The most polluting countries still refuse to pay for climate damage

Although all countries in the world are exposed to the risks of climate change, the risks are not evenly distributed, warns a recent report by the Egyptian Initiative for Individual Rights.

The numbers are clear: countries that have contributed least to climate change will suffer the most. ‘Since 1991, 79 percent of deaths and 97 percent of deaths from extreme weather events have occurred in developing countries.

‘Without compensation, these people will not be able to rebuild their lives in a climate-adaptive way, so the gap between rich and poor continues to widen,’ says Care Nederland’s Rosa van Triel.

This is especially true for Africa. The entire continent contributes just 3.8 percent of global greenhouse gas emissions, but it is highly vulnerable to the effects of climate change. To close that gap, the Global South wants to see money. By putting climate finance and climate damage on the agenda of COP27, Egypt hopes to make progress in a debate held by the Global North since 1991.

At the Climate Conference in Copenhagen in 2009, the Global North pledged to contribute to climate adaptation (adaptation) and climate mitigation (prevention) in the Global South.

The agreement is to release more money until 2020 and then transfer $100 billion annually between 2020 and 2025. But according to data from the Organization for Economic Co-operation and Development (OECD), the global North structurally falls short of that goal.

The problem is that it is not clearly agreed which country is responsible for which part. ‘It makes it much easier for each country to put their own view on it.’

During the climate conferences in Copenhagen and Paris, it was also agreed that climate finance should be ‘new’. So it should come on top of the money for development cooperation. But between 2011 and 2018, it accounted for only 45 percent of climate finance disbursed, according to CARE’s report. ‘A different sauce is often poured over existing resources,’ says ActionAid Netherlands’ Nils Mollema.

The problem, according to Mollema, is that it is not clearly agreed which country is responsible for which area. ‘It makes it very easy for each country to present their own vision. For example, the U.S. has not committed any climate funding under former President Donald Trump. It also makes it difficult to attach consequences to it.’

Loss and damage, or climate damage that cannot be prevented through adaptation or mitigation, is not under the 100 billion per year promise. Even though it was first brought to the attention of the UN Climate Change Conference in 1991, hard agreements have been made about it. The Vanuatu archipelago is threatened by sea level rise and therefore submitted a proposal for financial compensation.

Since then, countries in the Global South have tried thirteen times to reach agreements on climate damage. But their initiatives have always been blocked, weakened or delayed by the Global North.

This is according to a report by the Loss and Damage Partnership. The last attempt was made during COP26 in Glasgow last year. The Group of 77, comprising China and 134 developing countries, called for the ‘Glasgow Climate Emergency Agreement’. However, the proposal was rejected by the United States, Australia and the European Union. Instead, rich nations proposed an alternative: a three-year dialogue. No binding conclusion has been agreed, meaning the talks will end with nothing.

Meanwhile, extreme weather events are on the rise. Consider the floods in Pakistan that killed at least 1,500 people and caused about $30 billion in damage. Or summers now dominated by heat waves, wildfires and droughts.

The economic costs of climate change are also increasing. Between 2000 and 2019, climate damage in the 55 most climate-vulnerable countries was $525 billion.

The demand is there, so why is the Global North making such a fuss about climate finance?

According to Mollema, the Global North does not want to take responsibility for fear of a flood of lawsuits. But those cases can come whether those countries agree or not. We know scientifically that climate change is caused by emissions and that the global north has historically been most responsible for this,’ explains Mollema. An example is the case against Shell, brought by MilieuDefense and others. Last year, the judge ruled that Shell would reduce CO globally in the short term₂ to be discharged.

Climate justice is about the question: Who pays? A group of US climate researchers looked at climate finance through world systems theory. The paper will appear in the November issue of Science Political Geography. World system theory classifies countries based on their economic status. Major countries were wealthy, often had strong militaries, stable governments, and were once colonial powers. The periphery consists of poor countries with instability; Mostly former colonies. Then there’s the semicircle. They are the countries in between. In short, according to world systems theory, peripheral countries are driven by core countries.

US climate scientists conclude that climate finance perpetuates inequality between core and peripheral countries. One example is that rich countries think they have the right to decide what happens to climate finance. The Global North, for example, wants to profit from climate finance. According to American researchers, core countries prefer to invest in the semi-periphery rather than the periphery because the economic sector there is more developed and there is more money to be made.

This is reflected in the distribution of climate finance among developing countries. Between 2016 and 2020, only 8 percent of climate finance for developing countries went to low-income countries, while they accounted for 20 percent of developing countries. Least developed countries receive only 17 percent of available money, while they represent 34 percent of all developing countries.

Additionally, more climate finance goes to mitigation than adaptation. In 2020, 58 percent of all climate finance was spent by developed countries. The purpose of mitigation programs is to prevent climate damage so that major countries also benefit. Adaptation programs focus on adapting to climate change and therefore deliver results only at the local level. For example, a moat in Egypt may not stop water in the Netherlands, but fighting air pollution in the capital Cairo helps reduce global greenhouse gas emissions.

American researchers argue that peripheral countries are dependent on core countries as they are exploited. In the field of climate finance, this manifests itself in two ways.

Much of the available money flows through international institutions and funds, which major countries have greater control over. For example, the administrative threshold for the Green Climate Fund is so high that companies in developing countries can easily spend two years submitting a project application, says Care Nederland’s Rosa van Triel. As a result, it is often impossible for small local initiatives to receive money from such funds.

Additionally, much of climate finance consists of debt. According to figures from the OECD, in 2019, it was 71 percent. Key countries can monitor how climate finance is spent. Also, those loans have to pay (often high) interest. Core countries make money from this and it hinders the development of peripheral countries, making them dependent on core countries.

So the global north largely decides what happens to climate finance, and often it doesn’t reach the groups that need it most. This also applies to the Netherlands, concludes the evaluation service of the Ministry of Foreign Affairs (IOB). Women, the poor and vulnerable populations are considered a priority in Dutch climate policy, but money rarely reaches these target groups.

Even as nations agree to climate finance at COP27 in Egypt and rich nations stick to new agreements, concerns remain. After all, what is the plan to deal with corrupt regimes that may misuse these funds?’ Human rights activist Sana Seif wrote on Twitter. His brother Alaa Abd El Fattah is one of Egypt’s most prominent political prisoners and has been on hunger strike for more than 200 days to protest his imprisonment.

There are options, emphasizes Nils Mollema. For example, governments can be bypassed by embassies collaborating with non-governmental organizations. Administrative thresholds for funds such as the Green Climate Fund could also be lowered so that local initiatives can access the money more easily. But the Global North must also dare to take risks, says Mollema. Only this way the money ends up where it is needed.