EU aims to raid aid budgets for climate deal: Oxfam

Anti-poverty campaign group Oxfam accused European politicians on Sunday of planning to "cannibalise" existing development aid budgets and repackage them as part of a deal to fight climate change.

Oxfam said it had found evidence that exposed "undercover accounting" in some rich nations' pledges to help poor nations to tackle the climate threat.

But Sweden, holder of the rotating European Union presidency, denied the charges made the day before a UN summit starts in Copenhagen on negotiating a new global deal to combat climate-warming emissions.

"What is new and additional money is not always clear cut, but many countries, my own included, have foreseen and planned for Copenhagen, and the money is already in state budgets," Sweden's chief climate negotiator Anders Turesson told Reuters.

Finance has emerged as one of the key obstacles in the talks to replace the Kyoto Protocol, the UN's main tool for dealing with global warming which expires in 2012.

Developing nations want billions of dollars a year to help them adapt to a problem they say was initially caused by industrialised countries. The EU says poor countries will need around €100 billion ($150 billion) a year by 2020, of which as much as half would come from the public purse globally.

But it has also proposed up to $10 billion a year of "fast start" funding in the three years before any Copenhagen deal kicks in. The United States has embraced the idea of early funding, but has been less forthcoming on long-term aid.

"The financial support — short or long term — is probably the most important bargaining chip that developed countries have at their disposal when seeking a comprehensive global agreement," said an informal paper by the Swedish EU presidency.

"For fast-start actions, existing funds should be used," added the document, seen by Reuters.

Oxfam said the mention of using existing funds showed politicians were considering taking funds that have already been earmarked for schools and hospitals, and presenting them as new money to tackle climate change.

Such funds might be used to develop drought-resistant crops, build dams to control dwindling water supplies, or be spent on flood protection.

"We have been watching global negotiations over climate finance for months, and it now seems clear that pledges of fast-start money will involve cannibalising existing promises of overseas aid," said Oxfam campaigner Tim Gore.

"This undercover accounting is an attempt to win the support of developing countries for a deal in Copenhagen, which distracts attention from the big long-term commitments of real money that poor countries need," he added.

But Turesson said the text referred to funds that have been built up in anticipation of Copenhagen and the channels that will be used to deliver it, such as the World Bank.

"If the money is to be on the table on January 1, 2010, it must already be in state budgets," he said. "And the very nature of fast-start financing requires existing institutions."

Oxfam estimates that poor countries need to be given $200 billion a year of new public finance by 2020 — on top of existing aid pledges — a figure which is far higher than the EU''s estimate of €22-50 billion.

The document, called "Structure and Elements of a Copenhagen Outcome", was circulated among EU climate experts on Thursday.