Richer countries are starting to make poorer countries pay for the damages of climate change

It was 2 a.m. when floodwaters started flowing into Christopher Bingala’s home. Hurricane Freddy, longest-lived tropical cyclone This recorded event brought heavy rainfall to southern Malawi in 2023. She managed to get her six children to higher ground but lost her home and animals.

As a subsistence farmer, Bingala did not have the resources to start over. But he later received a payment of approximately $750, which he used to build a new home for his family.

Payment is one of the first examples “loss and damage” compensationa new type of financing specifically for disasters linked to climate change. Low-income countries bear the brunt of more intense storms and droughts but do little to produce planet-warming pollution. So last year, richer countries agreed to create a special fund to cover damages from climate change.

So far, approximately 720 million dollars Commitments came from countries such as the European Union, the USA and the United Arab Emirates. However, climate experts warn that this amount will be very insufficient as hurricanes and floods worsen.

in that COP29 climate summit begins In Baku, Azerbaijan, countries are negotiating how much to owe developing countries as part of a larger “climate finance” package that includes loans and investments.

“We hope that the Nordic world and the nations whose economies are fueled by emissions will come to the table and take on their responsibility to look at what they’re causing us,” says Commonwealth Prime Minister Philip Davis. Bahamas.

Finding a way to start over

The devastation caused by Hurricane Freddy has become widespread in many countries Displacing 650,000 people only from their home in Malawi. The country received six months of rain in just six days.

When their house collapsed under floodwaters, Bingala and her family took shelter on higher ground, but the situation quickly deteriorated. They started to run out of food.

“Because of our food shortage, we have come to the point where we are eating the meat of animals that died from the hurricane,” says Bingala. “This was a very difficult moment in my life.”

He and his family, along with thousands of others, were placed in temporary camps. But as a small-scale farmer and fisherman, Bingala had no safety net to rely on. He then received the cash payment, which allowed him to move to a new village and build a better house. There are still challenges; Bingala is still trying to get her children back to school and hopes to have some animals again. But he is glad his family lives in an area less prone to flooding.

“They are better off here because they are not in danger of water shortages that we have in Makhanga,” says Bingala. “This is dry and high land, so my children are good and happy. “They live a happy life.”

Pilot implementation of a system to pay compensation

The payment Bingala received came from the Scottish government. first country to allocate funds especially for loss and damage. funds gone to several countries so far. They were distributed by GiveDirectly, a non-profit organization in Malawi. specializes in providing cash grants to those in need without any conditions.

About 2,700 families received payments of about $750, which could be equivalent to two years’ income in Malawi. Many used the money to rebuild their homes, while others invested in seeds, fertilizer and livestock or sent their children back to school.

“Low-income households in low-income countries have much less protection against extreme events,” says Yolande Wright, GiveDirectly’s vice president of partnerships. “They may not have any insurance. Even if they want to buy, we may not have any insurance products.”

The program in Malawi is, in a sense, a pilot of a larger system for loss and damage compensation. Last year, countries agreed to create funds As a way to compensate for low-income countries that generally have low greenhouse gas emissions. Almost half of emissions since the Industrial Revolution have come from the United States and Europe.

“It is the very poor and low-income households in Malawi who contribute the least to the climate problem,” says Wright. “Many of them do not have access to electricity. They do not have cars or motorcycles.”

A ballooning need for loss and damage financing

Increasingly intense hurricanes, storms and droughts are placing a huge financial burden on developing countries, especially those already in debt. In the Bahamas, Prime Minister Davis said that his country’s national debt increased after Hurricane Dorian in 2019.

“I need to borrow money to pick myself up and rebuild,” Davis says. “40 percent of our national debt is directly attributable to the consequences of climate change.”

Much of the $720 million pledged so far for loss and damage has not yet begun to flow. At the COP29 summit, countries completed the paperwork to establish the fund to be hosted at the World Bank. The fund’s guidelines, such as determining which countries will be funded for what types of damages, have not yet been established.

Many low-income countries have advocated this Funding should go to something beyond disaster recovery. Some could be used to relocate villages in response to sea level rise, or to compensate countries for the loss of important cultural sites or ecological resources such as coral reefs.

As disasters reach extreme levels, the need for loss and damage financing is expected to increase further. A recent study found that it would reach $250 billion per year by 2030. Davis says he hopes richer countries will contribute more to “enlightened self-interest” because many humanitarian crises are not confined to country borders.

“If they do nothing, they will be the worst,” Davis says. “What will my people do when my islands are swallowed by the sea? “They will either become climate refugees or be condemned to a watery grave.”