COP-27 Reflections: Loss and Damage, and Cap and Share

The COP-27 climate conference in Sharm-El-Sheikh, Egypt ended a few weeks ago.  FEASTA provided badges to several youth activists to attend and gain entry to the venue.  The delegates’ reports are posted here.

The major statement from the conference, the “Sharm el-Sheikh implementation plan” reaffirms a lot of previously agreed to language, but did not advance it.  As one CNN headline read:

“COP27 summit agrees to help climate victims. But it does nothing to stop fossil fuels.”

The 1.5 degree goal is still there, but without “implementation,” which was the main theme of the conference. This prompts the question: how? 

FEASTA’s Climate Group has a proposal for implementation of the 1.5 degree goal which involves Cap & Share, a Global Climate Trust, CapGlobalCarbon, and climate dividends returned back to people as the start of a World Basic Income.  A recent paper on the topic may be found here. We will discuss this idea further below.

The biggest outcome from COP-27, the Loss and Damage Fund, though often seen as a victory, raises many questions as well.

A Loss and Damage Fund has been the focus of island nations, vulnerable nations, and NGOs supporting them for many years.  If they are being hit by more intense storms, and the cause is the fossil fuels being burned by wealthy nations, then those nations should help the impacted poorer nations bear those increased costs.  The Polluter Pays Principle should be applied, and compensation for loss and damage would put climate justice into action, as the most vulnerable are hit with impacts and the wealthier countries could compensate them.

As Theresa O’Donohoe, a FEASTA member who attended COP-27 noted,

“It makes sense that compensation be paid. It serves to address the injustice of the fact that those who are doing the least are suffering the consequences most. In many cases climate breakdown is being caused by the exploitation of countries worst affected. How is it fair that a country can colonise your home, steal your resources, use them to develop an economy that in turn pollutes the environment that subsequently destroys what’s left of your home. The global north has got rich by exploiting the natural resources of the global south and it is time for retribution…It also follows that if the wealthy countries are paying compensation in the form of loss and damage it is in their interests to limit the loss and damage. There are many benefits to having this fund in place.”

However, the current proposals seem focused on payments to governments (which may be corrupt) instead of targeting the damage payments to the people most harmed by climate destabilization (poor people in poor countries).  And the payments would come from governments (i.e. tax payers, including the working class) from wealthier countries rather than specifically from upstream fossil fuel suppliers.

As Professor Jim Boyce, author of The Case for Climate Dividends notes,

“The result will be something like foreign aid, which has been cynically but not entirely inaccurately described as taking money from poor people in rich countries and giving it to rich people in poor countries.”

FEASTA Delegate Hania Imran from Pakistan wrote in her report from COP-27,

“A loss and damage finance facility was agreed upon. This means finance for those countries that are most vulnerable to the climate crisis as a result of the loss and damage they have faced. For example, the loss and damage Pakistan has faced because of the floods and heatwaves this year.

But we need more, and we need it better. The reason why loss and damage is required in the first place (fossil fuels) has not been acknowledged. We must work to solve why the loss and damage is happening, instead of only cleaning up the mess half heartedly after it has occurred.”

Theresa O’Donohoe also worries that,

“While the concept of payment for Loss and Damage is accepted there are major [unresolved questions] of defining what qualifies as L&D. Can a price be put on loss of culture, loss of livelihood, loss of land, loss of life and more? Industry has the power to protect future profits with Investor State Dispute Settlements but people whose lives are turned upside down because of the fossil fuelled economy have no such protection. The lack of political will and delay tactics that are inevitably behind the bureaucracy demonstrate the uphill battle the most vulnerable face.”

How will that fund be disbursed?  Who gets how much and when?

Imagine Nicaragua gets hit by a storm and gets lots of money to rebuild.  But the storm just misses Honduras.  Their neighbors in Honduras would look over at Nicaragua and reasonably ask, why do you get all this free money and we get nothing?  Is it fair for impoverished countries to wait until they get hit by a hurricane in order to ask for funds?  What if they have important development priorities?  They have no electricity.  Should they hope they get struck by a typhoon as their most reliable development strategy?

One possible answer to those questions would be a policy focused on Cap & Share and a Global Climate Trust.  A Global Climate Trust would set a cap on the fossil fuel supply, and sell permits to the upstream companies.  Then those funds are sent to people on a global per capita basis, not just to people who “won the climate disaster lottery” by being hit by climate disasters that year.  A global universal basic income based on a carbon price under a declining cap on fossil fuels would distribute international development funds equally regardless of the climate impacts to specific countries, and would therefore support the entire Global South, as well as poor people in rich countries.

Is this just pie in the sky, since there is no world government to implement such a program?  A hopeful event at COP-27 provides a potential answer. The Beyond Oil and Gas Alliance (BOGA) announced increasing involvement from a small but vocal group of countries (including Portugal) and subnational entities (including Washington State and California).  Perhaps BOGA can expand its mandate and incubate a new institution that could implement a Cap & Share program, with countries joining in pairs or groups over time, for example, as described in this recent FEASTA paper.

Unfortunately, the meager outcomes at COP-27 once again exposed the flaws in the UNFCCC’s over 20-year quest to address climate change.  The marquee accomplishment, the creation of a Loss and Damage Fund (although with no actual funding in it yet), may provide some needed relief to impacted countries. But it does not address the cause, an economic system dependent on fossil fuel combustion and driven by an infinite-economic-growth mindset and institutions.  If international climate and development NGOs could take a wider view, and start promoting Cap & Share, CapGlobalCarbon, and climate dividends as a start of a World Basic Income, these specific asks could move us beyond generic calls for “climate action” and put a real proposal on the table for COP-28 and beyond.

Featured image author: Bianca Csenki


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