Climate change talks open in Madrid today with fresh warnings of worsening disaster impacts, but they also offer a rare opportunity for the aid sector and poorer countries to secure new funding to help those on the front lines of crises.
Facing soaring humanitarian costs in a warming world, campaigners are pushing for the divisive issue of climate-linked “loss and damage” to take centre stage at the annual UN Climate Change Conference, this year known as COP25.
Vulnerable countries are calling for fresh commitments to boost climate change support – including laying the groundwork for billions of dollars in new financing, which advocates say could feed into cash-strapped response and recovery funds.
“What we call loss and damage in climate parlance is nothing but humanitarian situations that are being created by climate change,” said Harjeet Singh, the global lead on climate change for the NGO ActionAid. “In fact, this particular COP is largely for the humanitarian community.”
But there’s likely to be pushback from wealthier countries, who have resisted attempts to address loss and damage financing at previous climate summits.
“This is one of the issues that will be the most sensitive,” said Yamide Dagnet, a policy analyst at the Washington-based World Resources Institute.
“Loss and damage in climate parlance is nothing but humanitarian situations that are being created by climate change.”
This year’s summit comes amid new signs that the world is falling behind on climate change commitments. Greenhouse gas emissions have reached record highs, according to the UN’s World Meteorological Organisation. And global temperature rise is on track to hit 3.2 degrees Celsius above pre-industrial levels – well off the 1.5-degree target.
At the same time, countries around the world are seeing crises that bear the hallmarks of climate change: increasingly intense and unpredictable extreme weather.
Mozambique, for example, saw billions of dollars in damage as cyclones Idai and Kenneth slammed southern Africa in quick succession in April and May. The Bahamas is still wrestling with the impact of September’s unusually slow and intense Hurricane Dorian. And South Asia saw one of its worst monsoon seasons in years as floods and landslides swept across the region in July.
Slower-onset crises are also making a mark.
Failed rains and drought have left 45 million people needing aid in 14 African countries. Climate change and disasters have shrunk agricultural growth, threatening food security across the Pacific Islands, regional meteorologists say. And an October study published in the journal Nature Communications warned that floodwaters from rising sea levels could threaten even more people than first predicted: some 300 million people could live with chronic floods within three decades.
“Despite contributing the least to climate change, it is the poor and vulnerable who suffer the most from these impacts,” an advocacy group representing 47 “least developed countries” at the summit said in a statement.
How would new financing affect aid responses?
There has been little progress on loss and damage financing at previous COP summits, leaving the issue largely unresolved.
Advocates are pushing for COP25 to establish some form of loss and damage financing tool, to create a taskforce on delivering new funding, and to produce a yearly tally of what’s missing – similar to adaptation and emissions gap reports tracking other climate promises.
They say new financing could supplement chronically underfunded humanitarian appeals and contribute to rebuilding programmes after disasters strike.
“I think there’s a good case to be made for that,” said Sven Harmeling, global policy lead on climate change at CARE International.
“For most of the appeals, you still see a big funding gap. That means there are many catastrophes, many disasters, where the international finance provided is much smaller than what is actually needed or what the costs for those countries are.”
These costs will likely escalate: a September report by the International Federation of Red Cross and Red Crescent Societies projected that the price of responding to climate-linked disasters alone could reach $20 billion every year by 2050.
“They are being affected for no fault of theirs, and then they have to borrow money from the same system that is responsible for this crisis.”
Singh of ActionAid envisions a system where financing could be quickly tapped after climate disasters to fund responses and kickstart rebuilding.
For countries who have contributed the least to climate change, this extra layer of funding may also be more equitable than relying on loans from development banks and other financial institutions. Mozambique, for example, estimates its cyclone recovery could top $3.2 billion; it took an early $118-million loan from the International Monetary Fund after Cyclone Idai struck.
“Imagine a disaster-ravaged country, which is already under debt, has to borrow more money for rehabilitation,” Singh said. “This is like double jeopardy. So they are being affected for no fault of theirs, and then they have to borrow money from the same system that is responsible for this crisis.”
Where would the money come from?
Loss and damage commitments would require new sources of cash and a body to distribute the money: climate advocates are pushing for annual financing to start at $50 billion by 2022 – about double the amount of this year’s major humanitarian appeals (and more than triple what has actually been funded).
The ACT Alliance, a consortium of church organisations working on humanitarian issues, believes this could come from a range of new sources: levies on global air travel; a tax on financial transactions; a “climate damages tax”, including levies on fossil fuel extraction, or a broader carbon tax, which has been used in jurisdictions around the world.
Advocates say it’s only fair for wealthier nations whose emissions play an outsized role in climate change to help pay for damages. A recent analysis endorsed by 100 civil society groups calculated that the United States and EU countries should shoulder more than half the world’s loss and damage funding, based on historical greenhouse gas emissions and income.
How likely is a breakthrough on loss and damage?
It’s still unclear what might emerge in what could be contentious negotiations.
Loss and damage financing remains a divisive issue among wealthier nations, who have often bristled at the idea of “compensation” for poorer countries.
Climate advocates are largely dropping the term itself, instead pushing for finance under the broader umbrella of “action and support”, which includes less controversial ideas like technical help and capacity building.
“At the minimum, the COP should result in a clear task and mandate to really go through and better understand what are the loss and damage finance needs, how they can be addressed, and where can additional finance come from,” Harmeling said. “One of the criticisms is that these discussions haven’t happened at the [COP] context. That should be a minimum outcome.”
In recent climate summits, loss and damage financing has often taken a backseat to the overarching negotiations around emissions-reductions targets or the rules for keeping climate commitments.
This year, however, delegates will be reviewing the work of the COP body set up to coordinate loss and damage discussions, study possible solutions, and recommend a path forward – placing the issue squarely on the radar.
“This is really the moment to put a spotlight on climate impacts and how the global community should be addressing them,” Singh said.