Living in the COVID World ... and Beyond #89: My Talk on Who Pays for Climate Catastrophes

On September, I co-presented with a colleague from Nepal, Shail Sathi, on the topic of Loss and Damage in Nepal: Who Pays for Climate Catastrophes.

After some introductory remarks, Shail spoke about the climate catastrophe in Nepal that has occurred over the last few weeks. With words and pictures he described the devastation and the public response in Nepal demanding support from the international community.

I spoke next and here is what I said:

The United Nations focus on climate change started formally in 1995 with the 1st Conference of Parties (COP).   In those early years, the focus was primarily greenhouse gas emission reduction (Kyoto Protocol).  

Discussion of financial assistance to address the adverse impacts of climate change began at COP 6 in 2000.   This led to an agreement in 2001 to establish three funds to provide assistance for needs associated with climate change: Adaptation Fund, Least Developed Countries Fund, and Special Climate Change Fund.

In 2010, the largest UN-sponsored fund, the Green Climate Fund, was created to provide adaptation and mitigation funding for developing countries. 

In 2007, the term loss and damage was first introduced at COP13.   Over the next 8 years, meetings were convened, technical papers were written, approaches for how to address loss and damage were considered, and the Warsaw International Mechanism for Loss and Damage was established.   This culminated at COP21 in 2015 with the Paris Agreement which included Article 8 which recognized the importance of averting, minimizing and addressing loss and damage associated with the adverse effects of climate change, including extreme weather events and slow onset events, and the role of sustainable development in reducing the risk of loss and damage.    This formalized an understanding about the disproportionate impact of climate change on countries of the Global South who did so little to create the climate crisis.   More discussions within the UN-sponsored framework followed about how to operationalize Article 8 – more technical papers, more plans and reviews, and more consideration of various approaches.

At COP27, governments agreed to create a new entity, the Fund for Responding to Loss and Damage  (FRLD), to help particularly vulnerable developing countries to address loss and damage arising from climate change. Governments formally established the fund on the first day of COP28 in November 2023. Following its adoption, a number of governments immediately stepped forward to make pledges.  

The Executive Director of FRLD (Fund for responding to Loss and Damage) is Ibrahima Cheikh Diong from Senegal and an experienced finance and development executive.  

Decision-making for the FRLD sits with its Board which consists of 26 members, 12 from developed countries and 14 from developing countries.

The FRLD is hosted by the World Bank

As of August, 2026, the FRLD had received $822 million in pledges from 27 countries.   For example, Britain, the eighth-largest historical emitter, has put in $54m. The United States, the second largest emitter, withdrew from it altogether last year.

About $342m is actually earmarked for disbursement. The fund’s first (and so far only) call for proposals initiated in early 2026 drew 176 funding requests from 119 countries worth $2.8bn, eight times what is available—and the board at its July meeting put off deciding on any of them until this December.  Nearly four years after it was approved, and 20 years after the term Loss and Damage entered the UN discussions, not a single dollar has reached any country for any disaster.

Nepal filed a formal request with the Fund for Responding to Loss and Damage last week.   The estimated bill for flood recovery and reconstruction at $4.74 billion.   

The money to address loss and damage can and should be made available.   It is not an issue of whether there is money.  The issue is one of collection, addressing financial inequality, and allocation.

We can tax wealthy individuals.  The richest 1% of the world’s population (about 51 million people) has 38% of world’s wealth.   We can tax their wealth.

We can tax financial transactions.

We can increase income taxes on high earners.

We can tax the profits of fossil fuel companies.   Studies have attributed one third of the damage from greenhouse gas emissions to fossil fuel companies.   The Secretary-General of the UN has called on  “all developed economies to tax the windfall profits of fossil fuel companies….”      In addition, governments can end all subsidies provided to fossil fuel companies

We must accept responsibility for the role that our nations of the Global North have played in creating both global wealth inequality and the climate crisis.

And we must look at how we have been conditioned to want more than we need (for ourselves, our people, and our nation), to seek comfort, and to be indifferent to the needs of others.

What are our thoughts and feelings about the Global North’s appropriation of the world’s resources and controlling of so much of the world’s wealth?   We think its unjust, unfair, and wrong.   And we feel righteous indignation or fury about it along with grief and sadness.   It is important that we access these feelings.   If we don’t, we could become bitter or depressed.

This is the work we need to do as citizens of the Global North.

We need to admit that many of us have more than we need.   We need to challenge our own and others’ confused attitudes and behavior.