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Climate Damages Paid to Poorer Nations Faces Divided Congress

Dec. 1, 2022, 10:30 AM

Developing nations won an historic deal at global climate negotiations in Egypt to establish a fund to help pay for catastrophic climate impacts, but meaningful US support is likely to face strong political headwinds with Republicans about to take control of the House.

While the agreement is in the early stages, a so-called climate loss and damage fund would see richer, developed nations that have historically released the bulk of emissions contribute money to help developing nations facing climate change effects. The agreement could pave the way for compensating nations that bear little responsibility for climate change for the irreversible impacts they have experienced.

Countries committed to establish the loss and damage fund in a final agreement hammered out in the last hours of COP27, the United Nations climate summit held in November in Sharm El Sheikh, Egypt.

Climate advocacy groups celebrated the COP27 decision as an historic win for vulnerable nations that “sends a ray of hope to people whose human rights have been harmed by climate change,” said Chiara Liguori, Amnesty International’s climate justice adviser.

But an agreement is the first of many steps to come, and there remains significant disagreement over whether donors should be limited to only richer, developed nations and not China, which is now by far the world’s largest emitter. The outlook for the US contributing to such a fund rests with a divided Congress and the degree to which advocates can convince the Biden administration to make a case for its merits.

Sen. John Barrasso (R-Wyo.), a member of Republican leadership, suggested there may be significant hurdles for US contributions to the fund.

“Sending U.S. taxpayer dollars to a U.N. sponsored green slush fund is completely misguided,” he said. “The Biden administration should focus on lowering spending at home, not shipping money to the U.N. for new climate deals. Innovation, not reparations, is key to fighting climate change.”

‘The United States Can’t Pay’

Committing US funds to a global loss and damage fund would almost surely require congressional cooperation, which may be hard to find with Republicans controlling the House and Democrats holding only a narrow Senate majority in the next Congress.

International climate aid interfaces with foreign policy spending, which means marshaling Congress to appropriate necessary funding, according to Loyola University New Orleans law professor Karen Sokol.

Convincing Congress and its constituents of the merits of loss and damage is a crucial first step for the Biden administration, Sokol said.

“Biden’s not done that, no previous administration that has made climate any sort of priority has done that, and that’s essential,” she said.

Republicans could create new obstacles to the Biden administration’s pledge for continued climate aid funding, amid concerns the US doesn’t have billions of dollars to funnel into a loss and damage fund.

“Simply put, the United States can’t pay,” said Alex Flint, a former staff director for Senate Energy and Natural Resources Committee Republicans.

“We could give a few billion dollars now and then, but we’re $31 trillion in debt and face trillion dollar-per-year deficits for the foreseeable future,” said Flint, now executive director of the Alliance for Market Solutions, which backs a carbon tax. “Even if we were willing to pay, we simply don’t have the resources, or at least enough to reasonably compensate damages.”

Part of the problem is that loss and damage has never been pushed as a foreign policy priority that could actually shape a public conversation, as has been the case with the US response to the war in Ukraine, Sokol noted.

There’s some evidence that voters see the merits of supporting developing nations under climate strain. A joint poll from Politico and Morning Consult published in November reported that a slim majority of surveyed voters said the US does bear some responsibility to compensate poorer nations with less emission contributions.

US Backing

The US signed on with more than 200 other countries to support loss and damage compensation at the summit after the European Union backed such funding late in the talks.

US support signaled a reversal for the world’s biggest historical emitter, which had previously resisted any fund that could suggest liability for climate damages.

President Joe Biden’s top climate envoy, John Kerry, noted that the contributions expected to come from richer developed nations would be voluntary.

The US backs global efforts that “respond to the devastating impact of climate change on vulnerable communities around the world, including through a fund that will focus on what the world can do now to support particularly vulnerable countries in managing the impacts” of a changing climate, Kerry said as negotiators closed in on a deal Nov. 20.

Kerry also touted Biden’s past pledge to scale up international climate aid to more than $11 billion, “which would make us the single largest contributor of climate finance.”

Climate Fund Realities

Wealthier European nations and the US have contributed billions to climate funding for developing nations, but that money is meant to help them access clean energy and other low-carbon technologies to reduce emissions. Richer nations also have contributed to other aid to help vulnerable nations adapt to climate impacts such as rising sea levels.

But those wealthier nations have fallen short of the $100 billion a year they pledged for such climate aid, and some climate advocacy groups are skeptical that similar promises for loss and damage compensation will amount to significant funding.

In 2020, more than a decade after developed nations pledged the annual $100 billion in climate aid, the fund totaled just $83.3 billion, according to a report from the Organization for Economic Co-operation and Development.

The US has contributed significant sums for climate finance, including more than a billion dollars to the Green Climate Fund dating to the Obama administration.

But tallying how much the US is spending on international climate finance depends on how programs are categorized. The Congressional Research Service put the annual total at just over $1 billion in the most recent appropriations bill for fiscal 2022, according to a March report. Biden had requested $2.5 billion for the year, CRS said.

But Biden in September 2021 pledged to increase annual US climate finance to $11.4 billion a year, a figure that might be unrealistic given the GOP House takeover.

To contact the reporter on this story: Jennifer Hijazi in Washington at jhijazi@bloombergindustry.com

To contact the editor responsible for this story: Zachary Sherwood at zsherwood@bloombergindustry.com