Fair finance for loss and damage in an era of escalating climate impacts

The amount of money needed for UN humanitarian appeals involving extreme weather events like floods or drought is now eight times higher than 20 years ago — and donors are failing to keep up, reveals a new Oxfam brief today. For every $2 needed for UN weather-related appeals, donor countries are only providing $1.

Average annual extreme weather-related humanitarian funding appeals for 2000-2002 were at least $1.6 billion and rose to an average $15.5 billion in 2019-2021, an 819 percent increase.

Rich countries responsible for most of today’s climate change impacts have met only an estimated 54 percent of these appeals since 2017, leaving a shortfall of up to $33 billion.

The countries with the most recurring appeals against extreme weather crises — over 10 each — include Afghanistan, Burkina Faso, Burundi, Chad, Democratic Republic of Congo, Haiti, Kenya, Niger, Somalia, South Sudan and Zimbabwe.

The report, “Footing the Bill“, says that the increasing frequency and intensity of extreme weather events due to climate change is putting more pressure on an already over-stretched and underfunded humanitarian system. The costs of the destruction from these storms, droughts and floods are also increasing inequality; people in poorer communities and low-income countries are the worst hit yet they lack the systems and funding that wealthier countries have to cope with the effects. The richest one percent of people on Earth are emitting twice as much carbon pollution as the poorest half of humanity.

The UN appeals focus on the most urgent humanitarian needs, but that barely scratches the surface of the real costs in loss and damage that climate change is now wreaking on countries’ economies.

The economic cost of extreme weather events in 2021 alone was estimated to be $329 billion globally, the third highest year on record. This is nearly double the total aid given by rich nations to the developing world that year.

The costs of loss and damage to low- and middle-income countries — for instance, the money needed to rebuild homes and hospitals or provide shelter, food and emergency cash transfers after a cyclone — could reach between $290 billion and $580 billion a year by 2030. This does not account for non-economic losses such as the loss of life, cultures and ways of living, and biodiversity.

UN appeals represent just a small part of the costs of climate disasters for people who are especially vulnerable and they only reach a fraction of the people who are suffering. Oxfam’s research shows that UN appeals cover only about 474 million of the estimated 3.9 billion people in low- and middle-income countries affected by extreme weather-related disasters since 2000, equivalent to one in eight people.

“Human activity has created a world 1.1˚C warmer than pre-industrial levels and we are now suffering the consequences. More alarming still, we will overshoot the 1.5˚C safety threshold on current projections. The cost of climate destruction will keep rising and our failure now to cut emissions will have catastrophic consequences for humanity. We can’t ignore the huge economic and non-economic losses and damages that underlie this picture — the loss of life, homes, schools, jobs, culture, land, Indigenous and local knowledge, and biodiversity,” said Oxfam Executive Director Gabriela Bucher.

“This is the climate chaos we have long been warning about. Many countries that are being hardest-hit by climate change are already facing crises including conflict, food inflation, and the economic impact of the COVID-19 pandemic. This is leading to rapidly rising inequality, mass displacement, hunger and poverty,” said Bucher.

Humanitarian disasters affect men differently than women, who face long-standing inequalities that undermine their ability to cope. Women’s rights and progress towards gender equity are threatened with every disaster. The UNDP estimates that 80 percent of people being displaced by climate change are women.

“Poor countries cannot be expected to foot the bill, and increasing aid — while helpful — is not alone the answer. Paying the cost of climate-driven loss and damages should be on the basis of responsibility — not charity. Rich countries, rich people and big corporations most responsible for causing climate change must pay for the harm they are causing,” said Bucher.

Rich and industrialized countries have contributed around 92 percent of excess historical emissions and 37 percent of current emissions. Africa’s current emissions stand at just 4 percent.

Kenya, Somalia, South Sudan and Ethiopia — where more than 24.4 million people now face severe levels of hunger and food insecurity — are together responsible for just 0.1 percent of current global emissions.

Rich industrialized nations have stymied loss and damage finance negotiations for years. At COP26 in Glasgow, they rejected developing countries’ calls for a new finance facility to address loss and damage and instead agreed to a three-year ‘Glasgow Dialogue’ to discuss future arrangements. “This just added insult to injury,” Bucher said.

Ahead of 56th sessions of the UNFCCC Subsidiary Body for Implementation (SBI) in Germany, which includes the first ‘Glasgow Dialogue’ on loss and damage since COP26, Oxfam urges:

• Rich country governments to pledge bilateral finance to address loss and damage, in addition to existing climate finance and ODA commitments.
• All governments to agree to establish and fund a finance facility for loss and damage at COP27, with annual contributions based on responsibility for causing climate change and capacity to pay.
• All governments to agree to make loss and damage a core element of the UNFCCC’s Gender Action Plan.