Climate disaster ‘Global Shield’ scheme launched at COP27

A SCHEME to give speedy financial support to communities battered by climate disasters was launched yesterday by a group of rich and developing nations at the UN COP27 summit in Egypt.

The “Global Shield against Climate Risks” comes as many of the most vulnerable nations are also demanding wider compensation for the “loss and damage” they have already suffered from a heating planet.

The initiative, backed by the G7 and launched with initial funding of more than $200 million (about R3.4 billion) , aims to provide “prearranged financial support designed to be quickly deployed in times of climate disasters”.

The Global Shield project “is long overdue”, said Ken Ofori-atta, Ghana’s finance minister and chairperson of the V20 group of nations most vulnerable to the effects of climate change.

“It has never been a question of who pays for loss and damage, because we are paying for it,” he said in recorded remarks at the summit.

“Our economies pay for it in lost growth prospects, our enterprises pay for it in business disruption, and our communities pay for it in lives and livelihoods lost.”

He said he hoped the project would help the most vulnerable communities but also aid wider understanding of the challenges emerging economies face as they are being hammered by climate-induced floods, heatwaves or droughts.

A first group of nations that will benefit from the scheme includes

Bangladesh, Costa Rica, Fiji, Ghana, Pakistan, the Philippines and Senegal.

Nations at the COP27 agreed this year for the first time to include the thorny topic of loss and damage on the formal agenda, after years of reluctance from richer polluters wary of creating open-ended liability.

Germany said the Global Shield scheme, largely in the form of insurance that pays out immediately after, or even before, a climate disaster, would be part of a broader effort to respond to loss and damage.

Svenja Schulze, Germany’s minister of economic co-operation and development, stressed the scheme was not “a tactic” to sidestep calls for a specific loss and damage funding mechanism.

“The Global Shield isn’t the one and only solution for loss and damage, certainly not,” she said, adding that more funding will be needed to cover more countries.

“Those most affected by climate impacts need practical action now.”

The Global Shield is designed to provide financial, social and credit protection and insurance for loss of crops, livestock, property and other goods. It also promises to support the swift delivery of funds for humanitarian agencies responding to disasters.

A formal loss and damage funding stream would likely go further, also covering longer-onset climate impacts such as sea level rise and threats to cultural heritage.

Besides $170m from Germany, funding includes $60m from France, $10m from Ireland, $7m from Canada and $4.7m from Denmark.