Since industrialization began, developed countries have been responsible
for the vast majority of the world’s carbon emissions and they got rich in the process.
Poorer countries, on the other hand, have contributed little to the climate crisis,
but are set to feel the worst effects.
They want help or to be blunt, they want money. And they want it now.
Pakistan emits under 1% of global emissions, but it's the eighth most vulnerable country.
Zain Moulvi is a lawyer in Pakistan for the Alternative Law Collective,
a group of lawyers and academics committed to social, economic and environmental justice.
Pakistan has actually had climate-related disasters for a lot of years now,
something to the tune of $22 billion in material damages.
I think over 11,000 or 12,000 people killed, roughly 60 million people affected.
NASA’s Earth Observatory has captured the devastation caused
by 2022’s extreme monsoon rains, the country’s worst flooding in a decade.
But if you look at the countries most responsible for climate change, Pakistan isn’t one of them.
Since 1850, the U.S. has cumulatively emitted more than 500 billion tonnes of CO2.
That’s nearly double the next largest emitter, China, and three times that of Russia.
And yet, the risk of humanitarian crises and disasters stemming from climate change for
these countries is relatively low.
Joint research from the European Commission and other international agencies
found it’s generally lower-income, lower-emission countries facing the highest risk.
A ranking of 191 countries placed China as the 77th most exposed nation.
Russia is further down the list at 97, and the U.S. doesn’t even make the top 100.
In Washington D.C., international organizations are discussing climate finance for these at-risk nations.
Gaia Larsen works on access and deployment of climate finance
for the research organization World Resources Institute.
The definition of a developing country is that they have less money essentially.
And so, they have less capacity to just simply buy things that one might need
to deal with a catastrophe like emergency food, or stronger bridges.
It really leads these countries to be more at the whim of the weather.
How important is the role of those richer countries in helping
those developing nations combat extreme weather?
It's vital. And I'd say for two reasons. One is they have the money, or more of it,
And just from a justice perspective, they got rich on the problem that we now have.
In 1992, the United Nations Framework Convention of Climate Change was adopted
at the UN headquarters, which in its third paragraph noted this very issue.
Since then, 198 parties have come on board with the environmental treaty and have met regularly
at the Conference of the Parties, otherwise known as COP, to make decisions regarding
the implementation of the document.
In 2009 at COP15, developed countries committed to jointly mobilizing $100 billion
annually in climate finance by 2020, to support developing countries with reducing
emissions and adapting to climate change.
In 2015, the target was delayed to 2025.
In 2020, those developed economies provided $83.3 billion, falling $16.7 billion short of the original target.
So they've gotten up to around 80%. It's a lot of times an internal politics issue.
The people within those countries think well, why are we spending money over there?
We should be spending it here.
Egypt, the host of the COP27, want climate finance to sit at the top of the agenda for the 2022 summit,
with key ministers calling on governments to come through on promises made at COP the year before.
Will we be moving towards some sort of financing facility?
And what might that look like? And what is the process for doing so?
Right now, the big issue is that a lot of it is coming in the form of loans.
Here’s a breakdown of how much developed nations have paid toward their fair share
of the $100 billion climate finance target.
While four countries have contributed well over 100% of their fair share,
in the case of Japan, France and Germany, most of that money is in the form of loans.
And it’s not just countries that are lending money to address climate change.
For example, the International Monetary Fund announced the Resilience and Sustainability Trust
in April 2022, which the fund says will provide long-term affordable financing
for countries facing challenges like climate change.
These are loans on the best possible terms that the IMF has ever provided in its history.
Bert Van Selm is the International Monetary Fund’s mission chief for Barbados.
The Caribbean Island is the first recipient of the new loan-based Resilience and Sustainability Trust or RST.
A country like Barbados faces enormous challenges related to climate and addressing those challenges
will require a lot of financing. So in the past, our longest loan was for 10 years.
The new facility that we've set up is twice that, and it comes with an underlying program
that is focused on addressing climate challenges, mitigation, adaptation,
in the case of Barbados, very importantly, the switch to 100% renewable-based economy by 2030,
so long-term finance at low rates, that is catalytic and brings in other players as well.
How would you be able to track that the money was being spent on green initiatives?
We need to be clear that what the IMF does is not project lending.
So, we don't say you’re getting this money from us and you need to spend it on electric buses
or anything like that but it's up to the country's authorities to decide what exactly to spend that on.
It works much better if you leave the initiative with country authorities and then support those policy plans.
But critics say more debt is the last thing these countries need.
Of course, a grant is always for a country going to be better than a loan.
So there are others in this spectrum that provide grants, in particular the European Union,
that's also very much appreciated, but then we're talking about much smaller amounts.
So the one doesn't exclude the other, grants are great, but to address
the huge challenge of climate change, you're going to need loans as well.
For a country like Pakistan, whether the conditionality is climate-tied or otherwise,
it's exactly the same problem. You owe. You bring up something of a debt,
maybe the terms can change a bit, and you have these massive conditionalities
attached to the loans that you get, right? That fundamentally hasn't changed.
It doesn't mean much anyway, by the way, because they guarantee to put you into the debt trap.
So would you say the answer is then to just wipe these debts and start paying out reparations really?
No, I think there's a lot of conceptual work that needs to go
into essentially sort of explaining what it is that is needed and why.
Debt cancellation absolutely has to be part of the answer.
Non-debt-creating finance and non-condition-bound finance is also part of the answer.
Debt cancellation is not a new concept.
In 1996, the G7 group of rich countries created the Heavily Indebted Poor Countries initiative
to cancel a portion of the debts of some of the most impoverished countries,
providing they implement IMF and World Bank economic policies.
By 2018, more than $100 billion of debt had been wiped out
under the scheme and related programs.
Is it realistic to consider that that debt could just be wiped away?
I don't think we're going to see all debt wiped away.
If you, for example, say, look, I can't pay for this debt,
it's too expensive for me, they get hit by worse ratings, or nobody wants to lend to them in the future
when they might need other kinds of loans so it doesn't tend to end well for the countries
because of the backlash that they then receive.
Still, developing countries and their allies are expected to keep pushing for climate justice
through so-called “loss and damage” finance.
This would mean paying up for things that have been lost for good,
whether that be lives or the extinction of a species.
It could also cover crop failure or the cost of rebuilding after a storm.
You absolutely need to have a line of losses and damages, and restitution.
Compensation for losses and damages that developing countries endure
after the worst impacts of climate change has become a hugely contentious issue.
Some developed countries believe providing funding could be construed as an admission of legal liability
and trigger claims on a major scale.
Developed Countries are very scared of that. Throughout the years of the negotiating
around these kinds of topics, they don't want to admit to legal liability.
If it's not going to happen, well, let's take a step back and think about
what are we trying to get through with legal liability? And let's try to get there maybe through other ways.
And that's what people are saying when they're saying, Okay, we'll use different terminologies, etc.