Are rich nations doing enough to help developing countries cope with climate change?

Climate finance has proved a contentious issue for decades, with complaints often made that developed nations have fallen far short of the commitments they have made

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Few climate change issues have proved more difficult to find international consensus on than climate finance and the responsibilities that developed nations may have in assisting poorer countries.

The help that may be needed in transitioning to low-carbon economies (mitigation), in reducing the effects of climate change (adaptation) and in coping with loss and damage caused by climate has proved contentious for decades.

These will come under the spotlight when Cop28 begins in Dubai at the end of this month, with observers looking at whether there is progress on advancing the loss and damage fund whose creation was announced at Cop27 in Egypt last year.

Climate finance has been on the agenda at many previous Cops, notably at 2009’s UN climate summit in Copenhagen, when wealthier nations pledged to provide $100 billion per year by 2020 to poorer countries to assist with adaptation and mitigation.

The cost of climate change

According to the Organisation for Economic Co-operation and Development (OECD), in 2021 richer nations provided a total of $89.6 billion in climate finance and, in a recent report, the organisation said that the $100 billion target was likely to have been reached last year.

Large amounts are channelled through the Green Climate Fund (GCF), which was set up through the UN Framework Convention on Climate Change (UNFCCC).

Funded by the US, among others, this has supported more than half the world’s nations to, for example, become more resilient to climate change and move over to clean energy.

The overall level of support provided is, however, "not such a good story", according to Prof Niklas Hoehne, co-founder of the NewClimate Institute in Germany.

"Developing countries have been pushing for more finance from developed countries for years now," he said.

"Norway has been in the past one of the best countries for providing funds for mitigation and adaptation, for its size.

"At the low end, the US, compared to its size, it’s still providing little … Russia also very little. Across the board, none of the developed countries is really providing an equitable share."

In its Climate Finance Shadow Report 2023, the famine relief and campaign organisation Oxfam said that the real value of spending by donors in 2020 was only $24.5 billion, compared to a purported figure that year of $83.3 billion.

Much of the finance came in loans rather than grants and, instead of providing extra cash, donor countries were, Oxfam said, "repurposing" a significant proportion of aid money as climate finance.

Even if the goal has been reached through public and private finance, the OECD indicated that by 2025, developing nations will need to spend not $100 billion a year but about $1 trillion annually on climate-related issues.

Loss and damage

For the amounts needed to cover loss and damage, many figures have been suggested, with $400 million a year by 2030 frequently cited.

Loss and damage covers, the UN has said, economic costs, like rebuilding infrastructure damaged by extreme weather, or lost revenue because crops have been destroyed by the climate.

There are many non-economic harms, including effects on cultural identity or the trauma of experiencing extreme weather.

Loss and damage may also include damage to biodiversity, the degradation of farmland and the displacement of communities.

Funding may go towards physical reconstruction after extreme weather, counselling for victims, and memorialising lost cultural heritage in museums.

In terms of deciding who should pay what, should it be based on historical greenhouse gas emissions, per capita emissions, current emissions, per capita income or whether a nation has become wealthy from extracting and selling fossil fuels?

"A large point of contention is that developed countries think this shouldn’t simply be limited to developed country contributions," Lisa Vanhala, professor of political science at University College London, said.

"That while they may take the lead on this, there’s lots of room for other countries with capacity to also be contributing to the fund."

At recent discussions in Abu Dhabi on the loss and damage fund, Saudi Arabia, classed as a developing nation, was reportedly asked by the US and the EU to contribute. The US is said to have suggested that finance for the fund could also come from philanthropists.

Following these talks, a preliminary agreement on operationalising the Cop27 loss and damage fund was announced, with major developing nations as well as industrialised countries expected to contribute. The framework’s formal adoption is expected at Cop28.

Yet there remains "a lot of work to be done" to get agreement on loss and damage from the almost 200 nations in the UNFCCC, Prof Vanhala said.

"There are still really important things to be hammered out in terms of how we identify what need is or what vulnerability looks like," she added.

"How do you make some of those trade-off decisions in terms of whether one country’s drought recovery is funded whereas another’s flood devastation isn’t?"

Scotland, which has devolved powers within the UK, is often said to have been the first nation to earmark funds to help developing nations cope with loss and damage, having made a commitment at Cop26 in Glasgow in 2021.

Nicola Sturgeon, Scottish first minister when the first contribution was pledged, described it at the time as an "act of reparation", a potentially controversial comment as it amounted to an admission of historical responsibility. This concept is often resisted in discussions around loss and damage because it could open developed nations up to almost limitless demands.

"Nicola Sturgeon in Scotland really played a pivotal role in cracking this space open and breaking the taboo of giving finance that is understood to be specifically for loss and damage," Prof Vanhala said.

Other nations to have provided cash include Denmark, Belgium and Germany, with the last of these putting funds into the Global Shield against Climate Risks.

The Global Shield is an initiative of the G7 wealthy industrialised nations and the V20 (the Vulnerable Twenty, a grouping of what is now 58 countries most at risk from climate change) to "strengthen the financial protection and resilience of vulnerable countries and people".

Emerging patterns

The emerging field of attribution science is now able to link particular harms to climate change and so may prove useful in determining what levels of support for loss and damage are needed, according to academics.

[Several] kinds of loss and damage are likely to be shown to have a climate change footprint," Dr Friederike Otto, a senior lecturer in climate science at Imperial College London, said at a seminar streamed online this month.

"It’s important to use this kind of science to estimate what [finance is needed] … That’s also where the science is important – to set up the fund."

While, Prof Vanhala said, there has been a shift to discussing loss and damage on the basis of solidarity rather than liability, in keeping with provisions in the 2015 Paris Agreement, the scale of climate litigation has increased significantly.

Separate to the UNFCCC loss and damage fund, many legal cases linked to climate change are being brought in courts, tribunals and other institutions.

According to figures published by the UN Environment Programme, between 2017 and 2022 the number of cases more than doubled from 884 to 2,180.

So, as countries prepare to meet at Cop28 to thrash out further details of the official loss and damage climate fund, there are multiple other avenues through which those who have suffered as a result of climate change may try to secure recompense.

Updated: November 20, 2023, 6:36 AM