Polluter-Pay Principle Should Apply to Compensation for Victims of Climate Disasters
As Hurricane Florence battered the east coast of the United States of America and Super Typhoon Mangkhut hit Philippines and China, an important scientific breakthrough took place.
Previously, scientists have taken weeks to assess the contribution of global warming to extreme weather events such as storms, droughts, and heat waves. This time, a study emerged as the storms were gathering and even before they made landfall.
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It estimated that Hurricane Florence carried up to 50% more water (which led to extreme rainfall and flooding) than it would have done without human influence on the climate. Experts say with increasing confidence that climate change makes storms wetter and fiercer.
In many cases the damage caused by such events is non-linear, in that it is the extra severity due to climate change that causes most of the damage, like the proverbial straw that breaks the camel’s back. We now have unequivocal scientific proof that human-induced climate change is causing loss and damage to lives, property, and livelihoods here and now.
This is significant in the context of the ongoing negotiations under the United Nations Framework Convention on Climate Change (UNFCCC), where the discussions on loss and damage under the Warsaw International Mechanism (WIM) and Article 8 of the Paris Agreement have stalled.
The main issue for discussion is financial support for the victims of climate impacts. Developed countries have promoted insurance against these risks but proved unwilling to consider other solutions. While insurance can certainly play a role and there are several pilot programs going on around the world, it is no panacea. It is particularly unsuitable for the poorest and most vulnerable communities, which cannot afford to pay off the insurance premiums, even if they are subsidized.
Hence the time has come to think about raising money to compensate victims of climate change through innovative sources, applying the “polluter pays” principle wherever possible. A global fund does not require developed countries to accept liability, but could be based on solidarity contributions or a tax levied on polluters.
There are already several examples of this approach. One is the International Oil Pollution Compensation Fund (IOPCF), which gets contributions from all the international oil tanker companies and then makes payouts to any coastal community that is affected by an oil spill, regardless of which ship caused the spill. The scheme applies the principle of compensation based on collective liability of all the companies, rather than individual liability of a single company.
The concept of a tax or levy on individuals has also been adopted by the Government of France, through its solidarity tax on aeroplane tickets. The airline collects the tax from the passenger and gives the money to the government to use for its development assistance programs. This tax has raised over a billion euros.
The least developed countries (LDC) group tabled a proposal at the UNFCCC a few years ago for an International Air Passenger Adaptation Levy (IAPAL) which would collect a few dollars per ticket from every international air ticket for the Adaptation Fund. This proposal did not get off the ground at the time, but has not died. It could be revived in the context of loss and damage and made into an International Air Passenger Loss and Damage Levy (IAPLDL).
Finally, there are proposals from civil society to impose a loss and damage levy on the profits of the major fossil fuel companies, which would raise many billions of dollars a year to compensate the victims of climate change. Although this may seem difficult and far-fetched now, with the plethora of criminal liability court cases being filed around the world against fossil fuel companies there may well come a time when a court will hold a company liable and order it to pay compensation.
As the evidence linking extreme weather damage to climate change mounts, there is no excuse for delay.
Saleemul Huq is director of the International Centre for Climate Change and Development at Independent University, Bangladesh