Paying for Climate Damages Isn’t Charity
Rich countries generally have the resources to weather these climate impacts. In the United States last year, 54 percent of disaster-related losses were insured, compared to just 3 percent on average in the world’s 77 poorest countries.
The United States and European Union have rejected or stalled on this kind of financial assistance, raising concerns that committing funds for climate loss and damage could seem like an admission of guilt, and open the door to a flood of lawsuits. But the 2015 Paris agreement should already have put that concern to rest, since it makes clear that “averting, minimizing and addressing” loss and damage “does not involve or provide a basis for any liability or compensation.”
Some developed countries claim that humanitarian aid already meets the need. It does not. Humanitarian aid provides immediate shelter and food relief after a disaster strikes, but is not available, for example, to the Fijian islander who must relocate because of rising seas, or the fisherman in Palau whose livelihood evaporates after tuna migrate to cooler waters.
The initial loss and damage commitments are politically important. Yet the need is exponentially greater — these costs worldwide could reach $290 billion to $580 billion in 2030, according to one estimate.
A new fund to hold parties responsible could change the lives of billions of people on the front lines of climate change, offering a path to recovery where none exists today. When a cyclone hits, a government could quickly apply for funding and distribute it to help people rebuild destroyed homes. For continuing issues like droughts, the money could help farmers diversify their skills when their original livelihoods are no longer viable. But it could also improve the lives of people in wealthy countries, by building resilience to global supply chains, by stabilizing the economies where their businesses import and export goods, by creating the conditions for a more peaceful world.
As Scotland’s first minister, Nicola Sturgeon, said this week at the conference, “Countries in the Global North that have caused climate change and have the greatest access to resources have an obligation to step up.”
Any more stonewalling by wealthy nations on finance for loss and damage could derail the entire climate negotiations here in Egypt. The world’s ability to tackle climate change hinges on trust between developed and developing countries, and without concrete progress to address these severe losses and damages, that trust risks being broken.