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9 November 2022

Financial reparations and political barriers – COP 27 round up

This COP might have finally broken the seal on financial reparations and cash being sent to countries most affected by the effects of climate change.

The president of the World Bank, David Malpass, has announced that it will host the Global Shield Financing Facility Instrument to distribute economic assistance to countries that suffer economic consequences from climate change. The announcement was made alongside the German Chancellor, Olaf Scholz, who supported the initiative and announced that Germany would provide €170 million as part of the scheme. So far a total of €225 million has been committed by various countries including Austria and Scotland.

Further calls for climate reparations have been made by the prime minister of Antigua and Barbuda on behalf of the Association of Small Island States (AOSIS), and has called for high-emitting emerging economies such as India and China to contribute to such funds due to their contribution towards climate change. China itself has supported the creation of a loss and damage fund and would be willing to contribute, according to its climate envoy Xie Zhenhua. Indian representatives have yet to comment.

Calls have also been made to force fossil fuel companies to contribute similarly to countries through the implementation of a profit levy, which despite the precedence shown in Europe with the implementation of windfall taxes, would likely be difficult to pass on an international scale.

Barbados Prime minister Mia Mottley has called for an overhaul of international development funds and a 10% tax on fossil fuel companies claiming “we need to have a different approach, to allow grant-funded reconstruction grants going forward, in those countries that suffer from disaster.” Mottley argued this in the context of preventing international migrant crises, as has been made evident by recent flooding in Pakistan.

As ever, politics threatens to get in the way of climate change action, the US climate envoy John Kerry claimed that should the US House of representatives fall to Republican hands then climate funding from the US would likely stall for the foreseeable future. Joe Biden has previously committed $11 billion annually of climate finance by 2024 but if the Inflation Reduction Act is anything to go by, this could be watered down significantly by congress.

House Republicans, such as Rep. John Curtis who chairs the Conservative Climate Caucus, has been espousing the benefits of fracking and nuclear power at COP-27. Curtis and 5 other members of the group will be attending the summit from Thursday until Sunday and will meet with delegations of US allies.

Curtis argues that his group’s arguments in favor of natural gas have been validated since Russia’s war in Ukraine through Europe’s subsequent energy crisis, as if natural gas isn’t the problem here. What Curtis fails to recognize is that Europe isn’t like the US in its ability to frack for natural gas, Europe doesn’t have vast swathes of uninhabited land in which it can afford to create tremors, the population density in much of Europe is much too high for fracking to be unintrusive enough to be viable.

Curtis’ arguments along with the rest of his caucus are unlikely to be made in good faith and should be given little credence when looking for solutions to climate change, as he has made it clear he is only at the conference to drum up business.

Elsewhere at the event Tuvalu has called for an international non-proliferation treaty concerning the use of fossil fuels, which would include coal, oil, and gas. While this will be promptly ignored by almost all relevant parties it is worth mentioning because this is the first time a country has used COP to advocate for a total ban on fossil fuel usage. We are sure that at one COP or another, this will pass wholeheartedly – but not yet.

China has announced that it has drafted a new plan to curb its methane emissions that primarily arise from its mammoth coal mining operations and agricultural output, it will be doing this through increased monitoring and through the promotion of new technologies and financing mechanisms that aim to significantly reduce the country’s emissions output. China has the largest emissions in the world and unlike other developed nations like the US much of this comes from comparatively primitive sources like coal consumption. Provincial governments within the country have also pledged to curb emissions and a pilot program will begin early next year to determine the best way to monitor and control methane emissions.

So far the developments made at COP-27 have been within expectation, smaller countries have continued the yearly tradition of shouting into the void that their continued existence hinges upon developed nations reducing fossil fuel usage, which remains correct and only becomes more correct with time.

While this is only the beginning of the event, it’s fair to say that some progress has already been made with regards to the implementation of financial reparation schemes such as the Global Shield Financing Facility Instrument that aim to offset some of the costs borne by countries that suffer disproportionately from the effects of climate change. Harjeet Singh, the head of global political strategy at Climate Action Network International put it best “while the inclusion of loss and damage is a win, it should have happened 10 years ago”.

Further announcements will be made in the coming days as the event unfolds under the backdrop of the US midterm elections, which we be following closely in search of actionable plans and commitments.