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Reacting to Budget 2023

Reacting to Budget 2023, Jim Clarken, Oxfam Ireland CEO, said:

“We welcome the increase of €177 million for Overseas Development Assistance (ODA) announced today. In delivering a cost-of-living budget and responding to challenges at a national level, it is vital we do not forget those who will be hit hardest by this global crisis and we are pleased to see such commitment in Budget 2023, as well as increased humanitarian aid for the Horn of Africa.

“While we welcome the increase, we are also acutely aware of the urgent need to reach our long-standing commitment to spend 0.7% of Gross National Income on ODA by 2030, as well as to provide our fair share of climate finance. A deadly combination of climate, conflict and Covid-19, compounded by a global food crisis fuelled by the war in Ukraine, means the world’s poorest and most vulnerable can’t wait almost a decade for us to deliver on our obligations.

“Our research estimates that one person is dying of hunger every 48 seconds in drought-ravaged East Africa. And across 10 climate-hotspot countries, collectively responsible for 0.13 percent of global emissions, 48 million people are suffering acute hunger with 18 million of those on the brink of starvation.

“Against this backdrop, we cannot have a budget that isn’t strong enough on our commitments on climate finance, which must be scaled up and met outside of our existing obligations on ODA.

“A transformed tax system could provide vital budget contributions in Ireland, helping to address the cost-of-living crisis nationally as well as meeting life-saving commitments globally.

“We welcome the Government’s statement that it’s not fair for companies to earn excess profits from a volatile market. We also welcome their aim to be part of the EU-wide response to capture the windfall gains of energy companies.

“However, we believe this response should extend to all industries, not just the energy sector. The pandemic was a billionaire’s bonanza across big business – in the food industry alone, the last two years saw 62 new billionaires. Meanwhile decades of progress on ending extreme poverty were reversed and millions of people now face hunger and destitution, with women and girls impacted most negatively.

“The Government has missed an opportunity to bring a new complexion to our tax system through progressive wealth and broad windfall taxes, that would combat inequality and help fund the rapid sustainable transformation of our economy to help avert climate catastrophe.

“We proposed a transformative vision for Budget 2023 in which Ireland would take the lead on the international stage by advocating for foreign debt cancellation and reallocating its IMF allocation of €4.69 billion – known as ‘Special Drawing Rights’- to those countries in Africa and Asia facing hunger and climate breakdown. While neither were mentioned in today’s budget, Ireland will still have the opportunity to show leadership on these issues when the IMF and World Bank meet in Washington next month.”

To read Oxfam Ireland’s pre- budget submission see here.

ENDS

CONTACT: Alice Dawson Lyons | alice.dawsonlyons@oxfam.org | +353 (0) 83 198 1869

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Climate Finance in West Africa

Rich countries' aid to West Africa to cope with climate change is insufficient and dangerously worsening debt levels

Rich countries and multilateral donors have so far mobilised only 7% of the estimated $198.88 billion that West African countries need by 2030 to cope with the climate crisis and pursue their own green development.

According to a new Oxfam study today, Climate Finance in West Africa, 62% of $11.7 billion declared by donors between 2013 and 2019 have been mostly in the form of loans, which will have to be repaid, many with interest, aggravating the debt crisis in most West African countries.

Climate finance is a highly-contentious issue that again threatens the success of the crucial UNFCCC climate talks in Egypt this November. Oxfam and a hundred African civil society organisations are concerned that African countries will come to the summit with little confidence that donors will honour their repeated promises to mobilise 100 billion a year for climate action in developing countries (a target that has been missed by $16.7 billion in 2020).

These organisations are calling on rich countries -historically responsible for climate change -to assume their fair share to help the region face the escalating climate crises that have hit the African continent.

The report warns that rich countries are increasingly using loans to help West African countries cope with climate change. Between 2013 and 2019 loans have increased by 610% from $243 million to $1.72 billion. By comparison, grants have only increased by 79%. Among the donors that have made the most use of loans as a proportion of their total climate financing are the World Bank (94%), France (94%), Japan (84%), the African Development Bank (AfDB) (83%) and the European Investment Bank (EIB) (79%).

