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‘Global Shield’ Climate Disaster Aid Plan Launched at COP27

At the United Nations COP27 summit, a G7-led plan called “Global Shield” was launched to provide funds to countries suffering from climate disasters, although some questioned the effectiveness of the planned scheme.

Coordinated by Group of Seven President Germany and the Vulnerable Twenty (V20) group of climate-vulnerable countries, the plan launched on Monday aims to rapidly provide pre-arranged insurance and disaster protection funds after events such as floods, droughts and hurricanes.

Backed by €170 million ($175 million) in funding from Germany and €40 million ($41 million) from other donors, including Denmark and Ireland, Global Shield will develop support to deploy in countries like Pakistan in the coming months. , Ghana, Fiji and Senegal when the events occur.

However, some countries and activists were wary, concerned that the plan could harm efforts to secure a substantive deal on financial aid for so-called “loss and damage,” the UN jargon for irreparable damage caused by warming. global.

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German Development Minister Svenja Schulze said Global Shield was intended to complement, not replace, progress on loss and damage.

“It’s not a kind of tactic to avoid formal negotiation on loss and damage financing arrangements here,” Schulze said. “Global Shield is not the only solution for loss and damage. Certainly not. We need a wide range of solutions.”

Some research suggests that by 2030, vulnerable countries could face $580 billion per year in climate-related “loss and damage.”

Ghana Finance Minister Ken Ofori-Atta, who chairs the V20 group of vulnerable countries, called the creation of Global Shield “long overdue”.

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“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 in the Egyptian resort city of Sharm el-Sheikh.

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

‘We are still not convinced’

However, some vulnerable countries questioned the scheme’s focus on insurance, as insurance premiums add another cost to cash-strapped countries that are low carbon and contribute less to the causes of climate change.

“We are still not convinced, especially on the insurance elements,” Avinash Persaud, special envoy on climate finance for Barbados Prime Minister Mia Mottley, told the Reuters news agency.

“Using insurance is a victim pay method, just in installments at first,” he said, adding that loss and damage funding should be grant-based.

It was not immediately clear how much of the Global Shield funding announced so far was in grant form.

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Michai Robertson, a negotiator for the Alliance of Small Island States, which is championing calls for a new UN loss and damage fund at talks this week, said even subsidized insurance premiums could allow insurance companies in rich countries benefit from poor and vulnerable nations. ‘ suffering.

“There is an inherent injustice in them benefiting from our losses and damages,” he said.

‘Life and death’

A formal stream of loss and damage funding would likely go further and also cover long-term climate impacts such as sea level rise and threats to cultural heritage.

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The V20 bloc, made up of 58 developing countries, published research this year that estimated that countries had lost some $525 billion from climate impacts since 2000.

Ninety-eight percent of the nearly 1.5 billion people in the V20 countries have no financial protection, it said.

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“We are talking about people who live below the poverty line; they’re not going to buy insurance,” Rachel Cleetus, senior economist at the climate program at the Union of Concerned Scientists, told the AFP news agency.

“Insurance can help you to some extent, but climate change is now creating conditions in many parts of the world that are beyond the limits of what is insurable,” he said, referring to rising sea levels, desertification and the massive displacement of populations.

Teresa Anderson of ActionAid International said the scheme showed the global community recognized the need to act on loss and damage, but said it was a “distraction” from negotiations on a dedicated climate damage financing mechanism.

“Everyone knows that insurance companies, by their very nature, are reluctant to provide coverage or reluctant to pay,” he said.

“But when it comes to loss and damage, it’s a matter of life and death.”

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