Global Shield, a financial shield to help countries vulnerable to climate risk
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SHARM EL-SHEIKH. Trials of alliance between the 7 richest countries in the world and the 20 most vulnerable to climate change: the attempt was staged this morning in Sharm El-Sheikh when the Finance Minister of Ghana Ken Ofori-Attarepresenting the V20, the group of vulnerable countries, e Svenja SchulzeMinister for Cooperation and Development in the German government, presented the Global Shield against Climate Risksa financial shield against climate risks.
The operation, strongly desired by Berlin, had received the unanimous green light in recent weeks from all members of the G7 under the German presidency, and was launched today, at the beginning of the second, and decisive, week of COP27 work.
The summit
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What worries the delegations massed in the prefabs of the Sharm conference center is above all the tug-of-war over the loss and damage, i.e. the economic aid to be provided to those countries to which extreme weather events inflict “losses and damages”. The recurring example these days is the Pakistanbrought to its knees by last summer’s floods: $32 billion in estimated damages, against the billion disbursed as aid by the International Monetary Fund. Money that often risks sending the countries affected even into a debt spiral.
But who has to pay in the event of losses and damage caused by the climate? “Our countries have been paying for it for some time, in terms of lives lost, infrastructure destroyed, lack of economic growth”, began Ghanaian minister Ken Ofori-Atta. Therefore, the money should be brought out by the rich countriesthose who, by exploiting fossil fuels over the last 200 years, have substantially caused the current climate emergency.
And yet, even if shared in principle, this approach triggers a flood of distinctions when it comes to detail. Starting with the most banal: how can a fire or a flood, the damage they cause, the deaths they cause, be incontrovertibly attributed to global warming?
The Germanwatch report
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The shield designed by the G7 and the V20 tries to give an answer. The idea, simplifying to the extreme, is that the Rich invest in a series of insurance policies ready to intervene in the event of a climate disaster. It is as if someone, having destroyed a road network with his activities, offers to pay insurance for all the other motorists on those roads, to help them pay the costs of any accidents.
In the preparatory documents of the Global Shield against Climate Risks the possible financial instruments to be implemented are listed. To help households and businesses, one thinks of “social protection schemes, livestock and crop insurance, property insurance, business interruption insurance, risk sharing networks and credit guarantees“. But the recipients will also be i governmentsand in that case “the Global Shield will support the integrated development of tools to ensure that money is available when needed and to ensure that it is spent delivering what affected individuals and communities need when they need it most.”
“The most suitable measures will be studied for each vulnerable country”, explained Svenja Schulze representing the G7, warning that “this shield does not want to remove the loss and damage. We hope, however, that it can make an important contribution to solving the problem”.
Fact checking
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Just at Cop27 in recent days the German chancellor Olaf Scholz announced the allocation 170 million euros from Germany ahead of the launch of the Global Shield against Climate Risks. Twenty million he put there France10 theIreland7 the Canada4.5 a Denmark. The first vulnerable countries to benefit will be Bangladesh, Costa Rica, Fiji, Ghana, Pakistan, Philippines And Senegal.
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