Who Should Pay For Climate Change?

by: Victoria Sampson

The climate crisis has fallen victim to the hyperactivity of global affairs in recent years. Climate change has been repeatedly bumped down the list of to-dos in favour of more immediate calamities – first, it was COVID-19, and now the Russia-Ukraine War. In their wake, little energy was left for reinforcing wide-scale sustainable practices or repairing existing climate damage.

Numerous countries and organizations have taken advantage of the “bigger fish to fry” mentality and have been focusing efforts elsewhere. In some cases this may be a valid digression, but for others there is no compelling justification. Whether the pause in dialogue is simply a by-product of tunnel vision, or it is with egoistic intentions to preserve resources, climate silence is a disadvantageous practice for every country.

Every country in the world is an equal stakeholder in environmental health. It is developing countries, however, that are facing the immediate repercussions of climate change. Though environmental disasters are not biased to socio-economic status, countries found lower on the GDP scale do not possess the resources to mitigate climate damage or to resurrect affected areas once the damage is done. Wealthier nations appear relatively stronger in the face of floods, hurricanes, droughts etc. because they have the ability to bounce back quicker.

The paradox, though already evident, is that wealthier countries often derive their primary exports which is the cause of a higher GDP, through commodities reliant on the environment. The sustainability of our planet is in the interest of every country, but for those driven by profit it should possess even more mental capital in the minds of governments, but unfortunately, it does not. Instead, developing countries are burdened with weaker political and economic structures, as well as increased vulnerability to environmental crises.

Malawi, a small country in southern Africa, experienced torrential flooding in March caused by warming temperatures. Unusually heavy rainfall in Malawi resulted in over 400 deaths, the destruction of villages, and another hit to the already declining economy. Climate change took a toll on the region which is enhanced by its inability to independently recover; unlike other countries, Malawi is not self-sufficient enough to remedy the damage devoid of external aid, leaving it in a state of emergency.

In November of last year, an agreement between 200 nations was manufactured to tend to this exact predicament at the United Nations Climate Conference. At this conference, a fund was erected to provide financial help to developing nations most impacted by climate change, called the ‘loss and damage’ fund. This was the first instance of donations being collected with the intention to use them in rebuilding communities devastated by natural disasters, and Malawi was the first recipient. Though money has been funnelled to target areas vulnerable to climate damage in the past, compensation after the fact has seldom been a consideration. Unfortunately, the intentions behind the loss and damage fund did not translate well into practice, and Malawi remains independent in the triumph of receiving climate justice.

Wealthy nations pledged to contribute millions of dollars to this cause but their philanthropic promise fell short in the fine print. 71% of the funding provided by contributing nations was delivered in the form of a loan rather than a grant. While the money immediately satisfies a country's struggles, it only ends up adding to the debt burden that riddles many of the potential recipients. Malawian Village Chief Isaac Mambundungu said he had no choice but to lead his people to relocate after water destroyed every home in their area. When relocated, the village was met with infertile land and since it was estimated that approximately 80% of people in Malawi live and work off the land by growing maize, the community was left in extreme poverty and with food insecurity. It is insensitive at best, to add repaying a loan to this list of financial burdens that exist in, already struggling and now environmentally traumatized, areas.

While the efforts derived from the UN Conference, may be a symbol of acknowledgement that poorer nations have been disproportionately responsible for climate damage, symbolism appears to be the extent of its accomplishments.

One positive exchange did come from the loss and damage fund however; Scotland was the first nation of the 200 to make a direct payment. The Scottish government has pledged seven billion pounds to the fund, and from that, hundreds of thousands went to Malawi -the issue is that Scotland has been the only nation to follow through on the agreement made this past November. According to the Organization for Economic Cooperation and Development, not only are the monetary promises from the conference not being met – but, the countries in need have collectively agreed that the initial projections were too low to begin with. From this conclusion emerges the obvious question of, why have none of the other 199 nations followed through?

The last few years have seen an unprecedented abundance of global unrest in the form of military, political and medical emergencies. After sending support in various forms to Ukraine and affected nations, it is possible that there was a lack of resources left to distribute elsewhere. Or perhaps, domestic security concerns trumped the promises made to international organizations in the interest of climate change. Though either rationale may be justified for some nations, it is inconceivable to posit that it is ubiquitously applicable, especially for those that remain financially stable.

Norway is an example of a country that is financially stable and has actually been thriving in the face of global calamities. It profited immensely off of the Russian-Ukraine war, yet failed to meet the quota of donations that they promised to contribute to the loss and damage fund as a UN member state. Norway acquired a large sum of income from becoming one of Europe’s primary sources for oil, after sanctions on Russia cut the existing supply to most of the continent. It took months for the government to send adequate aid to Ukraine, and is still underperforming in the name of climate change. What transcends this paradox most of all, is that the method of oil extraction used in Norway is extremely harmful to the environment. Would this not generate a more significant obligation to at least donate some of this excess income to a cause such as the loss and damage fund?

While it may not be immediately lucrative for a government to prioritize the climate crisis, it is indubitably beneficial in the long run. Currently, Norway is among the top European countries ranked by GDP per capita, but what happens when its most profitable export industry, which relies on a healthy ocean life, collapses because of climate damage? Next to oil, the country depends on its fisheries to generate income, but this might become an unreliable source if wealthier nations (Norway included) do not address climate change. The same contrasting logic is applied frequently among wealthy counties: relying on the environment to provide profitable resources, yet destroying it in the process.

Pouring money into COVID-19 and the Russia-Ukraine War may have been inevitable, but if the wealthier nations are truly profit-driven, as it appears they are, investing in the future of commodities and the mitigation of climate damage seems to be the smarter move. Norway and Scotland represent the extremes within this crisis; hopefully, more will follow in the ethical footsteps of the latter. After all, it should be the wealthy countries that pay for climate change, not the poor ones.