Paying the price of climate damage

As the world struggles to keep the planet from overheating, the issue of who pays for the fallout of climate change is one of the major sticking points in negotiations at the UN climate conference (COP26) in Glasgow, Scotland.

"Those who pollute are not being sanctioned," Molwyn Joseph, Minister of Health, Wellness and the Environment for the Caribbean nation Antigua and Barbuda, told DW. "Those who pollute do not appear to be empathetic to the disaster that is faced by small island developing states as a result of the pollution."

The effects of a hotter planet are already being felt today — droughts have wiped out entire harvests, flooding and supercharged hurricanes have destroyed people's livelihoods and even entire islands have disappeared off the face of the Earth.

And countries most vulnerable to climate change are increasingly calling for funding commitments to address that harm ⁠— referred to in climate negotiations as loss and damage.

Broken promises

Current talks on climate financing, however, have mainly focused on helping countries develop their green economies, mitigate greenhouse gas emissions, and adapt to a warmer world. What hasn't been properly addressed so far is the issue of loss and damage. Who picks up the tab when entire coastal communities have to be relocated, for instance?

"Small island developing states need to get a commitment that the issue of loss and damage will be dealt with in an urgent manner by this COP, and the process should start to see how the funding can be put in place," Environment Minister Joseph said.

"Within the shortest time possible, so countries such as mine do not have to wait four years to recover from a disaster. We had a disaster in Barbuda in 2017. We're still trying to recover and the government has been plunged into debt."

Money, money, money

The issue of loss and damage is by no means new, and has been addressed at previous climate summits. Eight years ago, COP19 in the Polish capital gave rise to what is known as the Warsaw International Mechanism for Loss and Damage as a way of helping vulnerable countries deal with the devastating impacts of climate disaster. Although it was reaffirmed in the Paris Agreement, developed countries are reluctant to make solid financial commitments. Article 8 clearly states that it "does not involve or provide a basis for any liability or compensation."

The issue of loss and damage is controversial because countries fear they could be held liable for every extreme weather event. And that could become very expensive. Studies suggest the economic costs of loss and damage by 2030 could run to between $400 billion (€345 billion) and $580 billion per year in developing countries.

The island nation of Fiji puts those costs even higher. "We should be looking at the order of $750 billion per year, of which 10% should be earmarked for small island developing states," Satyendra Prasad, Fiji's Ambassador and Permanent Representative to the United Nations, told DW.

More than 300 civil society organizations such as Climate Action Network, 350.org and Pan African Climate Justice Alliance sent an open letter to COP26 President Alok Sharma and world leaders, urging them to commit to delivering finance on loss and damage "on the basis of equity, historical responsibility and global solidarity, applying the polluter pays principle."

Those in developing countries want firm agreement on how the financing will be sourced and channeled to countries suffering loss or damage.

"We are all calling for these global leaders not just to pledge, but to put the money on the table," said Amath Pathe Sene, lead climate and environment specialist for West and Central Africa from the International Fund for Agricultural Development (IFAD). "I think how the way the world reacted to the global pandemic, and we acted quickly with billions of dollars, we should do the same for climate change."

Activists have also warned that most climate finance currently comes in the form of loans.

"What they are often offering is going to create more debt in Global South countries," Kenyan Fridays for Future activist Eric Damien Njuguna told DW. "It doesn't recognize the historical role of Global North countries in causing the climate crisis. So, in the end, we are paying back for something we didn't cause in the first place."

Breakthrough talks at COP26?

There are many ideas on the table to help finance the sums of money needed to pay for loss and damage. Antigua and Barbuda's Environment Minister Joseph suggests putting a levy on oil. "We have 90 million barrels of oil traded in the world per day. Even if you put a levy of $1 on a barrel of oil that could raise enough money to at least begin to address the issue of loss and damage," he said.

Small island developing nations are also exploring other avenues, should negotiations fail. Joseph said Antigua and Barbuda has joined with the South Pacific Island nation of Tuvalu to look into the possibility of legal action.

"It is somewhat unfortunate it has to come to that, but you have a situation where enough has not been done. And then the small island developing states now have to look at the options that are available to them," he said.

"We are being responsible global citizens. We are cleaning up our environment. And at the same time, we have been victims of the polluters."

While he says he has seen some positive signs and is cautiously optimistic, climate activists like Eric Damien Njuguna are skeptical. "This is the 26th COP — one too many. And all of them have been a failure. And to be honest, it wouldn't be a surprise for this COP26 to be a failure, either."

However, Fiji's Ambassador to the UN, Prasad, says many countries are very committed to recognizing that the small island developing states are facing extreme climate crisis.

"Many countries have said to us in bilateral discussions and in larger meetings that they want to help us address that," he said. "So let us see — we have a week to go."