"At a time when West Africa is reeling from multiple crises including climate, hunger, and security, these financial flows are grossly inadequate and not what was promised. Many of these are now loans that actually reduce countries’ capacity to cope. Most countries are falling into a spiral of debt and poverty, which runs counter to the spirit of climate justice. The consequences are disastrous for millions of people who are paying the price for the impacts of climate change yet not responsible for it," said Assalama Dawalack Sidi, Oxfam's Regional Director for West and Central Africa.

The consequences of debt and the capacity of countries to provide basic services to populations facing multiple crises are very real. For example:

  • Although Niger (7th most vulnerable country in the world to climate change), Mali (13th most vulnerable), and Burkina Faso (24th most vulnerable) all face a risk of debt distress, they have received a sizable share of climate finance in the form of loans and debt: 51%, 43%, and 41%, respectively. These countries are already being pushed into a new wave of austerity measures by the IMF and are planning combined budget cuts of $7.2 billion by 2026 which will further limit their ability to invest in quality public services and protection for their citizens.

 

  • Ghana currently receives 40% of its climate finance in the form of loans and debt, despite already being at high risk of debt distress. In 2019, Ghana was spending 55 times more on debt servicing than on agriculture. It is planning a $23.3 billion budget cut by 2026.

 

Oxfam believes that funding in West Africa should focus on adaptation measures, rather than mitigation given the region is a very low contributor to global greenhouse gas emissions. However, there is an 82% gap between the adaptation funding reported in 2019 and the needs expressed by West African countries.

Chad, the world's most vulnerable and least prepared country for climate change, has the largest funding gap for adaptation with 95% of its financial needs not covered ($1.49billion of $1.57billion per year)by 2030.

These findings are all the more alarming given that hunger is increasing at an unprecedented rate in the region, in part driven by droughts that are becoming more frequent and severe as rainfall becomes more erratic and unpredictable. There has been a 154% increase in the number of people now food insecure between March-May 2022 compared to the five-year average between 2017-2021.

"We demand that all donors urgently increase their climate financing and honour their promises. These funds must be disbursed as grants not loans and must respond to the priorities and adaptation needs of recipient countries and their communities," said Sidi.

The report's recommendations support the recent joint statement by two dozen African leaders meeting earlier this month at a forum in Cairo, where they urged the richest countries to uphold their aid pledges so the continent can tackle the effects of climate change for which it shares little blame.

The report is being published ahead of citizen caravans organised by about 100 African civil society organisations, including Oxfam, that will travel across 23 countries on the continent to Egypt. The caravans will mobilise communities and policymakers along the way to highlight the harm that climate change is causing to Africa and demand more justice in climate finance.

"As Africa heats up, African communities’ temperature is rising too. Today, people are uniting to demand more climate justice. The international community, and rich donors, in particular, must urgently hear their cries," said Sidi.

END/

 

