Funds For Climate Recovery

Bini Dahal

Issues related to climate change have emerged as a major disruption to the lives and livelihoods of people worldwide. This is particularly true in the case of developing countries whose greenhouse gas emissions account for less than one per cent. To protect these countries from the problems triggered by climate change, the idea of ‘loss and damage funds’ has received a greater prominence in recent times.

It is worth noting that the concept of ‘loss and damage funds’ was one of the key points of discussion at the 2022 United Nations Climate Change Conference, also known as the Conference of the Parties of the UNFCCC (COP27), held in Egypt. As part of the fund, developed countries are required to provide necessary financial assistance to those countries affected by climate change. Nations such as Belgium, Scotland, and New Zealand, among others, had readily agreed to this step. 

In the case of Scotland, it was during COP26 that the European nation came up with the initiative of a loss and damage fund. Currently, Scotland is providing financial support to Malawi, a landlocked nation located in South Eastern Africa. According to BBC reports, the fund has been used to rebuild parts of river embankments destroyed by the storm and to develop new flood defenses that prevent problems caused by flooding in Malawi. 

While this assistance flows into a highly vulnerable nation like Malawi, there are still other at-risk countries in the world waiting for the $100-billion support that developed countries had pledged in 2020. Unfortunately, the target was not met at that point. The need for climate change-related finances has grown to an all-time high now. Just last year, disastrous floods occurred in Pakistan. Likewise, the longest and most severe drought is being experienced in the Horn of Africa. 

Local production has gone down, and high food prices have prevented people and countries from maintaining food security. This is especially evident in Somalia, Kenya, and Ethiopia. Food insecurity itself has the potential to exacerbate several health issues, reduce the productive capacity of people, and make them unable to earn a living. When poor households are unable to cope, this becomes an intergenerational phenomenon, a vicious cycle with no sign of ending. 

Countries will require enough budget/ financial resources to survive the wrath of climate change. But now the question arises whether the idea of loss and damage funding will come true or not. The Russia-Ukraine war, growing recession, and weaker economic condition have put developed countries in a tight spot as well. So, they may be reluctant to contribute to loss and damage funding. Also, showing commitment is not enough. Questions can arise on who will pay and who will receive the finances. 

These questions will have to be answered, and required support will have to be floated. When nations fail to make efforts promptly, the situation may escalate to the point that we will be unable to recover. As climate change is a global problem, it requires efforts aimed at a global solution. Developed countries have a moral responsibility to help developing countries, and the idea of loss and damage funds is a step in the right direction. However, the implementation of this fund remains uncertain, and much needs to be done to ensure that the most vulnerable countries get such support as soon as possible.