DROPWinter 2018 iT!

CLIMATE CHANGE, DEBT & DISASTERS DON’T OWE, SHOULDN’T PAY

As change accelerates and we approach dangerous tipping points, damage from extreme weather events like hurricanes is increasing around the world.

Small impoverished states like the Caribbean and Pacific islands have done the least to cause , but are amongst the most vulnerable to its growing impacts. They face a spiral of indebtedness because of climate disasters: borrowing on top of existing debts to rebuild after disasters.

This situation is fundamentally unjust. The real climate debt is owed by the rich industrialised countries of the global North who are responsible for most emissions.

Instead, the people of islands like Grenada and Vanuatu are paying 3 times over for a problem that is not of their making: from the destruction wrought, the loans to rebuild, and then for the ‘ insurance’ peddled by the banks to ensure they keep repaying their debts even when their economies have been destroyed.

Jubilee Debt Campaign is joining campaigners in small states in calling for action to stop climate disasters leading to runaway debts that undermine the meeting of human rights, basic needs and the Sustainable Development Goals.

Cyclone Pam - Vanuatu

Image: New Zealand Defence Force “the growing severity of THE CLIMATE DEBT SPIRAL IN THE PATH OF THE STORM hurricanes in the Caribbean is related to man-made climate Almost four years ago, the South Pacific 1 islands nation of Vanuatu was hit by Cyclone change. This means that we Many small states already have large debts Pam, a huge cyclone with wind speeds of up in the Caribbean…are least even before disasters hit to 250 kilometres per hour. responsible for but most affected by climate change. Small Island 2 Half the population – 132,000 people – States are the most easily When climate disasters like hurricanes hit they wipe out were affected. The cost of the damage was devastated by rising seas and homes, schools, hospitals, and businesses, and vital $450 million – 60% of GDP and over $1,500 harsher storms. Our brothers infrastructure like roads and water and sewage pipes. per person. Vanuatu’s President Baldwin and sisters who inhabit these Lonsdale said the storm had "wiped out" all places are in peril, through no recent development and the country would fault of their own. This has been 3 have to rebuild "everything". one of the reasons that we have Countries are forced to borrow to rebuild, never been able to sustainably taking on additional debt Cyclone Pam has long since disappeared escape from our debt traps.” from the news, but the cost of rebuilding has remained. Because Vanuatu did not get Statement from 19 Church leaders in the enough grants to pay for reconstruction, Caribbean 4 And now they are being told to take out much of the cost has been paid for through , so that they can keep government borrowing. paying this debt when the next disaster hits The IMF conducts debt assessments for 21 In the years since the cyclone, Vanuatu’s impoverished small states. Of these, two government debt has almost doubled. The 5 Extreme weather events are increasing in are in debt default, 11 are at high risk of frequency as climate change gets worse, IMF says the main reason is the cost of default, eight at medium risk and none at accelerating the cycle of disasters and debt. rebuilding from the storm. low risk.

Cyclone Pam was the second strongest storm Scientists say that the strength of tropical in the South Pacific on record, and scientists storms has already increased in recent DON’T OWE, SHOULDN’T PAY predict damage from tropical storms across decades, and they are expected to get even the world will increase due to climate change. more damaging as global temperatures increase. High debts prevent countries UNJUST DEBT from investing in preventative measures to limit the damage from these disasters. Small impoverished states like Vanuatu are Unless the international community acts, particularly vulnerable to climate change. debts will continue to spiral after each

But they are not responsible for causing the disaster hits. problem. Twenty-nine small island states with

0.7% of the global population are together When a disaster does arrive, the damage responsible for just 0.2% of global carbon can be long term. The Caribbean island dioxide emissions. of Grenada used to be known as a major Country Year Disaster Total damage Government debt year Government debt exporter of nutmeg. Then in 2004 it was hit before the disaster two years after When hit by disasters such as tropical storms by Hurricane Ivan, which toppled nutmeg Vanuatu 2015 Storm $449,400,000 21% 39% they are forced to borrow to pay for fixing the trees across the island. Nutmeg exports Grenada 2004 Storm $889,000,000 80% 93% damage caused. Moreover, many small states fell from 2.5 million kilogrammes a year Belize 2001 Storm $250,000,000 67% 96% were not included in debt relief schemes we before the hurricane, to just 0.35 million have successfully campaigned for, so they are kilogrammes after. And because of the Tonga 2001 Storm $51,300,000 32% 41% already affected by large debts, even before time it takes for nutmeg trees to mature, by disasters hit. 2016, Grenada was still only exporting 0.85 million kilogrammes. THE CLIMATE DEBT SPIRAL THE CLIMATE DEBT SPIRAL 1 Many small states already have large debts even before disasters hit 2 When climate disasters like hurricanes hit they wipe out homes, schools, hospitals, and businesses, and vital infrastructure like roads and water and sewage pipes. 3 Countries are forced to borrow to rebuild, taking on additional debt

4 And now they are being told to take out climate risk insurance, so that they can keep paying this debt when the next disaster hits

5 Extreme weather events are increasing in frequency as climate change gets worse, accelerating the cycle of disasters and debt.

