One of the challenges to come out of last month’s Nairobi Environmental Conference on Climate Change was a push to limit the growth in oil subsidies that world producers continue to receive from Western financial interests. A U.S.-based environmental coalition that favors an end to oil subsidies contends that since 1992, the World Bank has provided more than five billion dollars in financial backing to the oil industry. Here in the United States, rights groups and environmental activists have been lobbying Congress and placing ads in financial publications asking the World Bank and the G-8 nations to end such subsidies. Scott Parkin is Global Finance Campaigner for the Rainforest Action Network, one of the coalition members. He laments that massive oil industry profits have far outweighed the benefits of G-8 debt cancellation that the group hopes could be used fight poverty in African countries
“Looking at Tanzania for instance, their oil imports have gone up almost three-hundred million dollars in the last four years while they’ve only had about one hundred and forty million dollars freed up from debt cancellation, so when you look at the books, it seems they’re still in the red,” said Parkin.
American environmentalists say they are working to end U.S. oil industry subsidies, which they claim have fueled global warming, raised dependence on oil, and promoted conflict and greater poverty around the world. Scott Parkin cites the example of Chad as a country whose revenues from an internationally subsidized oil pipeline project have caused an escalation of military spending at the expense of plowing back profits to alleviate widespread poverty.
“We saw that the President of Chad had entered into this deal with the World Bank to develop this pipeline with Exxon and once the oil began flowing and profits began going up, he kind of went back on his deal and began to spend some of that money on fueling an arms race and not applying it to alleviating poverty like he originally agreed. When the World Bank spoke up about this and objected, he threatened to cut off oil, and then they backed down. And so the poverty alleviation deal did not happen the way in which many had hoped,” he said.
The organizations that placed a full page ad in the Financial Times newspaper include the Rainforest Action Network, Jubilee USA, Oil Change International, Bank Information Center, Friends of the Earth, and Amazon Watch.
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