By Hope Steadman (she / her)
It was reported in July of this year that previously agreed climate funding goals had not been met (Abnett, 2022). In 2009, richer developed countries promised to pay $100 billion every year to countries experiencing the devastating impacts of climate change, such as rising sea levels and extreme weather events. However the OECD found that in 2020, only $83.3billion was provided (ibid). Failure to meet targets continues to be unsurprising, with the impacts of COVID and the war in Ukraine causing economic turmoil and unpredictability worldwide. But it arguably left a bad taste in peoples’ mouths ahead of COP27 this week.
The idea of ‘loss and damage’ caused by climate change was mentioned within the 2015 Paris Agreement, identifying the impacts of global warming on human wellbeing, health and everyday lives. But there was little clarity over what that meant for the funding to cover the extent of this damage. Sadly, COP26 did very little to move this issue forward. Developing countries called for a ‘loss and damage’ fund to be set up but this was resisted, particularly by the US.
It is unsurprising that developing countries are calling for this fund, with the most significant losses being experienced in the global South. Take the recent record-breaking floods in Pakistan, for example, where 33 million people have been impacted (Red Cross, 2022). Pakistan has seen continuous rainfall for two months, with recorded amounts 3 times higher than average (ibid). Extreme heat of up to 49 degrees exacerbated the problem by melting the glaciers feeding into nearby rivers (ibid). Who pays for the resultant shelter, food, water, medicine and care needed in Pakistan?
In past climate talks, the ‘polluter pays’ principle has informed a lot of the approaches we’re seeing come out this week. Richer developed countries are said to be the highest polluters, due to heavy industrialisation leading to more carbon dioxide and other emissions being released into the atmosphere. Meanwhile, private sector involvement in developing countries continues to be unequal, with banks charging significantly higher interest for infrastructural projects in the global South and making it difficult for capital projects to take shape.
In short, the richest, including the private and public sectors, are seen as most responsible for the impacts of climate change, and most able to financially cover the costs of the damage caused by extreme climate events and the infrastructure needed to reduce emissions. Meanwhile, the poorest suffer the biggest effects of climate events, and don’t have the funds available to make meaningful change. Excusing the huge generalisations made here, this shows how the UN ‘response fund’, ‘climate fund’ or ‘loss and damage’ fund has come to be proposed this year.
According to a report published just ahead of COP27, about $2 trillion will be needed to enable developing countries to both cut their emissions and respond to the effects of climate change (Harvey, 2022). Aside from the UN fund, there will need to be significant investment from the private sector, reforms in financial institutions and quite likely a need to divert investment into technologies like renewables and carbon sequestration.
While it’s still early on in the COP27 event, there is some clarity still needed as to where the money for a loss and damage fund will come from. On the 6th November, Dickie and Abnett (2022) reported that:
“So far, only two small countries have offered funding for loss and damage. Denmark committed 100 million Danish crowns, and Scotland pledged £2 million ($2.28 million). By comparison, some research suggests climate-linked losses could reach $580 billion per year by 2030.”
Denmark and Glasgow are beginning to diffuse the cloud of scepticism overhanging COP27, and it was reported shortly afterwards that Austria, Belgium, New Zealand and Germany have also committed millions more. It’s probable more countries will have committed funds by the time of publishing. The leadership shown here is perhaps a sign to be more optimistic about this COP than the last one. As one of the ‘early adopters’ of the fund, Scotland continues to be considered a ‘world leader’ in addressing climate change. For example, within the country, the output of energy from renewables has tripled in the last ten years, with 26.7% of all of Scotland's energy consumption coming from renewables in 2020 (BBC News, 2022).
Unfortunately neighbouring England doesn’t seem to be quite so well regarded. Rishi Sunak first appeared not to be attending COP27 at all, being ‘too busy’ with the domestic situation. The narrative then changed a matter of days later, when it seems the media department caught wind of public opinion. Appearing in Egypt for his speech, dragged kicking and screaming apparently, he has already come across in the media as lacklustre and listless, and seems to have been out-done in speech-making ability by none other than Boris Johnson.
The opposing Labour party in the UK continues to criticise the Conservative government for its severe lack of climate leadership, and this extends to COP27 itself. Greta Thunberg has decided not to attend this year, criticising the COP events as ‘greenwashing’ and an excuse for countries to make only slow and gradual progress, while congratulating themselves and grabbing media attention (Bourke, 2022). Let’s see if Rishi and others can turn opinions around over the coming days.