DON’T OWE, SHOULDN’T PAY

29 small island states are together Over 90% of the most damaging responsible for just 0.2% of global climate disasters since 2000 have emissions been in Small Island Developing States, with over 60% taking place in the Caribbean.

Country Year Disaster Total damage Government debt year Government debt before the disaster two years after Vanuatu 2015 Storm $449,400,000 21% 39% Grenada 2004 Storm $889,000,000 80% 93% Belize 2001 Storm $250,000,000 67% 96% Tonga 2001 Storm $51,300,000 32% 41% ENDING THE CLIMATE DEBT SPIRAL “As climate change The true climate debt is owed by those gets worse, we urgently countries who have contributed most need a new system to climate change, and it is owed to for fast and effective those who are most severely impacted. debt relief when It is a moral outrage that those who are disasters hit. We call on most affected by climate change are being made to take on debts because larger Commonwealth of the disasters that climate change is countries, including the exacerbating. UK, to play a leading role We urgently need policies to stop in the creation of such a climate disasters leading to debt system. Those who have burdens which undermine the meeting contributed the most to climate of human rights, basic needs and the change are the real debtors and Sustainable Development Goals. Jubilee it is, therefore, unfair that small Debt Campaign is standing alongside campaigners in small states to call for: island developing states, which are most vulnerable, like those in 1) A new comprehensive debt relief the Caribbean, be indebted as a scheme for small states to reduce debt to a sustainable level, and ensure remaining result.” debt payments are linked to ability to pay. Keith Mitchell, Prime Minister of Grenada, and Gaston Browne, Prime Minister of 2) A permanent, effective, Antigua and Barbuda automatic debt relief process in response to disasters

CLIMATE RISK INSURANCE

Climate ‘risk’ insurance is being heavily Read more: Jubilee Debt Campaign’s 16- promoted in response to increasing page briefing ‘Don’t owe, shouldn’t pay: damage from disasters. However, the The impact of climate change on debt idea is fundamentally unjust - putting in vulnerable countries’ is available at the costs back on the victims of climate www.jubileedebt.org.uk/climatebriefing change, through insurance premiums, or by sending us the enclosed material rather than on those who cause it. order form. Furthermore, insurance is a highly inefficient use of resources. Jubilee Debt Campaign has found out that one scheme in the Caribbean has received $293 million in premium payments and grants from donors since it began in 2007, but has paid out just $131 million TAKE ACTION in claims. In contrast, $105 million from the scheme has gone to private Ask the Secretary of State for insurance companies as profit. International Development to help end the climate debt spiral. Please sign the card attached AFRICAN GOVERNMENT DEBT PAYMENTS “Debt problems are worsening on the DOUBLE IN TWO YEARS African continent, but many lenders bear responsibility, not just China. We need Jubilee Debt Campaign released new new rules to make all lenders publicly figures in October showing that debt disclose loans to governments at the payments to the rest of the world by time they are given. Furthermore, the IMF African governments have doubled in the needs to stop responding to debt crises by last two years, and are now at the highest giving loans which bailout other lenders, level since 2001. The increase comes from China to Western companies, after the price of raw material exports like incentivising them to continue lending metals and fossil fuels fell a few years recklessly. Instead, lenders need to be ago, and because of increases in global made to restructure and reduce debts.” interest rates. Read more: In recent months there has been much media concern that the rising debt crisis ‘African governments’ debt across many African countries is caused payments double in just two years’ at by Chinese loans. However, the Jubilee www.jubileedebt.org.uk/africadebt Debt Campaign research shows that just 20% of the debt of African governments, and 17% of interest payments, is owed to China. In contrast, 55% of interest External debt payments by payments are to private companies, many based in the UK or giving loans using UK African governments have law. doubled in the last two years, and are now at the highest level The Financial Times reported the story. since 2001 Tim Jones, policy officer at Jubilee Debt Campaign told the paper:

