After days of intense negotiations in Sharm el-Sheikh, countries at the latest UN Climate Change Conference, COP27, reached agreement on an outcome that established a funding mechanism to compensate vulnerable nations for ‘loss and damage’ from climate-induced disasters. 20 November 2022 Credit: United Nations
By Inge Kaul
BERLIN, Nov 29 2022 – For decades, there have been non-conclusive deliberations regarding how the international community could support poor and vulnerable countries in their efforts to cope with and recover from the havoc wreaked on their territory by the ill-effects of global warming such as severe droughts, floods, storms, or rising sea levels.
At the COP27 climate summit, this issue figured for the first time as a separate item on the agenda; and, as one of their very last-minute decisions, delegations even agreed to establish a dedicated loss and damage fund (LDF). However, the question of how to operationalize, notably resource the fund was left open.
A “transitional committee” is to be created to examine possible funding options and report to COP28, which could then, eventually, decide on the LDF’s operationalization.
Remembering the many press photos showing the despair written into the faces of people, whose houses and fields were destroyed by floods, or the blank stares of those sitting next to the cadavers of their cattle killed by severe drought conditions,
I feel that business as usual—namely, taking it easy in delivering on funding promises (as we have seen it in the case of the $ 100 billion annual climate-finance promise) — would be an extremely immoral and unethical behavior in the present case.
Therefore, let’s waste no time and start to explore where one could find money fit for the purpose of loss and damage support.
In the following, I argue that only one – still to be established – source will generate on a relatively reliable and predictable manner the longer-term stream of public finance required, as a minimum, for creating a solid basis of LDF core funding.
The funding source to be agreed and established as a matter of highest urgency are UN assessed contributions for climate security.
Money fit for the purpose of loss and damage support
However, at the outset, it is perhaps important to clarify that support for loss and damage should not be confounded with humanitarian assistance delivered as a prompt crisis-response measure.
Disaster may strike countries haphazardly, irrespective of whether they are poor or rich, vulnerable or not. All countries may need or, at least, somehow benefit from immediate and fast-disbursing, short-term humanitarian assistance in cash or kind.
How best to organize such short-term humanitarian assistance is also an important issue that deserves more attention. However, it is an issue beyond the scope of this article.
Therefore, let’s now turn to the specific issue of what type of external support could be most useful for “climate victims”, notably poor and vulnerable countries struggling to rebuild their communities and economies.
An entity such as the newly established LDF and the money that, one day, it might have at its disposal, are governance tools. Like any other tools they should be fit for the purpose at hand.
Considering for now mainly the core funding that the LDF needs to have, it should perhaps have three key characteristics, namely be: (1) public finance; (2) patient, that is, designed for the longer-term; and (3) relatively predictable in its availability.
The reasons are that, typically, a country’s vulnerability to severe climate events is a complex multi-dimensional phenomenon to which both structural factors (e.g., the countries geographic position and size) and non-structural factors (such as its development level) contribute.
Thus, by implication, meaningful loss-and-damage support is likely to be required for several years, maybe, even for a decade or more. This should not come as a surprise, because even in developed countries rebuilding efforts have often been a lengthy process.
Moreover, in the case of small-island developing countries, it could even be that parts of the population need to be resettled to start their life anew.
Initially, patient, predictable public finance may constitute the most important source of funding. As the rebuilding process advances, the public funds could also play an important role in helping to mobilize other resource inflows, including private investments.
Or, they could be twinned with adaptation finance and other types of climate finance, as well as official development assistance.
Making the case for UN assessed contributions for climate-security, including loss and damage support
By now, there exists broad-based agreement that our security today depends on more than the security of our countries’ external borders and on more than the control of within-country conflicts and violence.
As US President Joe Biden, noted in his statement to COP27, military security today is only one dimension of our security, next to climate and food security; and, as COVID-19 taught us, next to global health security.
The security threats we are facing are global in their reach; they tie us together in a web of manifold interdependencies. They require all hands-on deck, or no one will be secure. The United Nations Secretary-General (UNSG) is, therefore, correct in pushing for a “Climate Solidarity Pact.”
Thus, it is timely to ask: Why do we have, within the UN, only an established system of assessed contributions to support efforts aimed at keeping and restoring military security? Why not also assessed contributions – a solidarity-based pact – to climate security?
Among the reasons that strongly speak for this financing option are several. First, such contributions could be introduced for, say, an initial period of 20 years, subject, of course, to regular monitoring of their functioning and impact.
Evidently, they would provide the type of reliable and predictable long-term public finance that the LDF needs.
Second, agreement on a UN funding scale for climate security would help end the present continuous tussle among countries over who should contribute how much. The UN assessment scale for determining individual countries’ contributions to climate security would be based on a joint decision by member states.
Besides income (capacity to pay) one would, in the present case, certainly also consider past and current per-capita emission levels and other relevant factors.
Many aspects of the proposed funding source still need further élaboration and consultations. However, let’s start at the beginning and encourage a world-wide dialogue on the pros and cons of the following issues.
Should we: (1) consider climate security, notably that of vulnerable countries, as a global security issue; and (2) grant climate security the same financing privilege that military security enjoys, namely, to benefit from assessed contributions paid by all UN member states according to a formula that aims at promoting climate security and justice?
Why not ?
Inge Kaul is a fellow at the Hertie School of Governance, Berlin, Germany.
IPS UN Bureau
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