Who Will Pay for the Damage Done by Climate Change?

Recent Features

Features | Environment

Who Will Pay for the Damage Done by Climate Change?

No decisions made on who pays for climate damages as COP25 meeting comes to a close in Madrid.

Who Will Pay for the Damage Done by Climate Change?

A visitor attends the COP25 climate talks summit in Madrid, Spain, Thursday, Dec. 12, 2019.

Credit: AP Photo/Manu Fernandez

The 2019 United Nations Climate Change Conference, which ends today in Madrid, Spain, has struggled to get countries to decide in crucial negotiations that ought to serve as stepping stones for global climate efforts in the years to come.

This year’s conference, known as COP25, aims to complete negotiations on remaining outstanding issues, such as the rules for international carbon markets (Article 6), necessary for implementing the Paris Agreement that was agreed upon in 2015. The Paris Agreement will come fully into force at the next COP, scheduled to be held in 2020 in Glasgow, Scotland.

One key unresolved issue that has emerged in the ongoing negotiations focuses on trying to address climate-related loss and damage through an appropriate response system.

South Asia ranks among the world’s most vulnerable to the impacts of climate change. In the summer of 2019 alone, over 5 million people were displaced in India, Nepal, and Bangladesh during the monsoon, due to floods and landslides; heatwaves killed hundreds in India and Pakistan and also resulted in extreme droughts and water shortages that deprived millions of a secure supply of water.

One of the main discussions at this year’s COP has focused on the demand of many developing countries that a separate fund be set up for compensating victims of climate change. The push is being led by four sub-groups of the most vulnerable countries: the Least Developed Countries, the Alliance of Small Island States, the Latin American group, and the Africa Group of Negotiators.

But developed countries are not willing to classify loss and damage as a separate issue that needs climate financing.

A decision was to have been reached by the end of the first week of COP but countries have so far remain undecided on how loss and damage should be handled.

During negotiations, many delegates from countries that are facing the brunt of climate change, including from South Asia, have pointed out that not enough is being done.

“Study after study has shown that we are not on track to meet the Paris Agreement goal of keeping rise in temperatures to within 2 degree Celsius from pre-industrial times,” stated India’s lead negotiator, Ravishankar Prasad. “There is a significant gap in what is being done and what requires to be done.”

“But this crisis is because the gap was allowed to expand by the developed countries. They did not deliver on their emission reduction targets, they did not deliver on their commitments to transfer finance and technology to developing countries. And they are not on track to meet their targets even in the post-2020 Paris framework,” he said.

According to the Times of India, the country witnessed the highest number of climate deaths in 2018.

Although the UN has established funds dedicated to helping developing countries, they typically focus on adaptation.

Developed countries — that have historically played a greater role in worsening climate change conditions — do not want to set up another fund that deals with climate loss and damage, specifically, because it could imply liability for any and all damage after harsh climate conditions or an extreme weather event.

At present, all parties have agreed upon and acknowledged the need for “averting, minimizing, and addressing loss and damage.” Any liabilities or financial support to recover from loss and damage remain excluded.

The agreement also adopts the Warsaw International Mechanism for Loss and Damage, an institution that was set up in 2013 to classify, address, and share responsibility for loss in developing countries.

The framework was designed to aid victims in developing countries with technology, finance, and capacity-building following climate change-induced catastrophes — including both extreme weather conditions and longer term impacts of climate change.

Developing countries have, however, been open to and are encouraging discussions around insurance schemes as an acceptable mechanism to tackle loss and damage.

For instance a report by Development Asia, an initiative of the Asian Development Bank (ADB), noted that approximately 16,600 extreme hazard events were recorded globally between 1980 to 2015. While over 56 percent of these events were recorded in “high and upper middle income countries,” over 76 percent of fatalities were recorded in “lower middle and low income countries.”

Collectively, these events resulted in damages costing about $3.2 billion. Almost all insured losses were recorded in high and upper middle income countries.

“Pakistan has contributed less than 2 percent of global emissions but is amongst the countries that is being impacted the most,” says a delegate from Pakistan. “It is the responsibility of developed countries to compensate the victims in poorer countries in order to ensure equity and security.”

However, as the conference — hosting nearly 27,000 participants — closes, a conclusive decision has yet to be made on who will pay the cost of the damage climate change is causing.

“The main issues on COP25 agenda are all getting pushed to next June. It’s quite disappointing to see that countries are still not taking the climate crisis seriously,” says Lina Yasin, a youth activist attending COP. “Honestly, why did we even bother relocating to Madrid [after host Chile was forced to cancel]?”

Other critical issues that are still being negotiated include climate markets, which allow countries to offset their emissions by funding green projects elsewhere.

Existing carbon markets have been seen as controversial as most climate activists believe they only offer polluters an excuse to not have to reduce their emissions. While countries that are on the receiving end of climate change-induced disasters are demanding tighter rules be put in place for carbon markets, the world’s larger emitters, such as Saudi Arabia, are strictly in opposition of more restrictions. The result is an absence of decisive actions.

Patricia Espinosa, executive secretary of the United Nations Framework Convention on Climate Change within which the annual climate change conference are held, made a passionate appeal to ministers to make progress during the final days of the COP: “On both a professional and personal level, my message to you is this: We need your decisions. We need your leadership. We are out of time.”

Rabiya Jaffery is a freelance journalist covering climate, conflicts, and politics from the Middle East and South Asia. She tweets at @rabiyasdfghjkl.

Update: An earlier version of this article quoted an “expert” named “George Stacey.” The Diplomat learned after publication that “Stacey” does not exist and appears to be part of an elaborate effort to obscure the history and online presence of NorVergence, a New Jersey-based telecom accused of operating as a Ponzi scheme before declaring bankruptcy and whose owner is on trial for fraud, as exposed by The Philadelphia Inquirer in November 2021. The story’s author was not aware that “Stacey” was a fabricated persona. The Diplomat regrets printing the comments from “Stacey” and they have been removed from the article.