Notes to the editors

  • Download the report Climate Finance in West Africa: Assessing the State of Climate Finance in One of the World's Regions Worst Hit by the Climate Crisis.The eight West African countries analyzed are Senegal, Mauritania, Mali, Burkina Faso, Niger, Ghana and Nigeria.
  • The levels of climate finance reported by global donors in 2019 ($2.5 billion) represent only 12.7% of the average annual financial needs for external climate finance expressed by West African countries in their nationally determined contributions (NDCs) (covering the period 2021-2030). However, when considering Climate-specific net assistance (CSNA), current public funding that can be considered relevant for climate action would fall to 7.1% of average annual needs between 2021 and 2030, representing an alarming climate finance gap of 92.9%. The CSNA is a method of calculating climate finance developed by Oxfam, designed to be more equitable than the tools currently used by donors. The CSNA estimate includes 100% grants and grant equivalent of loans, guarantees and other debt instruments.
  • Oxfam's estimate of net climate-specific aid is based on climate-related development finance as documented by the OECD.
  • See the Aggregate trends of climate finance provided and mobilized by developed countries in 2013-2020 against the 100 billion annual targets, OECD, 2022
  • Follow the caravans for the climate in Africa that will crisscross 23 African countries (Senegal, Benin, Niger, Ghana, Nigeria, Mali, Burkina Faso, Chad, Kenya, Uganda, Ethiopia, Ivory Coast, DRC, Gambia, Guinea, Malawi, Mauritania, Mozambique, South Africa, South Sudan, Togo, Zambia, Zimbabwe and Somalia) and will converge in Sharm el Sheikh, Egypt, at the time of the world climate conference (COP 27) from November 7 to 18, 2022. These caravans are a catalyst for the demands of African populations -especially youth and women-on climate finance (loss and damage, adaptation, and mitigation). They are organised by civil society organisations such as Young Volunteers for the Environment (YVE), CIDSE -International family of Catholic social justice organisations and a hundred others, with the support of Oxfam.
  • According to Government Spending Watch, in Ghana in 2019, the total public debt service (external and domestic) reached 75 percent of government revenue, with domestic debt accounting for two-thirds.
  • The Notre Dame Global Adaptation Initiative(ND-GAIN) index assesses a country's vulnerability to climate disruption and its ability to mobilise investment. Chad is ranked 182nd out of 182 countries.
  • While some loans are concessional, Oxfam is even more concerned by the high prevalence of non-concessional finance among some donors, especially the AfDB ($454m; 43% of its total), United States ($308m; 39% of total), the GCF ($229m; 73% of total), France ($167m; 13% of total), and the EIB ($137m; 68% of total).
  • The newly released report by World Bank Country Climate and Development Report (CCDR) for the G5 Sahel region estimates that up to 13.5 million people across the Sahel could fall into poverty due to climate change-related shocks by 2050 if urgent climate adaptation measures are not taken.
  • 14 out of 16 West African countries plan to reduce their national budgets by a total of $69.8 billion between 2022 and 2026 due to pressure from the International Monetary Fund (IMF) through its COVID-19 loans, based on the World Economic Outlook Database of the IMF and Oxfam’s analysis Adding Fuel to Fire: how IMF’s demands for austerity will drive up inequality worldwide.
  • According to calculations based on World Bank databases, an individual living in West Africa emits only 0.43 tons of CO2 per year. In comparison, a U.S. citizen emits 15.2 tons, with the global average being 4.5 tons.
  • Oxfam’s report HUNGER IN A HEATING WORLD: How the climate crisis is fuelling hunger in an already hungry world shows that climate change is deepening hunger in 10 of the world's worst climate hotspots, including Burkina Faso and Niger. For food security projections, see the Food Security and Nutrition Working Group (FSNWG) estimates.
  • African nations meeting in Cairo from 7 to 9 September call for climate change funding ahead of COP27.

 

Contact

Clare Cronin | clare.cronin@oxfam.org | +353 (0) 87 195 2551
 

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Extreme hunger has more than doubled in 10 of the world’s worst climate hotspots over past six years

18 million people are on the brink of starvation

Ten of the world’s worst climate hotspots have suffered a 123% rise in acute hunger over the past six years, according to an Oxfam report published today. The hotspots are those with the highest number of UN appeals driven by extreme weather events such as droughts, cyclones, and floods – which have increased five-fold over the past 50 years.

The brief – Hunger in a heating world – found that the 10 climate hotspots – Somalia, Haiti, Djibouti, Kenya, Niger, Afghanistan, Guatemala, Madagascar, Burkina Faso, and Zimbabwe – have repeatedly been battered by extreme weather over the last two decades. Today, 48 million people across those countries suffer acute hunger (up from 21 million in 2016), and 18 million of those people are on the brink of starvation.

Jim Clarken, Oxfam Ireland Chief Executive Officer, said: “We were just visiting our programmes in northern Kenya, one of the 10 hotspots highlighted in the brief. There, development work has helped build resilient communities that have managed to keep going through four failed rainy seasons. In 2011 in Somalia, just two failed rains caused widespread famine that claimed the lives of nearly 260,000 people. Across Kenya and the wider region, famine is a step away. We estimate that one person is dying from hunger every 48 seconds across drought-ravaged East Africa.”

