Lower-income countries paying the highest price as emissions and fossil fuel profits rocket
An average of 189 million people per year have been affected by extreme weather-related events in developing countries since 1991 – the year that a mechanism was first proposed to address the costs of climate impacts on low-income countries – according to a new report published today.
The report, The Cost of Delay, by the Loss and Damage Collaboration – a group of more than 100 researchers, activists, and policymakers from around the globe – highlights how rich countries have repeatedly stalled efforts to provide dedicated finance to developing countries bearing the costs of a climate crisis they did little to cause.
Analysis shows that in the first half of 2022 six fossil fuel companies combined made enough money to cover the cost of major extreme weather and climate-related events in developing countries and still have nearly US$70 billion profit remaining.
The report reveals that 55 of the most climate-vulnerable countries have suffered climate-induced economic losses totalling over half a trillion dollars during the first two decades of this century as fossil fuel profits rocket leaving people in some of the poorest places on earth to foot the bill.
The report also reveals that the fossil fuel industry made enough super-profit between 2000 and 2019 to cover the costs of climate-induced economic losses in 55 of the most climate-vulnerable countries almost sixty times over.
Finance to address ‘loss and damage’ – the term used to refer to the destructive impacts of climate change that aren’t avoided by mitigation or adaptation – is set to be the defining issue of COP27, the UN climate talks taking place in Sharm El-Sheikh in November, as developing countries call for action after decades of delay.
The report estimates that since 1991, developing countries experienced 79 per cent of recorded deaths and 97 per cent of the total recorded number of people affected by the impacts of weather extremes. Analysis also shows that the number of extreme weather and climate-related events that developing countries experience has more than doubled over that period with over 676,000 people killed.
The entire continent of Africa produces less than four per cent of global emissions and the African Development Bank reported recently the continent was losing between five and 15 per cent of its GDP per capita growth because of climate change.
Lyndsay Walsh, Oxfam’s climate policy adviser and co-author of the report said: “It is an injustice that polluters who are disproportionately responsible for the escalating greenhouse gas emissions continue to reap these enormous profits while climate-vulnerable countries are left to foot the bill for the climate impacts destroying people’s lives, homes and jobs.
“This is not a future reality, it is happening now, as we are seeing with the devastating floods in Pakistan and unprecedented drought in East Africa.
“But it is not too late. COP27 starts in just two weeks and finance to address loss and damage must be agreed. News that the issue will be on the agenda for COP27 is welcome and an ambitious outcome is critical not only for those dealing with climate impacts in developing countries, but also for maintaining trust and credibility.
“We must end this delay. The best time to start was 31 years ago, the next best time is now.”
At COP26 last year, developing countries were united in calling for the establishment of a Loss and Damage Finance Facility, to ensure a comprehensive approach to climate impacts, but this was shot down by developed countries in favour of a three-year dialogue – the Glasgow Dialogue – with no mandated outcomes.
Professor Saleemul Huq, director of the International Centre for Climate Change and Development in Bangladesh, said: “As one of the few people who has attended every single COP over the last three decades, I have personally witnessed the resistance from the developed countries to every attempt by the vulnerable developing countries to discuss loss and damage from human-induced climate change. If it doesn’t get on the agenda from COP27 onwards the UNFCCC will have failed in its responsibilities.”
The catastrophic flooding in Pakistan this year, directly affected at least 33 million people and costs were estimated at over US$30 billion. Yet the UN humanitarian appeal for the floods is set at only US$472.3 million (just over one per cent of what is needed), and only 19 per cent funded. The flood response is not considered to be anywhere near enough to help the millions of people who have lost their livelihoods and homes and face hunger, disease and psychological impacts.
Pakistan will have to take out another IMF loan to help recover from the floods, in contrast, funds from a loss and damage finance facility would be new and additional and come in the form of grants, to ensure the country was not burdened by debt in the aftermath of a climate-induced disaster.
Every fraction of a degree of further warming means more climate impacts with losses from climate change in developing countries estimated to be between US$290 billion and US$580 billion by 2030. These estimates do not include non-economic losses and damages, such as psychological impacts and biodiversity loss, which are profound but cannot be translated fully into monetary terms, meaning the true cost is far higher than what is accounted for.
With current global policies projected to result in about 2.7°C warming above pre-industrial levels, and huge gaps between the amount of finance required by developing countries to adapt and what is being provided, the urgent need for finance to address loss and damage is clear.
Notes to editors:
- The full report ‘The cost of delay: why finance to address Loss and Damage must be agreed at COP27’ is available here. (link will go live on 24 October – pdf available on request)
