toland
Reply to  Charlie
September 9, 2021 3:05 am

“The cost of wind power in this country has fallen by 70% just in the last 10 years” is the sort of drivel which is spouted by climate alarmists in Britain and now by Boris Johnson. In reality, the costs of wind power have not fallen at all.

https://briefingsforbritain.co.uk/the-costs-offshore-wind-power-blindness-and-insight/

Dave Fair
Reply to  Bill Toland
September 9, 2021 10:08 am

The BEIS report is the official lies of the UK government and this expose will be officially ignored or denied outright.

The future retrospective of the coming electricity sector disaster will show that politicians, bureaucrats of the Deep State, investors and green enthusiasts of all sorts were warned numerous times concerning the weaknesses of their fantasies. But nobody will be blamed (other than evil Capitalism) in the scramble to dig out of the self-inflicted disaster. The people (taxpayers and ratepayers) will be lied to again to coverup the real perpetrators.

Last edited 9 days ago by Dave Fair
Graemethecat
Reply to  Charlie
September 9, 2021 7:36 am

Remember how the personal computer caused the complete disappearance of electric typewriters in only five years?

The question one should ask of fans of Wind and Solar is this: if renewables are so wonderful, why do they need subsidies? Surely a truly transformative technology which needed no fuel whatever would have displaced all the other means of generating electricity by now?

Zig Zag Wanderer
Reply to  Graemethecat
September 9, 2021 11:51 pm

Remember how the personal computer caused the complete disappearance of electric typewriters in only five years?

We actually bought an electric typewriter when I got my first personal computer, a sinclair ZX Spectrum. The reason we bought it was that it could be used as a printer by that computer.

I was doing accounting and word processing on that combination for a few years. I seem to recall that we kept it for about 10 years in all, by that time even the most stubborn employees would accept using a PC.

Philip
September 9, 2021 1:13 am

$100bn in climate finance per year over the 2020-24 period.

$400bn in welfare to keep the have nots not having. Brilliant!

Smells like reverse colonialism to me.

Matthew Sykes
September 9, 2021 2:30 am

We live in a world of infinite bullshit.

Forget working and earning, you just run up debt, the more debt you have, the safer you are.

Student debt? Heck, have half a mil, the govt will write it off!

Govt runs out of cash? Just QE the problem away! Want 300 bn for the banks? Fine, throw it on the debt pile.

Worried about interest rates? Dont be, Japan showed us the shining path to zero growth and negative interest rates! When a society has consumed itself to obesity, it doesnt want anymore!

Cooling is warming, warming is cooling, girls are boys and boys are undecided.

Its a mad mad world we are living in!

Reply to  Matthew Sykes
September 9, 2021 12:22 pm

Matthew,
Upvoted.
But reality will come crashing in.
Learn Mandarin – or Hindi.
And I don’t expect to live to see it – but wouldn’t it liven my last hours to see the guilty nebbies being strung up!!

Auto

Zig Zag Wanderer
Reply to  Matthew Sykes
September 9, 2021 11:54 pm

Forget working and earning, you just run up debt, the more debt you have, the safer you are.

If it owe someone a hundred dollars, it’s your problem. If you owe someone a million dollars, it’s their problem.

Jim Whelan
September 9, 2021 7:21 am

The vulnerable nations say

Let’s start with the FACT that there are no “vulnerable” nations and go from there..

Olen
September 9, 2021 7:57 am

One of the reasons European countries got rid of the colonies, they cost too much. And the colonies didn’t like the Europeans to the point of revolt. They liked the infrastructure of rail, water, roads and bridges the Europeans built and the trade in goods but something was not right about the setup.

How is this any different?

Philo
September 9, 2021 8:46 am

What’s to worry? They only want 400 billion US dollars, presumably. That is a piece of cake for countries that now are routinely dealing in multi-trillions!

Dave Fair
September 9, 2021 10:22 am

Hee, hee, hee. The Prime Minister of GB is supposed to “guarantee” that the governments of the Western world will agree to raise taxes on their citizens. Even a politician as deluded as Xiden won’t drive into that political dead end. Why do you think it is that the Green Energy Fund never got funded?

Tom Abbott
Reply to  Dave Fair
September 9, 2021 2:48 pm

“Xiden”

I like it.

Felix
September 9, 2021 12:57 pm

I dunno. It says “Paris” on the box, so I think France should be held responsible.

Serge Wright
September 10, 2021 1:26 am

“One such restructuring was recently announced by Belize where the debt money will now go to support marine conservation projects instead.”

So instead of using the extra money to improve the lives and prospects of the people, the only beneficiary will be towards unknown crustaceans clinging to rocks ?.

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