G7 wants to profit from suffering, say ‘Shield’ critics

A G7-led plan dubbed “Global Shield” to provide funding to countries suffering climate disasters was launched at the UN COP27 summit on Monday to a mixed response.

Co-ordinated by G7 president Germany and the V20 group of climate-vulnerable countries, it aims to rapidly provide pre-arranged insurance and disaster protection funding after events such as floods, droughts and hurricanes.

Backed by €170m (R3bn) from Germany and €40m (R715m) from other donors, the Global Shield will in the next few months develop support to be deployed in countries including Pakistan, Ghana, Fiji and Senegal when events occur. Some were cautious, however, concerned it undermined efforts to secure a substantive deal on financial help for a “loss and damage” - a campaign umbrella phrase for irreparable damage wrought by global warming.

German development minister Svenja Schulze said the Global Shield aimed to complement, not replace, progress on loss and damage.

“It is not a kind of tactic to avoid formal negotiation on loss and damage funding arrangements here,” Schulze said. “Global Shield isn’t the one and only solution. We need a broad range of solutions.”

Some research suggests that by 2030, vulnerable countries could face $580bn (R10-trillion) per year in climate-linked “loss and damage.”

Ghana’s finance minister Ken Ofori-atta, who chairs the V20 group of vulnerable countries, called the creation of the Global Shield “long overdue.”

Yet some vulnerable countries questioned the scheme’s focus on insurance, with insurance premiums adding another cost to cash-strapped countries that have low carbon emissions.

“We are not yet persuaded, especially of the insurance elements,” said Avinash Persaud, special envoy on climate finance to Barbados Prime Minister Mia Mottley.

“Using insurance is a method in which the victim pays, just in instalments in the beginning,” he said, adding that loss and damage finance should be grant-based.

Michai Robertson, a negotiator for the Alliance of Small Island States, said even subsidised insurance premiums could enable insurance companies in wealthy countries to profit off poor and vulnerable nations’ suffering.