Climate-fuelled hunger is a stark demonstration of global inequality. Countries that are least responsible for the climate crisis are suffering most from its impact and are also the least resourced to cope with it. Collectively responsible for just 0.13 percent of global carbon emissions, the 10 climate hotspots sit in the bottom third of countries least ready for climate change.

In contrast, polluting industrialised nations such as those of the G20 – which control 80 percent of the world’s economy – are together responsible for over three-quarters of the world’s carbon emissions.

Clarken continued: “Extreme crisis necessitates extreme measures – and right now, millions of people are facing starvation in a world of plenty. We cannot fix the climate crisis without fixing the systemic inequalities in our food and energy systems. One of our key proposals around this is a wealth tax and broad windfall tax which could yield billions in revenue to tackle crises at home and uphold commitments overseas, including on climate finance.

“Those worried about the viability of the business sector should understand that windfall profits are separate to everyday profits. They are lottery type wins paid for by ordinary people in Ireland, Kenya and all over the world. We see taxing them as an essential part of restoring social order and justice.”

Important policy changes are equally needed to address the double crisis of climate and hunger. Unless massive and immediate action is taken, hunger will continue to spiral. 

“Ahead of UN General Assembly meetings this week, and COP 27 in November, world leaders, including Ireland’s, must live up to their promises to cut emissions. They must pay for adaptation measures and loss-and-damage in low-income countries, as well as immediately inject lifesaving funds to meet the UN appeal to respond to the most impacted countries.

“We welcome Minister of State for Overseas Development Aid Colm Brophy’s recent visit to Kenya to raise awareness about the devastating climate-induced crisis there as well as the increase in Irish Aid funding to the region. We continue to urge the Irish Government to show leadership and call for immediate and substantive funding to meet the grossly under-funded UN humanitarian food security appeals,” said Clarken.  

Download Oxfam Ireland’s report Hunger in a Heating World.

ENDS

CONTACT:

