ECO has been a fly on the wall at a number of meetings with developed country delegations and has been … disturbed, shall we say, by the utter nonsense and misinformation delivered at such meetings. ECO wishes to address the misconceptions and present nothing but the facts on loss and damage.
Myth 1: There is no mandate for finance for loss and damage:
In 2013, the COP gave the Warsaw International Mechanism (WIM) a clear mandate for loss and damage finance. COP decision 2/CP19 says three times that the WIM will enhance or mobilise finance. The Paris Agreement Article 8 also makes clear that finance for loss and damage will be enhanced, or strengthened, on a “cooperative and facilitative basis”.
Myth 2:The WIM has been talking about “finance” by talking about insurance
To be clear: insurance is not finance. Insurance is a measure that you might choose to take with the provided finance; one amongst many activities that a country might decide on as an appropriate strategy in the face of loss and damage. For infrequent and extreme events insurance has a role to play – but overall a limited role. Vulnerable countries should not be paying insurance premiums to insure themselves against impacts from climate change – a problem they had almost no role in creating – it flies against the principles of the Convention, and against that of the Paris Agreement.
Myth 3: The WIM will progress the issue of finance without COP guidance
The WIM has now been in existence for four years and has progressed finance for loss and damage barely at all. It has talked a lot about insurance (refer to Myth 2) but no additional dollars are flowing to the most vulnerable people on the frontline of climate change. The two years of activities in its five year workplan include an item on insurance and a technical paper on finance already available for loss and damage. Developed countries have obstructed and delayed all other work on finance for loss and damage — at times claiming this is because they don’t have a mandate from the COP (refer to Myth 1). So talk of ‘micro-managing’ is a bit rich!
Myth 4: Loss and damages is already covered by international mechanisms on Disaster Risk Reduction and humanitarian assistance, and there is no more money.
Loss and damage finance needs to be additional to adaptation and development finance. We recommend exploring currently untapped sources – innovative, or alternative, sources of finance, e.g. :
- A fossil fuel extraction fee, or a Climate Damages Tax, could be implemented, incorporating equity and the principle of Common But Differentiated Responsibility and Respective Capabilities and could raise between $50billion and $200 billion a year. It could be modelled on similar approaches in other fields – eg. the International Oil Pollution Compensation Funds.
- International air passenger levies could also raise significant funds, and implemented in equitable ways.
- Levies on international aviation and shipping fuel (currently untaxed) have been estimated to be capable of raising $25 billion if implemented on developed countries only at a rate of $30 per tonne of CO2
- Financial transaction taxes, if well implemented, could also help raise hundreds of billions of dollars.