ImpactAlpha, Nov. 10 – Scotland kicked off the race with $7 million. Then came $13.5 million from Denmark, $10 million from Ireland, $50 million from Austria, $2.5 million from Belgium.
Germany upped the stakes, pledging €170 million for “loss and damages,” the compensation demanded by low-income, climate vulnerable countries to pay for the costs of droughts, floods and other climate-related impacts they had little hand in creating. The issue made it onto the official COP agenda for the first time at this year’s COP27 summit taking place in Sharm el-Sheik, Egypt.
One of the biggest commitments, however, isn’t coming from the wealthy countries whose fossil fuel-based economic development is responsible for the climate impacts hitting smaller, poorer nations. It’s from African insurers for African communities.
A group of more than 85 insurers on the continent pledged $14 billion to help vulnerable communities deal with the effects of climate disasters.
“We have a massive risk gap in Africa and existing solutions aren’t working,” said Kelvin Massingham of FSD Africa, a U.K. government-backed development organization that is supporting the initiative. “This is the African insurance industry saying let’s come together and try and solve this ourselves.”
Africa’s climate reality
The loss and damages debate has claimed center stage at this year’s “Conference of Parties,” which has been dubbed “the African COP.” Despite being one of the least contributors to global carbon emissions, Africa is among the world’s most climate vulnerable and least prepared regions. Across the continent, many countries are battling rising sea levels, unpredictable rainfalls, drought, floods and other severe weather events.
Last year, Madagascar was struck by a famine that affected more than one million people. The World Food Programme described it as the first climate change-induced famine.
In West Africa, coastal areas are home to nearly one-third of the region’s population and account for more than half of GDP, but degradation is costing the region nearly $4 billion per year.
Africa’s most populous country, Nigeria, has this year experienced the worst floods in a decade, which have displaced 1.3 million and killed hundreds. A report from the U.K. Institute of Development Studies found that flooding in Lagos alone could cause $4 billion in annual loss and damages.
Climate change-induced floods alone could displace half of Africa’s population by 2030. The continent’s rural population is the most vulnerable to these and other disasters.
“The reality of climate change has dawned on us for quite some years now,” said the African Group of Negotiators chair, Ephraim Mwepya Shitima. “Particularly for our rural communities who depend on natural resources for their livelihoods.”
Variable rainfall is affecting agricultural yields, for example, on which the majority of Africans depend for livelihoods and food. “Streams or rivers which used to be their lifeline are drying up and can no longer sustain them. As a result, agricultural productivity is going down,” explained Shitima. “These people can barely harvest enough crops to take them to the next season.”
The Intergovernmental Panel for Climate Change has warned that climate impacts across the African continent will only intensify unless urgent measures are taken.
“Those who pollute the most should pay the most in order to get our planet off this track of climate crisis,” Macky Sall, the Senegalese President and chairperson of the African Union, said at COP on Monday.
African delegates came to Sharm el-Sheik determined to spotlight the human cost of climate change. The Africa Group of Negotiators for COP27 is calling for global financing to match the cost of annual adaptation needs in low- and middle-income countries – as much as $300 billion per year.
The group has called on the global community to specifically recognize Africa’s “special needs and circumstances”; develop a transformative agenda for adaptation; facilitate enhanced financing for loss and damage, and for that funding to be coordinated by the United Nations Framework Convention on Climate Change, or UNFCCC; and recognize the need for a “just transition” to a low-carbon global economy.
The loss and damages issue – while new to the official COP agenda – has been simmering for years.
At COP16 in Cancun, Mexico in 2010, the Cancun Adaptation Framework included considerations for how to address loss and damages associated with climate change in low-income countries. A loss and damages facility was proposed – then vetoed – at last year’s COP in Glasgow, Scotland, as wealthy nations shied away from opening themselves up to massive liabilities.
Loss and damages in vulnerable nations could surpass $1 trillion a year by mid-century.
“If you had your house burned by fires or destroyed by sea-level rise, the [proposal] the rich world wanted was only going to pay for the expert to assess the damage, but not to pay you to rebuild your house,” rebuked Mohammed Adow of Climate Action Network International.
Early commitments at this year’s COP are a promising sign. But many Africans, weary of unkept promises, are skeptical.
The agreement to officially discuss loss and damages steers clear of “accepting liability for polluters,” and leaves the final outcome unclear, said Mohamed Adow of advocacy group Power Shift Africa.
Gambian climate activist Fatou Jeng worries about the extent of international commitment. “We might see developed countries’ unwillingness to provide the needed compensation for the damages,” says Jeng. Nevertheless, she is hopeful that “at the end of the negotiation, we come out with a concrete solution or a tangible outcome on loss and damages.”
To reach the most vulnerable communities, more and better data from the continent will be crucial, said Mayokun Iyaomolere, an environmental activist from Nigeria. “I hope our leaders have encompassing data to show the loss and damage we have experienced here in Africa and demand commensurate reparations,” he said, “and not just data for some urban or peri-urban centers, but for even the most rural areas around the continent.”
Namibian youth activist Deon Shekuza says loss and damages can’t be adequately addressed through one-off payments. “You need a structure that corresponds accordingly.”
Orphan no more
Creating such a structure is what the African Climate Risk Facility, or ACRF, proposes to do. The initiative pledges to provide $14 billion in insurance cover for floods, droughts and other extreme weather events to the continent’s 1.4 billion people by 2030.
Additional initiatives are emerging from COP. Germany’s $170 million-pledge will be channeled through a new World Bank loss and damages vehicle called the Global Shield Financing Facility.
A more formal, global process for loss and damage collections and payments could take years to materialize.
Still, the progress at COP27 is encouraging, said Namibia’s Shekuza, and gives hope to young people “who are actively participating in activities that are related to loss and damage or rehabilitation.”
Loss and damages, he said, “has been an orphan child for a long time.”