New climate crisis fund plan launched
SHARM EL SHEIKH: G7 and the vulnerable 20 (V20) of 58 climate vulnerable economies launched the Global Shield against Climate Risks, an initiative for pre-arranged financial support designed to be deployed in times of climate disasters, the German government that chairs the G7 said on Monday.
As COP27 moved to the second week of climate negotiations that will culminate in decisions by November 18, the beginning of the week was marked by significant announcements, including the Global Shield and of India releasing its “long term strategy for low carbon development” to meet its goal of net zero emissions by 2070.
The Global Shield is among the first concrete mechanisms for climate funding — money that was meant to flow from developed nations to developing and at-risk countries but has largely been lacking. However, the new scheme is structured in an insurance mechanism that experts expressed scepticism over.
Initial contributions include around 170 million euros from Germany and more than 40 million euros from other countries. In addition, a broad coalition of countries, multilateral institutions, non-state and private sector partners has underlined institutional commitment to Global Shield.
The first recipients will include Bangladesh, Costa Rica, Fiji, Ghana, Pakistan, the Philippines and Senegal.
Experts, however, cautioned that such an initiative cannot replace the need for Loss and Damage funding under the United Nations Framework Convention on Climate Change that is being sought by vulnerable nations.
“The Global Shield cannot be hyped up as a solution. Disproportionate focus on a new mechanism that does not cover slow onset events such as rising sea levels or loss of language and culture cannot meet the needs of communities on the ground,” said Harjeet Singh, Head of Global Political Strategy, Climate Action Network International.
In 2009 at COP15, developed countries pledged to contribute $100bn dollars in climate financing for developing nations starting 2020.
“As part of our Climate Prosperity Plan to reduce the 98% financial protection sinkhole, the Global Shield will play a key role in resourcing financial and social protection packages to protect our economy, our enterprises and our communities...,” said Ken Oforiatta, V20 Chair, Ghana Finance Minister. Recent V20 research found that 98% of the nearly 1.5 billion people in V20 countries do not have financial protection.
In terms of implementation, the Global Shield will align behind vulnerable country strategies for closing protection gaps using a broad range of appropriate instruments. At the household and business level, these instruments comprise livelihood protection, social protection systems, livestock and crop insurance, property insurance, business interruption insurance, risk-sharing networks, and credit guarantees. At the level of governments, humanitarian agencies and NGOS, the Global Shield will support the integrated development of instruments used to ensure that money (money in) is available when needed, and the processes to ensure that the money is spent on providing what the affected need when they need it most (money out).