Climate Change Reparations – Who Pays?

Sustainable Future

Ahead of COP27 in Egypt, Kevin Trenberth raises some important questions about the cost of climate change

Opinion: Climate change reparations are expected to be one of the main issues at COP27, the next round of international climate talks from November 6-18 in Egypt. Climate change reparations are a new way of looking at how to pay developing countries for damages arising from climate change, on the grounds that most of those countries affected have done little to create climate changes.

Climate change reparations, also referred to as payments for “loss and damage”, account for the economic toll of climate-fuelled disasters, such as floods, wildfires and hurricanes. It also includes slowly-developing climate impacts, such as sea-level rise, that can produce irreversible damage over time.

However, damages and disasters only arise because people and infrastructure have developed and placed themselves in a region that is vulnerable, and perhaps they should not have been there in the first place. Or more attention should have been paid to making sure that the developments were resilient. This makes the issues especially contentious, quite aside from the enormous difficulties of assigning blame.

Climate change is broadly broken down into several parts. The first is the climate information system involving analyses of what is happening and why, and what it implies for the future. The second is the impacts, vulnerability, adaptation and building of resilience. The third is mitigation, which refers to all the options to stop and slow the problem, such as through decarbonisation of economies. Reparation is perhaps the fourth leg of the stool as a new way to pay developing countries for damages arising from climate change.

On October 24, more than 140 US-based climate and development organisations sent a letter to US climate envoy John Kerry urging the Biden administration to commit to meaningful advances in addressing climate-related loss and damage, including an agreement to establish a Finance Facility under the United Nations. However, wealthy nations, such as the United States, have long opposed the idea.

An important aspect often glossed over by the affected countries is that damage and disasters relate not just to the event itself, but much more to the vulnerability of the peoples and infrastructure hit. Indeed, if a major storm occurs over the ocean, the impacts are mostly small, while a direct hit on a major city may cost thousands of lives and billions of dollars of damage. In some cases, the consequences may have been largely unavoidable, but all too often the damages and lives lost are because of far too many people placing themselves, or being placed, in harm’s way, by living in low-lying coastal regions or flood plains for instance

A few examples

Hurricane Harvey made landfall in August 2017, near Houston Texas, with rainfalls in the area exceeding 60 inches (1500 mm). There is no question that the long life and intensity of the storm and extensive heavy rains were enhanced by human-induced climate change. But the greatest damage was to housing and infrastructure built on flood plains without adequate drainage systems or building codes.

The September 2022 floods in Pakistan supposedly affected a third of the population of over 33 million people with over 1600 dead and more than $30 billion in damages. Yet the population of Pakistan grew from 33 million in 1947 to 243 million in 2022 and, as many settled on the flood plain, they were highly vulnerable. Of course, this is true in almost all cases of the flooding in recent times: it was all the people who settled in the flood plain that made it into a disaster.

Another example may be Tuvalu, a small Pacific Island nation, comprised of nine atolls and islands of low and flat grounds with a highest elevation of about 3m and which is rapidly losing its coastline to rising seas. Indeed, coastal erosion and flooding is increasing nearly everywhere in part because of rising sea levels that are clearly associated with human-induced global warming.

Many other examples exist, such as settlements in areas vulnerable to wildfire and without adequate forest management and fire breaks, such as the Tubbs fire in Santa Rosa, California, in 2017.

More generally, even in cases where governments may have taken steps to adapt, a country can lose homes, farmland and jobs, damaging economic growth, but when impacts exceed adaptation, it is considered loss and damage.

Building resilience

The challenge of building resilience and preparing and adapting to an event that may or may not come is fraught with perceived risk and burdened by human nature. There is often the issue of a short-term gain versus longer-term security for something that may not happen but then does. Also, who or what nations should pay for what? Should one area or country, where the perceived risk is less, pay for mitigation in a floodplain where the risk is high?

Climate change-fuelled disasters are predictable because the preparation for their eventuality is inadequate. There is a great need for better planning and building adaptive capacity that increases engineering mitigation measures (such as levees and seawalls and flood control), adheres to building codes, prevents building in floodplains, stops unbridled growth, hardens infrastructure, manages water and drainage systems, develops emergency response plans including evacuation routes and their implementation, along with emergency shelters and power supplies, and provides property and flood insurance that matches the true and changing risk. Reparations after the fact are an inadequate solution.

In New Zealand, there are long-standing issues about management of water, and especially developing the ability to save water in times of excess for times when there is not enough. However, the clearly vulnerable regions are all the coastal zones, where continuing sea level rise guarantees bigger storm surges and erosion. Who should pay for relocation or damage to naïve coastal developments in the past that failed to account for climate change?

Too many people in harm’s way

Emissions of carbon dioxide can be partitioned into emissions per capita times the population. However, demands for energy, food and water mean that it is only the total emissions that count and population matters. Moreover, population matters even more for impacts from climate change.

A major issue is how to apportion the cost of damages to the emissions of a particular industry or country? The proportion of emissions of carbon dioxide, for instance, has varied considerably over time, with developed countries such as the United States and Europe responsible for most emissions in the first part of the 20th Century, but with China overtaking all other countries early in the 21st Century. As carbon dioxide has a long lifetime, total accumulated emissions matter most. But, in addition, losses and damage depend hugely on the resilience and vulnerability of infrastructure and societies. Too many people are living in the wrong places.

It is not surprising, then, that little progress has been achieved on climate change reparations as developing countries, in particular, have sought compensation. By 2030, total developing country damages could exceed hundreds of billions of US dollars, but values vary greatly with region and the uncertainties are enormous. The US and EU have signalled a willingness to discuss the topic at COP27 but there is strong resistance to a specific fund.

Something like the Green Fund, established under the Paris Agreement, may be expanded in some way, but while demands for reparation are increasing, I’m not optimistic that any progress will be made on blame or responsibility at COP27.