What is the GSI & its importance?
The Global Shield Initiative (GSI) is a collaborative project of the G7 and the V20 Group of 58 vulnerable countries that intends to strengthen the response to loss and damage caused by climate change. Through this project, local communities, businesses, and households will have access to fast and reliable funding in the event of a disaster, similar to insurance schemes in place in several industrialized countries. As a result, the GSI will be better able to promote economic and social growth and increase the resilience of local communities. Critics, however, argue that the scheme is just an excuse to delay negotiations on a dedicated finance system for climate damages.
In the words of Ghana’s Finance Minister and V20 Chairman Kenneth Nana Yaw, “The Global Shield is long overdue. It has never been a question of who pays for loss and damage because we are paying for it. Our economies pay for it in lost growth prospects, our enterprises pay for it in business disruptions and our communities pay for it in lives and livelihoods lost”.
“Many climate impacts are increasingly becoming uninsurable even in rich countries. Think about flood insurance in the United States & increasingly wildfire insurance, and what about existential threats like sea level rise and desertification that are swallowing up lands where people live. Many millions of people will be displaced. What is the insurance exactly giving to deal with these kinds of impacts?” – These are the words of Rachel Cleetus, the Policy Director, Union of Concerned Scientists at the recently concluded 27th United Nations Climate Change Conference of Parties (COP27) global summit in Egypt.
Prelude to GSI in COP27
Advances in the loss and damage debate were first raised at climate talks in Glasgow last year. Scotland’s government acknowledged the losses and damage and pledged roughly $2.3 million, making it the first developed country to do so. Activists were encouraged by the so-called “de-tabooing” of the problem, but the Global South was left disappointed by COP26’s lack of concrete results, which included only a flimsy commitment to a “conversation” on the topic.
Two months ago, the idea of creating a separate fund for loss and damage compensation seemed far-fetched, if not impossible. The United States, European Union, and other affluent countries vehemently opposed it because they were afraid that taking responsibility for their historical part in the climate issue would subject them to endless liability and leave them on the line for hundreds of billions of dollars. In 2030, the cost of losses and damages may reach as high as $580 billion and between 1 to 1.8 trillion dollars by 2050, according to the Heinrich Boell Foundation.
The resistance to a separate fund, however, has faded away in Egypt. At COP27, developing countries presented a unified front, pressure increased from NGOs, media coverage expanded, and the European Union reversed course at the last minute, leaving the United States as the only major power to oppose the agreement.
Still, the United States and other wealthy countries tried to block the issue from being discussed at COP27. However, increasing calls for action from activists and developing nations, as well as severe floods that submerged a third of Pakistan this summer—a country that has historically contributed less than 1 per cent of carbon emissions—have all contributed to a resurgence of interest in the topic.
Current Situation of the GSI
During the COP27 on November 14th, 2022, the Global Shield Initiative was introduced. It was set up to help those in need of disaster and insurance coverage get the money they need as soon as possible. According to Al Jazeera’s reporting, based on research published this year by the V20 group, countries have lost almost $525 billion due to climate consequences since 2000. Meanwhile, over the period from 1850 to 2015, nearly 80% of all human-caused carbon emissions came from the G7 countries. Emissions have increased considerably in the previous few decades in developing countries with expanding economies, such as China and India.
This year, China surpassed the United States and India as the top emitter. As a result of these changes, the G7 has been trying to get China and other wealthy countries like Singapore, South Korea, and Saudi Arabia to foot the bill for climate action, which has led to blame games and finger-pointing during the climate negotiations. Vulnerable countries demanded that loss and damage funds be made available by the international community for developing and impoverished countries that are most impacted by climate change.
At COP27, Germany pledged an initial contribution of $172 million. The French government has pledged $60 million over the next three years, with an initial investment of $20 million. Funding comes from both Canada ($7m) and Denmark ($4.7m). The President of the United States, Joe Biden, has also expressed support for the proposal.[6] The GSI could mean that certain countries like Qatar, China and Saudi Arabia from the south-south cooperation could be expected to contribute to the funding process.
In 2022, Nigeria lost nearly $17 billion in damages from Flood impacts in the 12 most impacted states. Pakistan’s flood loss and damage in 2022 is about $30 billion, and Vanuatu’s economic losses for the 2015 storm crisis are around $700 million. A report from Basque Centre for Climate Change states that by 2030, developing countries will need between 290 to 580 billion dollars to cope with climate-related loss and damage impacts.
The first to receive aid from Global Shield will be Bangladesh, Costa Rica, Fiji, Ghana, Pakistan, the Philippines, and Senegal. However, any nation on the OECD Development Assistance Committee’s list of countries eligible for official development assistance may also apply.
Even looking at the total sum of the contributions that have been pledged during the COP27 and comparing it to what is needed for loss and damage costs, we see that it falls short by a long margin. This has created lots of doubts and queries amongst civil society groups who wish to enquire if GSI is a means to avoid taking full responsibility for loss and damage caused by big polluters (developed countries) which they have admitted.
Again, Rachel Cleetus at the COP27 stated that the scale of the recently provided funding is off the mark. In her words, “…countries are putting money on the scale of millions, and the needs they have admitted are rising into the billions and trillions.”.
Author: Amaefule Excel & Peter Oyefolu