Street sellers in front of a mural in Lusaka, capital of Zambia. Zambia is one country in debt crisis where China is a significant lender, accounting for 30% of Zambia’s debt. But 50% is owed to (Photo David Brown / Flickr) private lenders, mainly under English law ‘Breaking the chains of debt’ celebration, Birmingham, September 2018 (Jubilee Debt Campaign) PRESSURE GROWS FOR INCREASED LOAN CELEBRATING 20 YEARS OF DEBT JUSTICE TRANSPARENCY On 29th of September Jubilee Debt Our campaign is helping to bring Campaign supporters from around the increased attention on the need for country came together for a day-long greater transparency of loans to gathering in Birmingham to mark 20 governments. The subject was a key years since the 'human chain' around theme of the IMF and World Bank Annual the G8, which saw more than 70,000 Meetings in Indonesia in October, and will on the streets of Birmingham calling be discussed at the meeting of world for debt cancellation for countries in leaders in December. the global South. Over 100 debt justice activists old and new joined to hear The global organisation for banks, the keynote speeches from former Jubilee Institute for International Finance, is Debt Campaign directors Ann Pettifor planning to launch new guidelines which and Nick Dearden and thoughts on the recommend that banks disclose the legacy of Jubilee 2000 from long-standing existence of all loans to governments to North-East campaigner David Golding and a central body. Jubilee Debt Campaign Atallah FitzGibbon from Islamic Relief. has been pushing the IIF to make this as effective as possible. However, it will While the day was about celebrating what be a voluntary scheme, and so we are has been achieved, it was also about campaigning for measures which go looking forwards to the challenges ahead, further, creating a mandatory scheme with workshops on our three priority which requires all lenders to disclose campaigns: on lending transparency, loans. climate change and debt, and the growing household debt trap here in the UK. Big Take action: thanks to everyone who came along on the day, to Jubilee Birmingham for hosting If you have 2 minutes, please email us, and to all the fantastic speakers. Let’s your MP through our website to ask hope we can achieve as much together them to pressure the UK government and more in the next 20 years! to take action on loan transparency www.jubileedebt.org.uk/shinelight

If you have 5 minutes, please email our policy officer Tim Jones who can help you send a physical letter to your MP: [email protected] £

WEEK OF ACTION ON HOUSEHOLD DEBT the office, and we’re planning to deliver them to the Chancellor shortly. This is From 27 October to 4 November we held just the first step, and we need to keep up our first nationwide week of action on the the pressure if we’re going to secure the growing household debt trap faced by government action needed to end rip-off families and communities across the UK. lending and help families in the debt trap. Jubilee Debt Campaign supporters up and down the country organised activities in Take action: their communities to raise awareness of the debt trap, encourage others to join Email the Chancellor and call on the the campaign, and put pressure on the government to tackle the debt trap: government to act. https://jubileedebt.org.uk/actions/ debttrap People held stalls in their local high streets and coffee mornings in their workplaces, wrote to local newspapers, and gave talks and sermons in their places of worship.

We’d like to say a massive thanks to everyone who took part for making the week of action such a great success. The signed postcards have been flowing into

ABOUT US Jubilee Debt Campaign The Jubilee Debt Campaign is a UK charity The Grayston Centre working to end poverty caused by unjust 28 Charles Square debt through education, research and London N1 6HT campaigning. 020 7324 4722 Jubilee Debt Campaign [email protected] www.jubileedebt.org.uk dropthedebt Content & cover design MK Associates (Matt Kay, Henry Madsen) Registered charity no. 1055675 Company limited by guarantee no. 3201959 Content & cover design MK Associates (Matt Kay, Henry Madsen) www.jubileedebt.org.uk/privacy at policy privacy our see Please time. any at unsubscribe You can post by work: Campaign’s Debt Jubilee about hear to like would you if Tick Yours sincerely • • secure: to working by disasters climate by caused spiral debt the end help you will Please law. UK by governed contracts in sector private the to and say, alarge has UK the which in institutions multilateral primarily creditors, of avariety across owed is debt This schemes. relief debt global from excluded and indebted heavily already are states these of Many states. small for disasters from damage increasing dramatically is change Climate State, of Secretary Dear Please seeourprivacypolicyatwww.jubileedebt.org.uk/privacy You canunsubscribeatanytime. A Em Tick ifyouwouldliketohearaboutJubileeDebtCampaign’swork: d DONATION PLEASE SENDME: T MY DETAILS [email protected] orphone 02073244722 If you’renot makingadonation, youcanalsoemail yourorderto Jubilee DebtCampaign, TheGraystonCentre, P Emai Addres Fu QUA i e d l t e c ll l d

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CLIMATE CHANGE, DEBT & DISASTERS

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