Protesters demand climate reparations payment from rich countries to poor countries impacted by climate loss and damage at the COP27 climate conference in Sharm El Sheikh, Egypt, on Nov. 11, 2022.SeanGallup/Getty Images
Mention “loss and damage,” or L&D, and most of the big, polluting countries – the ones whose carbon emissions are largely responsible for baking the planet – change the subject and leave the room.
The term refers to a new fund that remains more concept than reality. It would help pay for damages triggered by catastrophic climate-change events, such as the floods that have submerged a third of Pakistan and the severe droughts in parts of Africa this year.
“We have droughts across the continent, and where there are no droughts, there are floods,” said Ikal Angelei, co-founder of Friends of the Earth Turkana in Kenya, at this month’s COP27 climate-change conference in Sharm el-Sheik, Egypt.
The L&D fund is separate from climate-change mitigation and adaptation financing that was launched in 2015, and is supposed to pay out US$100-billion a year to vulnerable countries – but it has always come up short.
Rich, polluting countries have always resisted committing hard cash to the L&D fund for a variety of reasons – some legitimate and others not-so-legitimate. They are worried about endless liability claims by hard-hit countries. They know that L&D is hard to define; they suspect that some of the claims might be routine environmental catastrophes that have nothing to do with man-made climate change, at least none that can be proven.
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Most of all, they fear a continuing expense that they could never afford to pay. Former British prime minister Boris Johnson, whose country brought on the Industrial Revolution two centuries ago – and the sooty emissions that went with it – was blunt enough to say the price tag would be too high even if the developed world has a moral obligation to pay up.
“What we cannot do, I’m afraid, is make up that with some kind of reparations,” he told The New York Times at an online COP27 forum.
But all is not lost, because a few small countries – Ireland, Denmark, Belgium, among them – have endorsed the L&D concept, to the point they each have committed a few million bucks to the nascent fund that will need hundreds of billions of dollars, perhaps more, to repair the damage inflicted by climate catastrophes.
At least, it’s a start. But will L&D gain traction in the remaining days of COP27, which closes on Nov. 18? Opinion is divided, but the view is mostly pessimistic.
“It’s a big issue, loss and damage. You will probably see a cosmetic move,” said Evan Siddall, chief executive officer of Alberta’s $168-billion AIMCo fund, in an interview with The Globe and Mail earlier this week.
The wild cards, as usual, are China and the United States, the world’s first and second biggest polluters, and, to a lesser extent, India, another big polluter. India wants an L&D fund, since it is a developing country and its historic emissions are fairly low. The U.S., so far, has not been a player at COP27 in the L&D debate. (To his credit, U.S. President Joe Biden was one of the few leaders of a big, carbon-belching economy to make an appearance at Sharm el-Sheikh. The leaders of China, India, Russia and Canada were no-show.)
And China? Here is where it gets interesting.
The country is the world’s largest emitter of greenhouse gases, accounting for about 27 per cent of global emissions, or well more than twice those of the U.S. As the U.S. and Europe deindustrialize and vow to reach net-zero emissions by mid-century or so, China’s share of emissions can only rise.
You would think that China would have an obligation to create an L&D line in its budget, but it has cover. It is officially designated by the World Trade Organization as a developing country and can legitimately claim that its historic emissions are low.
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Which is not to say that China does not support such a fund. In fact, Beijing’s chief climate envoy, Xie Zhenhua, last Wednesday said that his country is willing to help poor countries, but would not send cash.
“We strongly support the claims from developing countries, especially the most vulnerable countries, for claiming loss and damage compensation because China is also a developing country and we also suffered a lot from extreme weather events,” Mr. Xie said. Paying for L&D “is not an obligation for China, but we are willing to make our contribution.”
Yet a cash-free contribution might just translate into China using L&D as another launch pad for geopolitical advantage.
Mr. Xie seemed to be hinting that China would repair climate-related damages in developing countries as a goodwill gesture. But we all know that goodwill gestures can pay dividends. They can buy economic and political influence: In exchange for installing flood-control systems or building dams, a water-logged country could feel obliged to reward China down the road.
The concept is not alien to China, whose Belt and Road Initiative has been a phenomenal success. Launched a decade ago, the BRI is a global infrastructure-development strategy that has made investments in everything from rail lines to ports in some 150 countries, including Greece, where it rebuilt the Piraeus container port.
Of course, the projects buy political and economic influence for China, help expand the markets for its products and expertise, and boost trade flows. The U.S. and many European countries are wary of the BRI, dismissing it as a form of Chinese colonialism, at best, or a cynical example of debt-trap diplomacy, at worst.
Could China’s contribution to L&D emerge as an extension of its BRI strategy? It might, and desperate, climate-whacked countries would no doubt welcome any Chinese repair jobs, even if it were to come with strings attached. China wants to extend is global influence as it strives to become the world’s dominant superpower, and L&D could be a useful tool in this endeavour.
One way for the U.S. to slow China’s rise would be to use L&D to expand its own global influence. As the world’s greatest historical emitter of greenhouse gases, it has a moral obligation to do so.
But so far, the U.S. has signalled it does not want to start writing cheques to that end. China might not be unhappy about that.