By Mihir Sharma
In essence, the climate negotiations are about one thing: who pays? Most of the time, the battle is over as to who is going to pay to save the world – by financing projects, such as solar farms, that would help reduce CO2 emissions in the future.
The disagreements on such issues run deep enough. But the deepest anger is reserved for another issue: who will pay for the damage climate change has already caused?
Last year, world leaders accepted the principle that the “loss and damage” caused by climate change deserves attention. They did this in part to assuage developing countries’ resentment and make broader climate action possible again. Early this month in Abu Dhabi, countries appeared to agree on a new ‘loss and damage fund’, initially housed at the World Bank, that would compensate those suffering the worst effects of climate change.
But political battles over who pays and who receives can give rise to even deeper resentment. Climate change extends across the globe, affecting everything from people’s livelihoods to public infrastructure and health outcomes. Who will decide which of these costs most deserves to be reimbursed? How can anyone be trusted to measure and make good all the damage climate change has already caused? Recognizing injustice is easy. Restorative justice is difficult.
In reality, the Abu Dhabi agreement exposes the three fundamental problems that prevent us from taking real climate action as a global community.
First, relations between developed and developing countries have broken down. Poorer countries in particular suspect that they are giving in too much without getting anything substantial in return. For example, many developing countries wanted to see a new fund established that would be free from the institutional biases that they claim pervade the current international financial system.
In response to continued pressure from Europe and the US, they relented and agreed that the new fund would be housed, at least initially, at the World Bank. In return, they received no firm commitments on anything – whether it was the amount of money that would be deposited, when the payouts would begin, or how the payments would be made. Distrust between developed and developing countries has reached a new low.
Second, emerging countries themselves are trying to pull off a huge scam by pretending to have shared concerns. The ‘global south’ is by no means a monolith; its internal divisions may run deeper than those between some of its members and the rich world.
Even a well-funded loss and damage fund would have difficulty deciding who should receive compensation in the first place. The idea has been pushed by the leaders of small island states, for whom global warming is truly an existential threat. The West agrees and wants transfers to focus on vulnerable islands and the poorest countries.
But middle-income countries like Pakistan – which suffered a $30 billion loss last year when floods swept through its densely populated plains – have not agreed to give their share to the even poorest countries. Global warming has also brought them to the brink of a humanitarian crisis, they say, so why should they be excluded from payouts? In their rhetoric, the representatives of developing countries focus on the West; their actions are those of people trying to elbow each other to the front of the line.
And finally, every viable climate solution has a U.S.-shaped hole. Everyone outside the US agrees that since America has contributed the most carbon to the atmosphere, it should pay out by far the most.
But no U.S. government is able to devote a single tax dollar to global climate justice. This consistently undermines any chance of global agreement. At the last minute in Abu Dhabi, after everyone thought some sort of consensus had been reached, the US representative countered that the voluntary nature of the fund had not been made sufficiently explicit.
The rest of the world, including other wealthy countries, saw this as a betrayal of a hard-won victory. It also appears that the US does not want to make its own contribution in the form of government money, but in the form of philanthropic funds and concessional loans, among other things. That money would have been available for humanitarian work anyway. With the US unable or unwilling to make credible commitments, the rest of the world is floundering in an attempt to compensate for the lack of leadership.
Loss and damage is the most difficult part of climate justice. But even simpler tasks – for example, securing financing for new solar power plants – seem impossible at the moment. Unless trust is rebuilt, developing countries recognize that some of us need more help than others, and the US succeeds in asserting its position as a global leader, the upcoming COP28 climate change conference will achieve even less than its predecessors.