Who pays out funds for climate risk and how it is one of the crucial nodes of the Sharm climate summit
(sustainabilityenvironment.com) – After Scotland (in 2021) and Denmark (two months ago), Germany and Belgium are also promising climate risk funds to the most vulnerable countries. But through their channels, not the Loss and Damage Financial Facility provided for by the Paris agreement and at the heart of the negotiations at the COP27 ongoing in Sharm el-Sheikh. A way to signal that the principle is correct. But also to say that how to translate it into practice is not taken for granted. The gap between richer and more vulnerable countries is still wide.
Berlin will channel the € 170 million promised yesterday by Sharm in its initiative on Loss & Damage: the Global Shield against Climate Risks that will be officially presented on 14 November at COP27. A “global shield” that German diplomacy wants to create within the G7 and specifically directed to the V20 group, the group of 58 countries among the most vulnerable to the climate crisis that represents 1.5 billion people and just 5% of global emissions. These climate risk funds will serve for insurance services (the pivot on which the entire Global Shield revolves) and climate disaster protection.
Thus Berlin recognizes the legitimacy of the request for climate justice but avoids granting funds that appear to compensate for the climate damage suffered. The risk, seen by German diplomacy, is that it sounds like a sort of self-blame for the role of Germany’s emissions in the single climate event. Which could open the door to far broader and more substantial claims. In fact, the global shield will more than anything be a rationalization of existing instruments in development cooperation and climate disaster preparedness. Resources will be made available a priori and countries affected by climate risk will be able to request them as necessary.
A similar move is that of Belgium, which promised a very low figure – EUR 2.5 million – and was intended only for Mozambique. In what frame? That of a broader aid package – 25 million – that the Belgian government has allocated to help the African country cope with the climate crisis. The channel, therefore, remains strictly bilateral. With respect to those who, for Loss & Damage, would like a multilateral mechanism that vulnerable countries and rich countries control at par.