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Who pays for the damage caused by climate change?

The climate change debate has in the past surrounded how poorer countries could adapt their economies to climate change and reduce, or mitigate, their emissions with assistance from richer countries. Today a new issue for developing countries has emerged which centres on the notion that richer countries should compensate, vulnerable communities for the “loss and damage” caused by events linked to climate change.

Climate Change may have dire consequences for a large host of parties, the extent of which we do not know. We may see a greater incidence of extreme weather events in the form of heat, storms or flooding which could not only lead to millions of people being displaced but enormous economic loss as a result of the destruction of property or reduced harvest. We may see tropical disease spreading more widely which damages health and casts a burden on our health systems and rising sea levels that may cause large areas of land to become unproductive and uninhabitable. One thing we do know is that incidence of climate change will be unevenly distributed across geographies and that the ability for countries to adapt to such changes will depend upon their economic capabilities. The effects will be varied across income groups within countries and between poor and wealthy nations. The underlying question is who pays for the damage caused by climate change?

In December last year Qatar held the UN climate change talks among 195 nations a result of which was that poorer countries won historic recognition of the plight they face from the effects of climate change. Countries agreed to the principle of “loss and damage”, to help victims of climate change. Whilst opinions are divided over what could practically emerge following the pledge and concerns are raised over whether liability will arise, the conception of the phrase “loss and damage from climate change” has undoubtedly concentrated minds on the fact that it is in the best interest of countries all over the world to start cutting their emissions quickly.

“Loss and damage” refers to situations where mitigation or emission reduction has failed and efforts to adapt to climate change can no longer be implemented. Ronald Jumeau, negotiating in the UN talks for the Seychelles, stated that “if we had had more ambition [on emissions cuts from rich countries], we would not have to ask for so much [money] for adaptation. If there had been more money for adaptation [to climate change] we would not be looking for money for loss and damage. What’s next? Loss of our islands?”. The pledge stopped short of any admission of legal liability or the need to pay compensation on the part of the wealthier nations and key questions remain unanswered. Questions such as whether the funds devoted to “loss and damage” will come from existing humanitarian aid and disaster relief budgets and how the funds will be distributed remain open to discussion. Aside from the procedural difficulties involved in such a pledge it will be difficult to ascertain whether the damage inflicted was caused by climate change or other natural disasters. It will be interesting to see how these questions are answered in this year’s climate change conference in Warsaw.

Let us know what you think. Should wealthier countries compensate poorer communities for the “loss and damage” caused by events linked to climate change?

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Written by Shine Lawyers. Last modified: September 26, 2018.

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