The Financial Repercussions Of Combating Climate Change In The Pacific

BANGKOK– The United Nations Economic and Social Commission for Asia and the Pacific was held from May 15th to 19th to discuss the climate change crisis in Asia and the Pacific Islands. 

The theme of UNESCAP this year was “Accelerating climate action in Asia and the Pacific for sustainable development,” according to the United Nations’ website

Leading up to and during this conference, various Pacific Island leaders criticized rich countries for not doing enough to combat climate change while profiting from loans given to smaller nations in order to mitigate effects of climate change. According to AP News, one such leader, Prime Minister Mark Brown of the Cook Islands, argued that giving out loans to combat climate change does not work, particularly for small Pacific island nations with small populations which contribute in small part to climate change yet suffer its effects the most. Instead, Brown suggested grants or interest free loans to support efforts in the Pacific to combat climate change. 

According to AP News, Brown expressed his concern with the current finance system to mitigate climate change: “All we’re doing is adding debt to countries that have come out of COVID with increased debt, and to me it is actually quite offensive that we would be required to borrow money to build resilience, and to borrow from the very countries that are causing climate change.” Surangel S. Whipps Jr., the President of Palau, echoed Brown, saying that “We didn’t cause the problem, but now they’re going to make money off of us by giving us a loan so we can pay back with interest.” 

Furthermore, the Economies of Pacific island nations largely rely on tourism, an industry that is threatened by climate change and lack of economic security due to the extensive number of loans and high interest rates they must pay back to wealthier countries. According to AP News, a financial deal being negotiated at the moment as an alternative to these loans between the United States and Palau is on “Compacts of Free Association” which allows the U.S. certain military and security rights in Palau in exchange for financial aid to combat climate change.

According to the UNESCAP website, the theme study suggests important goals in combating climate change such as transitioning away from fossil fuels and towards renewable energy, or moving toward low carbon transport. The same study states that “Governments need to boost their climate-smart trade and investment sectors so that they can decarbonize industries that are currently notable for exporting carbon-intensive goods.” 

Prime Minister Brown asserted a clear bottom line in the struggle to combat climate change in the pacific, according to AP News: “The fact remains that the underlying solution to assist countries that are facing the impacts of climate change is to build resilience, and building resilience takes money.”

In order for us to combat climate change as a planet, we need to find ways to finance mitigation efforts without putting smaller countries into deep pits of debt. While many movements to fight climate change themselves are beneficial, the way in which they are financed is often more harmful than sustainable for the countries receiving such loans.