Despite growing calls, EU intends to oppose a separate fund for climate reparations

The European Union, the world’s richest single market, intends to oppose the creation of a brand new international fund for climate reparations, the same topic that is expected to dominate discussions at COP27.

“We don’t want discussions to focus on a new fund,” a senior EU official said on Friday, speaking on condition of anonymity.

“It’s a much bigger story than a particular fund.”

Climatic repairsalso known as loss and damage, refers to the financial payments that developing countries in the South demand from the industrialized North in order to compensate for the irreversible devastation caused by the climate crisis.

Low-income countries say they are disproportionately affected by extreme weather events, such as devastating floods and longer-than-usual droughts, even as their dumping of greenhouse gas emissions has been negligible compared to the North.

A 2020 study published in The Lancet found that the Global North was responsible for 92% of excess global carbon emissions since the advent of the Industrial Revolution, when burning fossil fuels became the norm.

The EU and UK contributed about 29% of all gases emitted.

The international community has already pledged to raise 100 billion euros per year for developing countries, but this money is designed to focus on mitigation (reducing the impact on greenhouse gas emissions) and adaptation (preventing and minimizing the adverse effects of climate change).

The annual target was never achieved.

Global South countries see climate reparations, which are tied to permanent destruction, as a separate third pillar in this equation. For this reason, they demand the creation of a completely new fund, completely separate from the 100 billion euros earmarked for mitigation and adaptation.

There is no agreed figure that reflects the true extent of loss and damage, although some studies estimated the number between €290 billion and €580 billion per year by 2030, and up to €1.8 trillion by 2050.

“Loss and damage is happening now, harming people and economies now, and must be addressed now,” UN Secretary-General António Guterres said last month.

“This is a fundamental issue of climate justice, international solidarity and trust.”

The contentious issue stoked tensions last year at COP26 in Glasgow, when a coalition of 134 developing countries, along with China, pushed to include reparations in the conclusions, only to meet resistance from the United States and European.

The debate is now set to return, perhaps stronger than ever, at COP27 in Sharm el-Sheikh, Egypt.

“We need real money,” said Avinash Persaud, special envoy to the Prime Minister of Barbados, ahead of the summit.

“No one-size-fits-all solution”

Despite growing calls from all corners of the South, the EU intends to stand its ground and oppose, at least for now, the establishment of a financial fund.

It is believed that such a fund could open the door to endless lawsuits against the EU, UK, US and other wealthy countries, whose carbon footprints date back centuries.

The bloc, however, seems willing to take the conversation forward around the hot topic and identify the specific needs of each developing country on the front lines.

This process should take place through what is called Santiago networka technical assistance system launched in 2019 which is not yet fully operational.

“Countries’ needs are very different. There is no one-size-fits-all solution for loss and damage,” the senior EU official said.

A similar tone was set by John Kerry, the US climate envoy, who admitted last month his country has a “responsibility” and will not “obstruct” the discussion on loss and damage at COP27.

Kerry, like her European counterparts, has avoided the term “reparation,” which has politically sensitive implications.

Officials in Brussels insist that any potential compensation must first be dealt with through existing mechanisms, including humanitarian and development aid, before any new money is put on the table.

“There is concern that if we just focus on creating a new fund without completing the necessary conversation, we will spend the next few years negotiating that fund,” another EU official said.

“We’re getting a lot of resistance from developing countries. It’s a bit counter-intuitive because all financial flows need to be reformed in order to meet the whole challenge of climate action.”

Officials also stress that climate finance must remain focused primarily on climate change mitigation, which aims to address current threats and can help reduce residual damage.

But cracks in the EU’s adamant opposition have begun to appear.

In September, Denmark became the first western country offer compensation for loss and damage: 100 million Danish crowns (13.4 million euros) to developing countries.

Last month, German Foreign Minister Annalena Baerbock said his country would “work towards equitable cost sharing” at COP27 and strive to put loss and damage “on the agenda”.

Leave a Reply

Your email address will not be published. Required fields are marked *