Notes to the editors

  • Somalia is facing its worst drought on record, and famine is expected to unfold in two of its districts: Baidoa and Burhakaba. One million people have been forced to flee their homes due to the drought. The country ranks 172nd out of 182 countries in terms of its readiness to cope with climate change.
  • In Kenya, the current drought has killed nearly 2.5 million livestock and left 2.4 million people hungry, including hundreds of thousands of children severely malnourished.
  • In Niger, 2.6 million people are facing acute hunger today (up 767 percent from 2016). Cereal production has crashed by nearly 40 percent, as frequent climatic shocks on top of ongoing conflict have made harvesting increasingly difficult. Production of staple foods such as millet and sorghum could plummet even further by 25 percent if global warming surpasses 2°C.
  • Burkina Faso has seen a staggering 1350 percent rise in hunger since 2016, with more than 3.4 million people in extreme hunger as of June 2022 due to armed conflict and worsening desertification of crop and pastoral lands. Global warming above 2°C would likely decrease cereal yields like millet and sorghum by 15–25%. 
  • In Guatemala, a severe drought has contributed to the loss of close to 80 percent of the maize harvest and devastated coffee plantations.
  • In Oxfam Ireland’s pre-budget submission to the Government, they point out that: “The Programme for Government pledges to increase Ireland’s official aid budget to 0.7 percent of  national income in line with international commitments by 2030. In 2022, despite a monetary increase in the ODA budget of €176m on the 2021 allocation, Ireland’s spending on ODA remained at 0.32% of GNI.”
  • It is estimated that Ireland’s fair share of climate finance allocations under the UNFCC would be between €340m to €840m per year taking past emissions and wealth into account” based on calculations by the Overseas Development Institute which state that Ireland is only paying 25%-50% of its fair share. Therefore, Oxfam Ireland agrees that Ireland needs to deliver and move beyond its target of €225m per annum of climate finance as a matter of urgency.
  • Oxfam will be inviting people to sign on the Loss and Damage open letter from Climate activist Elizabeth Wathuti, which will be handed in to the COP presidency during COP 27 in November.
  • The FSIN began producing the Global Reports on Food Crises in017. Sum of the population in IPC3+ food insecurity in the ten countries in 2016 (See GRFC 2017, p. 21) was 21.3 million and in 2021 (See GRFC 2022, pp. 30 – 33) was 47.5. The percent rise is therefore 123%.
  • The calculations of those facing starvation in the 10 countries is based on the total number of people at IPC 4 level of food insecurity and above in 2021, according to the GRFC 2022, see Understanding IPC classification.
  • The 10 worst climate hotspots were calculated looking at countries with the highest number of extreme weather-related UN appeals since 2000, where climate was classified as a “major contributor” to these appeals.   Source: Oxfam’s “Footing the Bill” report May 2022.
  • The 10 countries had the highest number of appeals linked to extreme weather, where climate was a major contributor to the appeal, according to the methodology outlined in the Oxfam (2022) Technical Note UN Humanitarian Appeals linked to Extreme Weather, 2000-2021.
  • The figure on fivefold increase in climate disasters is according to the World Meteorological Organization (WMO) Atlas of Mortality and Economic Losses from Weather, Climate and Water Extremes (1970–2019) (WMO-No. 1267), Geneva.
  • The sum of cumulative carbon emissions of the 10 climate hotspots for 2020 is 0.002 trillion tons of carbon – that is 0.13% of the world emissions (1.69 trillion tons of carbon) in same year. Source Our World in Data.
  • The sum of cumulative carbon emissions of the G20 countries for 2020 is 1.299570755 trillion tons of carbon, which is 76.60% of global carbon emissions (1.696524177 trillion tons). Source Our World in Data.
  • The rank of 10 climate hotspots is 34% according to calculations of percentiles of the Notre Dame Global Adaptation Initiative (ND-GAIN) index scores of the 10 climate hotspots. ND-GAIN scores for 2020 retrieved from the ND-GAIN website.
  • For the fossil fuel industry’s daily average of $2.8 billion in profits over the last 50 years, which is also an annual average of $1.022 trillion, we used this 2022 article from the Guardian: Revealed: oil sector’s ‘staggering’ $3bn-a-day profits for last 50 years. Based on the daily average, we calculated that less than 18 days of company profits would cover the full UN global humanitarian appeal for 2022 of $48.82 billion. We used the annual average of $1 trillion to calculate the returns from an extra 1% tax on fossil fuel profits ($10 billion).  The Guardian (2022). Revealed: oil sector’s ‘staggering’ $3bn-a-day profits for last 50 years.
  • UN humanitarian appeal for 2022 is found at https://fts.unocha.org/appeals/overview/2022, last visited 30 August 2022. The food security portion of the appeal is $15.9 billion, of which $10.4 billion is unfunded as of 8 September 2022.

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Oxfam Ireland's Recommendations for Budget 2023

Irish wealth tax and broad windfall tax could yield billions per year, enough to help address cost of living crisis and keep overseas aid commitments

Oxfam Ireland calls for Budget 2023 to tackle poverty and rising inequality in Ireland and across the world

The introduction of an Irish wealth tax as well as a broad-based windfall tax across all industries generating extreme excess profits, not just the energy sector, could generate billions in new revenue, says Oxfam Ireland. An Irish wealth tax alone at low rates of 1.5% and 2% on levels of net-wealth greater than €5 million and €50 million respectively could yield €5 billion per year. Oxfam Ireland’s proposal for a broad-based windfall tax beyond the energy sector has been recommended by the IMF to help build social solidarity and address inequality. This revenue could cover vital budget contributions in Ireland to help address the cost-of-living crisis nationally as well as meeting life-saving commitments globally on Official Development Assistance (ODA) and climate finance.  

In their Pre-budget Submission, published today (01.09.22), Oxfam Ireland called on the Irish Government to deliver a Budget 2023 that addresses both national and global issues, including by tackling rising inequality. 

