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Rich Countries Fail to Show Up for Climate Loss and Damage Dialogue

Julien Mulliez-DFID/flickr

The countries on the front lines of climate change came away disappointed at the end of the two-day Suva Expert Dialogue last Thursday, as most rich nations simply failed to show up for discussions on what they can do to help the most vulnerable address the physical and financial impacts they face.

The discussion of loss and damage ultimately comes down to financial support, with a new report by the Heinrich Böll Foundation’s Julie-Anne Richards and Liane Schalatek placing [1] the need for that support at US$50 billion per year by 2020 and at least $300 billion per year by 2030. “What stands out most clearly is that there isn’t currently enough funding to even begin thinking about financing loss and damage, with available climate, development, risk reduction, and disaster recovery financing all falling short by an order of magnitude,” they wrote, in a report released last week during mid-year climate talks in Bonn.

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But when the UN-hosted conference designated time to discuss loss and damage, “delegates noticed that Germany was the only developed economy to speak over the two days,” Climate Home News reports [3]. Harjeet Singh, ActionAid’s global lead on climate change, said the only other major economies in the room were Brazil, India, and South Africa.

And even Germany’s participation focused on the use of private insurance to cover the unavoidable, often unpredictable costs that small island states and other front-line countries face in a crisis they played virtually no part in bringing about. “Insurance is a solution proposed by the biggest historical polluters in rich countries as an alternative to direct compensation, which they have fought to have excluded from the discussions,” Climate Home explains. “Developing countries’ main problem with insurance is that it is often too expensive.”

Last week, Singh and Richards both pushed back on Germany’s portrayal of insurance as a “magic tool” to address climate change damage. “Developed countries have this idea that they can perform magic,” Richards said, even though a focus on insurance transfers risk “from rich to poor people”. Singh warned countries “not to overhype insurance as a silver bullet that will solve all our problems”, adding that “the dialogue gives a very clear mandate that we need money.”

In a post published on Climate Home last Tuesday, in the lead-up to the Suva Expert Dialogue, senior representatives of four front-line countries asked when the world’s polluters plan to start paying for the mess they’ve made.

“A few months ago, Hurricane Maria caused economic losses and damages of 226% of Dominica’s GDP,” wrote [4] Dominica’s Joseph Isaac, Seychelles’ Ronny Jumeau, Bangladesh’s Anisul Islam Mahmud, and Vanuatu’s Ralph Regenvanu. “Only two years before, Tropical Storm Erika cost Dominica 90% of GDP, and Tropical Cyclone Pam battered Vanuatu, costing 64% of Vanuatu’s GDP. Last year Bangladesh suffered the worst flooding in a century covering one-third of the country and affecting 11 million people, and in 2007 and 2009 Tropical Cyclones Sidr and Aila devastated Bangladesh. High coastal tides have reached deep inland in the Seychelles, threatening its economic livelihood.”

While the four countries “are endeavouring to waterproof our livelihoods and societies,” the authors noted, “to do so will cost more than 100% of our GDP. We cannot do so overnight, and yet each day takes us closer to the next hurricane, cyclone, or monsoon. Climate change is relentless for us.” International delegates embraced the polluter-pay principle and expressed a degree of international solidarity when they adopted the Warsaw International Mechanism for Loss and Damage in 2013, then enshrined it in the Paris agreement two years later. “But five years on from Warsaw and two and a half years on from Paris,” they wrote, “the resources currently available are no match for the costs. To ration them, these resources are made difficult, costly and slow to access. Monumental disasters require immediate responses, not pledges that take years to deliver.”

The four officials stressed that “it is not only unjust that we should pay the costs of loss and damage from a climate change we did not cause, this very iniquity is a force behind climate change. As long as those who profit from the production of greenhouse gases are not those who suffer its most extreme consequences, climate change will accelerate. Soon the whole world will be affected, but soon it will be too late.”

They called for scaled-up financing through a climate damages tax on fossil fuel extraction or consumption, on the principle that “the perpetrators, not the victims, must pay.”

In the lead-up to the Suva Expert Dialogue, Climate Action Network-International published [5] a four-part series on loss and damage in its daily conference newsletter, ECO. It cautioned that the Warsaw International Mechanism, with its focus on loss and damage finance, might itself be “lost and damaged”, stressing that a role for private insurance “should not be confused with finance. In fact, insurance is something that requires finance; it demands premium coverage for poor and vulnerable people and countries. Otherwise, it pushes the responsibility for dealing with the worst climate impacts onto those who did not cause climate change.”

A separate story [6] pointed to fundamental drawbacks in relying on insurance funding for loss and damage recovery: it only covered between 0.9 and 28% of actual humanitarian needs (with a stunning average of only 8.43%) in eight recent climate disasters, doesn’t always respond as quickly as humanitarian aid, provides questionable financial security after a disaster occurs, and “is inherently expensive, so can only be cost-effective for relatively infrequent disasters (even the World Bank admits that ‘catastrophe risk pools cannot make insurance cheap’). It also cannot cover the slow-onset impacts of climate change like sea level rise and ocean acidification, which are certainties, not risks.”

ECO also inventoried [7] the horrific human impacts in a single year of climate disasters when average global warming “only” stood at 1.0°C.

Climate Analytics looked at the challenges countries face when they try to recover from climate-related loss and damage, using a case study of the devastation [8] Antigua and Barbuda faced after Hurricane Irma displaced its entire population and obliterated more than 90% of its infrastructure in 2017.

“Government-led recovery efforts were also slowed by a desire to rebuild in a more climate-resilient manner, rather than going back to business as usual,” wrote [9] analysts Olivia Serdeczny, Inga Menke, and Adelle Thomas. “This approach required more financial resources than the government had available, while the already high national debt disincentivized additional international borrowing of the more than US$200 million needed to rebuild. Debt relief, international aid, and attracting private investment to the island are viewed as the most feasible options for Barbuda’s recovery. However, this approach may lead to a loss of the traditional collective ownership of land that has been in practice on the island since abolition of slavery in 1830.”

On the same day that the Suva dialogue got under way, UN climate secretary Patricia Espinosa warned [10] Bonn delegates that current low levels of climate finance risk “global destabilization” due to mounting storms, droughts, and floods. The funding needs now being calculated for loss and damage are in addition to the US$100 billion per year by 2020 that developed countries promised for international climate finance when they met in Copenhagen in 2009.

“Trying to address climate change at current financing levels is like walking into a Category 5 hurricane protected by only an umbrella,” Espinosa said. “Right now, we are talking in millions and billions of dollars when we should be speaking in trillions,” she added, at a time when “the impacts of extreme weather are already creating chaos.”

Oxfam reported [11] that rich countries’ international climate finance commitments for climate change mitigation and adaptation stand at less than 50% of their Copenhagen promise—and that much of the money is coming from the private sector, or from government aid not directly related to climate change.

“The aid organization found that only $16 to $21 billion of the overseas aid commitments fell under the strict definition of climate finance—if what was counted was just assistance directed towards reductions in greenhouse gas emissions and towards adaptations for climate change effects, rather than economic and social development more generally,” The Guardian notes.