Editorial | Case for climate finance

Given the scale of the destruction it faced from last month’s climate-related flash flooding, the US$20 million Nepal has requested from the United Nations’ Loss and Damage Fund is a small sum.

However, Nepal’s demand is an opportunity to refocus the debate on who should pay when countries that contribute little to global warming suffer some of its worst consequences.

The events of August 26 came without warning in Nepal when flash floods caused by a glacier collapse at Langtang Lirung wiped out villages and communities. More than 1,400 people lost their lives and around 5,600 are missing.

Nepal’s Foreign Minister Shishir Khanal, in justifying the demand, said that the disaster was a warning of what is to come and that the international community must accept shared responsibility.

“Support for Nepal should not be seen from an angle of aid or charity, but should be seen from the perspective of climate justice,” Khanal told the AFP news agency.

“We are paying the ultimate price for a global crisis we did not create,” he said, adding that he was not blaming any one country, but calling for countries to work together to help vulnerable nations.

IMPORTANT POINTS

Mr Khanal’s observations reiterate some important points that have long been on the agenda of global climate negotiations, pushed by developing countries, including Jamaica and its Caribbean Community (CARICOM) partners. Countries with very small contributions to global emissions should not be left to carry the full financial burden when climate-related disasters hit them.

Jamaica has a high stake in this debate. Last October, the island was hit by Hurricane Melissa, officially registered as a Category 5 storm, but one that scientists said was beyond the scale of even that highest categorisation. The hurricane devastated the western third of the island and left damage and other costs amounting to more than 57 per cent of Jamaica’s GDP.

Jamaica has not only to rebuild, but to do so resiliently, for which it has launched the National Reconstruction and Resilience Authority (NaRRA), a special-purpose vehicle to oversee the project. The island has received US$6.7 billion in pledges from multilateral financial institutions for its reconstruction programme, which includes insurance payouts and redemptions from a climate bond. The money from the financial institutions will be loans, not grants.

Yet, the cost to developing countries of adapting to a climate crisis they did little to cause is horrendously expensive. As Simon Stiell, the United Nations’ executive secretary for climate change, put it, “Climate finance is the lifeblood of climate action.”

NEITHER SUFFICIENT NOR RELIABLE

Yet, what is available, as Stiell noted, is neither sufficient nor reliable. For instance, the less than US$1 billion pledged so far to the Loss and Damage Fund, established at COP28 to assist particularly vulnerable developing countries with economic and non-economic losses arising from climate change, represents a drop in the proverbial bucket compared to real needs.

It took years beyond the initial deadline for developed countries to meet their commitment of providing US$100 billion a year in climate financing to developing countries. Their subsequent agreement to increase that amount to US$300 billion annually by 2035 is a fraction of the at least US$1.3 trillion a year that developing countries need.

This issue will again be on the world’s agenda at COP31 in Antalya, Türkiye, in November, as will the ‘polluter pays’ principle, which the International Court of Justice (ICJ), in an advisory opinion, established as a legally enforceable principle.

As climate-vulnerable small island developing states, Jamaica and CARICOM have a stake in these initiatives, as well as in the proposal under Barbados’ Bridgetown Initiative to reform global financial institutions and make them more accessible and responsive to the climate-financing needs of developing countries.

Jamaica understood these issues before Hurricane Melissa. The storm has placed the matter well beyond doubt.

As UN Secretary-General António Guterres said, fulfilling climate-finance promises to developing countries is necessary “to save lives, protect livelihoods, and strengthen economies”.

Jamaica cannot control the emissions of the world’s largest economies. It can, however, insist that those with the greatest capacity to respond help finance the protection of those facing the greatest risks.