OPINION: Climate disaster fund needed to stop countries being pushed further into poverty

Thomson Reuters Foundation, trust.org

* Any views expressed in this opinion piece are those of the author and not of Thomson Reuters Foundation.

As leaders gather for climate talks, the question of how developing nations can finance their recovery from floods, droughts and rising sea levels is becoming harder to ignore

By Gaspar Sitefane, country director for ActionAid Mozambique, and Heron Belfon, project coordinator of Jubilee Debt Campaign Caribbean

Climate change is already wreaking havoc in countries across the Global South. Women and young people are the hardest hit, as communities struggle to survive increasingly devastating and frequent disasters.

Severe droughts, flooding and food shortages are affecting some 60 million people across southern and eastern Africa.

The food crisis in Mozambique comes after it was hit by an unprecedented two cyclones, Idai followed by Kenneth, this March and April. The deadly storms tore through 1.7 million acres of farmland, washing away crops and destroying livelihoods. Mozambique estimates that the loss and damage caused by the cyclones totals $3.2 billion.

In the Caribbean, the increasing ferocity of mega storms like Irma, Maria and Dorian, are bringing devastation of catastrophic proportions to these tiny island nations, reversing years of economic gains. The destruction caused by Hurricane Dorian alone totals more than $1.5 billion.

The UN has warned that climate disasters causing death, displacement and loss of livelihoods are happening at least once a week, although many do not make international headlines. It is estimated that by 2030, the global annual cost of repairing loss and damage associated with climate change will total $300 billion, increasing to $1.2 trillion a year by 2060.

As world leaders gather in Madrid for the 25th Conference of the Parties to the UN Framework Convention on Climate Change (COP25), the question of how developing countries can fund their recovery from floods, droughts and rising sea levels, and transition to greener economies, is becoming harder to ignore.

The current system for responding to climate crises is exacerbating existing inequalities and pushing developing countries further into poverty. Instead of receiving debt relief and grants from the rich countries that have caused the climate crisis, Mozambique was this year forced to take on more loans from the International Monetary Fund (IMF) to help it recover from the devastating impacts of the cyclones.

Mozambique was already on the IMF’s list of countries in debt distress. The country’s citizens will now have to pay the taxes and endure the public-service cuts needed to repay the loan for decades to come.

Rights Based Reparations 

Developing countries shouldn’t have to foot the bill for the harmful impacts of catastrophes they did the least to cause. The Warsaw International Mechanism for Loss and Damage, or WIM, was established in 2013 for this very reason; to support vulnerable countries on the frontline of climate change, those already experiencing extreme and slow onset, climate disasters.

But countries, including the UK, US, Australia and Japan, which got rich from the extraction and vast consumption of fossil fuels that caused the crisis, are blocking progress. After six years, the WIM has failed in its main purpose and has not proposed concrete financing solutions that would enable hard-hit communities to receive rights-based reparations.

The WIM is up for review at COP25, presenting a crucial opportunity for governments to get behind a comprehensive global recovery mechanism. We will not let rich nations turn away from the immense suffering already being caused by the climate crisis.

We’re among over 150 organisations, unions and high-profile individuals, including the author and activist Naomi Klein, calling for the creation of a comprehensive loss and damage fund to support the communities on the frontline of climate change and those suffering most from world leaders’ refusal to act.

In an open letter to environment ministers, we outline how this would be financed by contributions from developed countries, alongside ending fossil fuel subsidies, innovative financing solutions, such as a Climate Damages Tax on oil, gas and coal extraction, and a progressive tax on financial transactions.

It must include debt relief, with governments committing to a moratorium on debt and interest payments for any country struck by a climate disaster. Additionally, creditors should commit to restructuring stricken countries’ existing loans to avert a subsequent debt crisis. These efforts must include private lenders too, whose claims against poor countries can approach or exceed those of official lenders.

Climate disasters are increasing in frequency and intensity, driving a global surge in migration and hitting the most marginalised the hardest.

This December, the world’s richest, most powerful governments can fix the broken system of responding to these crises and prevent developing countries from sinking further into debt and poverty.

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