Speaking on the submission’s launch, Chief Executive Jim Clarken said: “As Ireland continues to address the economic fallout of COVID-19 as well as the ongoing impact of the climate crisis and the conflict in Ukraine at home and across Europe, it has never been more imperative to think and act like global citizens and deliver a budget that demonstrates this kind of solidarity.

“Two years on from the beginning of a global pandemic and in the middle of a global food and cost of living crisis, people are facing impossible situations, at home and across the world. These crises are not one-off events, nor are they outside of our control – they are driven by global inequality which is rising in every way, including across wealth, income, gender and race. 

“Our call for a wealth tax and a broad windfall tax could tackle the extreme rise in inequality we’ve witnessed over the last two years – where billionaire wealth soared and food and energy companies’ profits skyrocketed while decades of progress on ending extreme poverty were reversed and millions of people face hunger and destitution.”

Oxfam is also calling on the Irish Government to effectively tackle the climate crisis by addressing extreme carbon inequality where the top 10% of the Irish population by income levels emit nearly as much as the bottom 50%. The development organisation is urging the Irish Government to implement measures targeting excessive and luxury emissions and ending subsidies for high emitting sectors, enabling those who contribute most to climate change to take responsibility for addressing the issue. 

Clarken continued: “Budget 2023 is an opportunity to create a fairer, more sustainable and human economy – one that recognises the significant threat our planet is facing and the deadly impact this is already having on the world’s poorest and most vulnerable.

“Right now, one third of Pakistan – a country that contributes less than 1 percent of global greenhouse gas emissions – is under water. While across drought-ravaged Ethiopia, Kenya and Somalia, 22 million people are facing crisis levels of hunger. The collective carbon emissions of these three countries are 0.1 percent of the global total.

“It’s clear that we’re long past the time for talking and instead need to take radical action. This includes introducing policy measures that target excessive and luxury emissions, for example private jets. It’s preposterous that the super-rich continue to prioritise convenience and indulgence over investment in righting the wrong they’ve most contributed to.

“As well as working to reduce carbon emissions at home, Budget 2023 needs to see an increase in both the quantity and quality of climate finance to those countries hit hardest by extreme weather and disasters.”

Among Oxfam Ireland’s pre-budget asks, the following are priority in addressing global poverty and inequality:

  • Increase Ireland’s ODA budget in Budget 2023 by €233m and set us on a path to reach the target of 0.7% of Gross National Income spent on ODA by 2030.
  • Support immediate cancellation of 2022 and 2023 debt and interest payments for all low and middle-income countries so that they can recover from the deadly threat of Covid-19, climate and conflict. 
  • Introduce a Wealth Tax and Windfall Tax to fund measures to help address inequality and poverty in Ireland and globally
  • Ensure climate action addresses extreme carbon inequality by targeting excessive and luxury emissions, ending subsidies for high emitting sectors and implementing a comprehensive just transition process. 
  • Increase Ireland’s climate finance contribution to ensure that Ireland is contributing its fair share, which we estimate would be between €340m to €840m per year taking past emissions and wealth into account.
  • Increase resources and personnel to the Irish Refugee Protection Programme to ensure that Ireland meets its resettlement pledges, especially given the number of conflicts and crises worldwide forcing millions to flee. 

Download the full pre-budget submission here.

ENDS

CONTACT: Alice Dawson Lyons | alice.dawsonlyons@oxfam.org | +353 (0) 83 198 1869

Notes to the Editor:

  • Download Oxfam Ireland’s full pre-budget submission here.
  • Oxfam Ireland is proposing that a windfall tax be levied on extreme excess profits in large companies. Regulators should be tasked with imposing fines or other relevant measures to prevent windfall taxes being passed on to consumers, as is the case with the Spanish and Italian model of windfall taxes. In 2021 the IMF supported broad based windfall taxes on excess profits to help build social solidarity and tackle inequality- see here and here.
  • Details of Oxfam Ireland’s Wealth Tax proposal can be found in their submission to the Commission on Taxation and Welfare.

 

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