Nonetheless, after hard-fought conversations over the weekend, it is incredibly good news that loss and damage is officially being talked about. A number of schemes are apparently in conversation. Alongside a UN ‘response fund’ for countries hit by disasters are approaches looking outside of the sometimes slow and bureaucratic nature of UN negotiations. For example, Dickie and Abnett (2022) report that “The "V20" group of 58 climate-vulnerable countries and the Group of 7 rich nations will launch a "Global Shield" to strengthen insurance and disaster protection finance.” It is already expected that Germany will provide money for the scheme.
The US are also said to be open to negotiating the loss and damage fund. At COP27, the US has been called out for using their huge economic and political power to block progress on setting such a fund up. Harjeet Singh (senior advisor for the Climate Action Network) said:
“The US has for decades acted in bad faith with regards to loss and damage, but the delays and deception have real life consequences. We need to agree on a funding facility at this COP so we can work on making it operational by 2024, and the US needs to change from being obstructive to constructive.” (The Guardian, 2022)
While it is hugely positive that the US now has the climate fund on their agenda, reports suggest they are pushing for another 2 years of discussion and negotiation before committing. Greta Thurnberg’s theory of ‘COP as delay tactic’ comes through clearly here. Rachel Rose Jackson from the Union of Concerned Scientists said that this delay would be a “severe, unjust blow for those suffering the worst effects of the climate crisis” (ibid).
Impassioned speeches like this one in the last few days show the importance of this fund. José Maria Neves, who represents the volcanic island state of Cabo Verde, said that while the island has contributed “almost nothing” to climate change, it has “suffered greatly from the consequences of climate change, jeopardising the years of progress we have made towards sustainable development.” He continued “for small island developing states such as Cabo Verde, it is essential that they should be able to access global financing” (The Guardian, 2022).
The battle continues to be hard-fought, with activists, scientists and world-leaders alike fighting for the climate fund to be a successful outcome of this year’s COP. Ursula von der Leyen, president of the European Commission, called on the global North to step up to the job in her speech, and encouraged those in attendance to try and convince others to contribute.
So, it seems finance is still top of the list of things to talk about this year, from both leaders in the global North and the global South. The coming days will determine how much the climate fund’s piggy bank increases, and whether previous delay tactics and ‘greenwashing’ come to characterise another year of COP.
Abnett, K. (2022) “Rich countries failed to meet their climate funding goal”, Reuters, 29 July [online] Available at: https://www.reuters.com/business/environment/rich-countries-failed-meet-their-climate-funding-goal-2022-07-29/ [Accessed 8 November 2022]
BBC News (2022) “COP27: Is Scotland still leading the way on climate change?”, BBC News, 7 November [online] Available at: https://www.bbc.co.uk/news/uk-scotland-57970435 [Accessed 8 November 2022]
Bourke, I. (2022) “Greta Thunberg on why Cop27 is a “scam””, The New Statesman, 2 November [online] Available at: https://www.newstatesman.com/environment/2022/11/greta-thunberg-cop27-is-a-scam [Accessed 8 November 2022]
Dickie, G. and Abnett, K. (2022) “COP27 kicks off with deal to discuss climate compensation”, Reuters, 6 November [online] Available at: https://www.reuters.com/business/cop/cop27-summit-begin-with-plea-discuss-climate-compensation-2022-11-06/ [Accessed 8 November 2022]
Harvey, F. (2022) “Developing countries ‘will need $2tn a year in climate funding by 2030’”, The Guardian, 8 November [online] Available at: https://www.theguardian.com/environment/2022/nov/08/developing-countries-climate-crisis-funding-2030-report-nicholas-stern [Accessed 8 November 2022]
Red Cross (2022) “Flooding in Pakistan: the latest news” [online] Available at: https://www.redcross.org.uk/stories/disasters-and-emergencies/world/climate-change-and-pakistan-flooding-affecting-millions [Accessed 8 November 2022]
The Guardian (2022) “Cop27: Ukraine president says peace is vital for saving climate; US called out for blocking ‘loss and damage’ funds – live”, The Guardian, 8 November [online] Available at: https://www.theguardian.com/environment/live/2022/nov/08/cop27-un-climate-conference-day-two-crisis-live[Accessed 8 November 2022]
A variety of articles exploring what you need to know about key subjects, all linked to climate change