Britain accused of 'double counting' over climate aid to Bangladesh

£60m fund promised for sea defences and farmland protection will not be new money but come from existing aid budgets
David Adam and John Vidal
guardian.co.uk, Monday 13 July 2009 12.14 BST

A flagship British government fund to help victims of global warming in Bangladesh will break a pledge to supply climate funds on top of existing overseas aid, the Guardian has learned.
The £60m promised by the government to help the country protect its people from rising sea levels will have to be found from existing budgets inside the Department for International Development (Dfid).
The Guardian has also discovered that several million pounds will never reach its intended recipients; instead it will go to the World Bank, which will administer the fund. Leaked documents show that $8m (£4.9m) will be "executed by the World Bank, as administrator". The bank needs the money to cover the costs of administration, project appraisal and capacity building, as well as a management team in the bank's office in the Bangladeshi capital, Dhaka, says the document.
The disclosure comes after a speech last month by Gordon Brown in which he called on rich countries to hand over up to $100bn each year to help the developing world cope with climate change. Brown stressed that such funding should be on top of development spending. He said the UK would contribute its "fair share to climate financing separately from and additional to our promises on aid". Green and development campaigners had praised the commitment to provide extra funds. Separately, Britain and other rich countries have pledged to raise overseas development aid (ODA) to 0.7% of GDP.
The issue of climate finance is key to the chances of a new global treaty on global warming being agreed at crucial UN talks in Copenhagen in December. China and other developing nations have asked for 1% of GDP from rich countries in the form of climate aid, in exchange for their involvement in such a deal. British officials privately dismiss the figure as unrealistic.
Sources in the Bangladesh government said they were "concerned" by Britain's move on the so-called Multi-Donor Trust Fund for Climate Change (MDTF) because they had expected the cash to be additional. "We expected this [climate change aid] to be free of the commitments the UK has already made," one said.
"The UK is very good at double counting. Although the money is new in the sense that this is the first time that money has been allocated for climate change, it's not new aid money," said Saleemul Huq, senior fellow at the London-based International Institute for Environment and Development.
Development charities said they were unhappy about the role of the World Bank in the multi-donor fund. Daleep Mukarji, director of Christian Aid, said he was "appalled by the prospect of the World Bank diverting more than $8m from a fund created to help Bangladesh". He said: "The money is urgently needed by poor people struggling with devastating cyclones, flooding and rising sea levels. For it to be devoted to the expensive administration services of the World Bank, even in Dhaka, would be scandalous."
A group of 30 British and Bangladeshi campaign groups has suggested an alternative mechanism, under which Bangladesh would distribute all of the money through a national board.
A Dfid spokesman confirmed that the £60m Britain would pay into the fund was from existing aid budgets. He said: "I can't see that this contradicts anything that the prime minister said." Brown said that, while the bulk of climate finance should be additional money, some 10% could come from within existing commitments.