Germany, Belgium pledge funds to tackle climate ‘loss and damage’

Germany and Belgium on Monday (7 November) joined a small number of wealthy countries to commit funding to help developing nations facing damage and losses caused by climate change, committing €170 million and €2.5 million respectively.

While relatively small in size, the funds were symbolically significant in being announced as over 100 leaders gather in Egypt for the UN’s COP27 climate summit – where the urgent need for funding to support developing countries facing climate change-fuelled disasters is set to dominate the talks.

Chancellor Olaf Scholz said Germany would provide €170 million for a “Global Shield” from the Group of Seven rich countries for the V20 group of 58 vulnerable nations, aimed at strengthening insurance and disaster protection finance.

“We will also support those countries hit hardest by climate change in a targeted way in dealing with loss and damage,” Scholz told the COP27 summit in the Egyptian seaside resort town of Sharm el-Sheikh.

Belgium pledged to allocate €2.5 million to combat climate change “loss and damage” out of a new €25 million package of climate-related support for the southern African country of Mozambique from 2023 to 2028.

The Belgian government said its funding would focus on preventing and limiting loss and damage, for example by mapping areas vulnerable to storm surges, and rolling out early warning systems.

Loss-and-damage funding is less politically contentious than explicit offers of compensation for climate-linked losses after disasters have struck – which can be perceived as rich nations paying reparations for causing climate change.

“There is, I think, a moral imperative to call it what it is,” Matthew Samuda, a minister in Jamaica’s economic growth ministry, said of the link between loss and damage funding and historical responsibility.

“But beyond that, there is also the practical need of being able to access funds,” Samuda said.

COP27: What is 'Loss and Damage' compensation, and who should pay?

Nearly 200 countries gathering for the UN climate conference in Egypt are expected to lock horns over whether rich nations should pay compensation to vulnerable states hit by climate-fuelled disasters.

Previously only Scotland and Denmark had pledged funding for climate-linked loss and damage, as well as the Belgian region of Wallonia.

The United States and European Union have blocked poorer countries’ past attempts to secure loss and damage funding, fearing acknowledging liability for their historic contribution to the greenhouse gas emissions heating the planet.

Daniel Ribeiro of Mozambican environmental advocacy group Justiça Ambiental said Belgium’s pledge was “a single act floating in a sea of inaction by the global north”.

“Mozambique is just one of many countries facing this reality. This time we were the chosen, hand-picked recipients, but what about the broader systemic solution?” he said.

Scholz did not specify what the German funding would cover.

Dozens of developing countries have called for a deal at COP27 on a funding facility where rich nations would provide loss and damage cash to vulnerable states.

Mozambique is one of the poorest countries in the world and among the most vulnerable to extreme weather events.

Cyclone Idai, which struck Mozambique in 2019, caused about $1.4 billion in total damage and $1.39 billion in losses, according to an International Labour Organisation assessment.

Egypt pushes 'loss and damage' at top of UN climate summit agenda

Egypt, which is hosting the upcoming COP27 climate summit, is working on how to include compensation for economic losses caused by climate catastrophes on the formal agenda of the November summit, as pressure grows from vulnerable countries to prioritise the issue.

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