In an announcement at the annual UN General Assembly, Denmark pledged US$13 million to assist vulnerable countries that have suffered ‘loss and damage’ from climate change. It marks the first time in UN history that a wealthy member state has committed compensation for the consequences of emissions in the developing world, which bears the brunt of the effects of climate change despite contributing little to the crisis.
It's sparked a debate and a heavy, perhaps unanswerable question: when climate disasters strike in a developing country, who should pay for the damages? For Bernadette Howlett, Palladium Managing Director, it's indicative of it being time to start taking accountability for finding solutions everywhere. “We cannot solve the global climate and economic inclusiveness changes facing us globally if we only fix our own backyards. What good is it to get Europe to net zero if Asia isn’t there? We need to help each other.”
Pakistan recently experienced some of the worst flooding in history, exacerbated largely by climate change, but the country has done very little to contribute to the climate crisis and global greenhouse gas emissions. As Pakistan continues to clean up, some advocates are calling for the developed world to contribute monetarily.
For Elmedina Krilašević, Palladium Senior Technical Advisor for Climate, Environment and Natural Resources, it’s a topic she expects will be hotly discussed at COP27. “After Denmark’s pledge at the General Assembly, it would be reasonable to expect that we could see more of these pledges at COP27,” she says. Climate justice is tied closely to climate finance, and she’s reminded of the massive pledge made at COP15 in 2009 for developed nations to channel US$100 billion a year by 2020 to developing countries to help them adapt to climate change and mitigate further rises in temperature.
At COP21, the goal was extended to 2025 and as of 2020, only about US$83 billion total had been mobilised.
“We can’t stop the effects of climate change, it’s too late for that, so how can we support those who aren’t responsible for climate change but are feeling the effects the hardest?” Krilašević asks. At last year’s COP26, Scotland promised US$2.7 million as a one-off payment for loss and damages, hoping to inspire other countries may do the same, and do so more generously, but none did.
"We need trillions of dollars flowing annually to sustainable businesses and activities that preserve and restore natural capital.”
A recent call from an alliance of 46 countries known as the Least Developed Countries asked that the creation of a financial mechanism for loss and damage be a fundamental priority for COP27. “With regard to loss and damage, the fundamental priority is to secure new and additional financing to deal with it. The Glasgow Dialogue must lead to the establishment of a dedicated financing mechanism, and the financing of loss and damage must be considered as an independent element in the New Collective Quantified Goal on climate finance,” noted Abdou Karim Sall, Senegal’s Minister of Environment and Sustainable Development.
Krilašević points out that climate finance doesn’t necessarily mean a fund; it could be a financing mechanism or providing capital for nature based solutions and businesses. “Many great and successful examples of nature based projects and business models exist,” she explains. “For example, restorative agricultural practices that increase yield while also benefiting local biodiversity; or mangrove forests that act as a significant carbon sink while protecting local people's infrastructure from the effects of storms and hurricanes and increase food security as fish and other aquatic life nurseries.”
“However, such solutions must be mainstreamed into economic development planning, policies, and finance to scale up. To achieve climate mitigation and adaptation, we need to develop the market for nature based solutions and we need trillions of dollars flowing annually to sustainable businesses and activities that preserve and restore natural capital,” she adds.
But the key is and will continue to be the flow of capital to these developing and vulnerable countries. “A continuous flow of finance is one of the objectives of the Paris Agreement and a vital element in the fight against climate change,” said Madeleine Diouf Sarr, the Chair of the Least Developed Countries Group in the climate negotiations. “Developed countries must make up the shortfall in delivering the agreed $100 billion in climate finance annually. And at COP27, as deliberations on the new climate finance goal continue, we must ensure that the next goal is based on science and reflects the full needs of our countries.”
While some may take last year’s lacklustre response to Scotland’s loss and damages payment as a poor indication of what’s to come at COP27, others remain hopeful. “COP27 in particular has been described as an ‘implementation summit’ taking on those target confirmations from COP26 and seeing if the (non-fossil powered) rubber is hitting the road,” adds Anthony Carrigan, CEO of Palladium partner Kyeema Foundation.
“Given it will be held on the continent of Africa, one that has arguably contributed the least to climate change being responsible for less than 3% of global carbon dioxide emissions, there will no doubt be a welcome discussion about climate financing and the flow of funding to redress the impact of global warming on the most vulnerable.”
He adds that he expects that the outcomes from the rules around carbon credits established at COP26 will be examined and likely augmented further at COP27 or shortly thereafter, creating and further cementing innovative funding mechanisms for nature based solutions that can support the most vulnerable places in both the fight against climate change and transitions to more sustainable economies.
For more, read 'We Have to Have Real Plans: Palladium Employees Share their Hopes for COP27' or contact firstname.lastname@example.org.