Adrianna Hardaway is senior policy advisor for climate with humanitarian aid agency Mercy Corps.
As the Loss and Damage Fund’s board meets this week, it is addressing key issues such as selecting a host country, how to disburse its financial resources, and lobbying for more funding from donors. However, the agenda currently doesn’t address the challenges communities in fragile contexts will face in accessing the fund. This oversight mirrors a recurring pattern in international climate talks, where the needs and realities of fragile and conflict-affected situations (FCS) often receive little to no attention.
FCS, as defined by the World Bank, experience high levels of institutional and social fragility and violent conflict. These nations, which include Afghanistan, Mali and Niger to name a few, often face extreme climate hazards and struggle to cope due to weak institutions, poor governance, and ongoing conflict.
Together, fragility and climate risks make these countries particularly vulnerable to the effects of the climate crisis. Because of their vulnerability, fragile contexts are frequently deemed too risky for climate finance investments, as project partners find it challenging to operate and donors are concerned about their return on investment.
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While the Paris Agreement prioritizes Least Developed Countries (LDCs) and Small Island Developing States (SIDS) for international climate finance, LDCs and SIDS with additional challenges like violent conflict and fragility face barriers, receiving significantly less financing than more stable regions.
Mercy Corps’ analysis reveals that the 10 most fragile states received only $223 million in climate adaptation financing in 2021, less than 1% of total flows. Without prioritizing the unique needs of fragile contexts, the Loss and Damage Fund risks excluding these climate-vulnerable communities once again.
Action needed from the start
There are no references to fragility or conflict in the COP decision that established the Loss and Damage Fund or the Governing Instrument, which sets the Fund’s rules and practices. Additionally, there is no mention of how fragile or conflict-affected places in more “stable” countries will receive financing through the Fund.
Fragility and conflict can limit how communities and institutions across a particular country respond to climate impacts. For example, in Northern Kenya, where Mercy Corps implements several climate adaptation and food security programs, unpredictable rainfall affects water resources, creating pressure on pastoral livelihoods and leading to conflict over water and pasture. Relatively weak institutions at the local government and community level lack the capabilities and resources to plan and implement climate adaptation interventions.
If the Loss and Damage Fund does not address how to support both fragile states and contexts like Northern Kenya now, it will be hard to incorporate these considerations later.
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Advocating for specific challenges in fragile contexts during the Fund’s initial setup is crucial, as evidenced by Mercy Corps’ experience with the multi-billion-dollar UN-backed Green Climate Fund (GCF). Although the GCF has made strides to consider communities affected by climate change, conflict, and fragility through its policies and programs, including endorsing the UAE’s Declaration on Climate, Relief, Recovery, and Peace at COP28 last year, it still struggles to effectively serve communities in fragile contexts.
Prioritizing finance for those who need it most
At the second meeting of the Loss and Damage Fund’s board this week, its members should take the following steps to realize the Fund’s promise and ensure loss and damage financing reaches those who truly need it most:
- Designate a board member for fragile and conflict-affected situations: This idea, initially proposed by Afghanistan for the GCF, was never fully realized. Board Members play an important role in shaping the policies and procedures of the Loss and Damage Fund and in the future, approving projects. Additionally, an active observer from civil society can represent the views of FCS at Board meetings
- Develop a framework to identify “particularly vulnerable” vountries: The Loss and Damage Fund board will need to determine which countries are particularly vulnerable to climate change and thus, eligible to receive financing. To ensure a comprehensive understanding of vulnerability, the LDF must include fragility metrics such as economic, political, social cohesion, and security dimensions in any forthcoming vulnerability framework.
- Develop and approve operational policies and frameworks for fragile contexts: To effectively utilize loss and damage finance, the Fund should adopt policies and tools that allow fragile contexts to flexibly respond to shocks and disrupt the climate-conflict cycle. Mercy Corps’ Assessment for Adaptation to Conflict and Climate Threats, for example, examines the dynamics between climate change and conflict, and identifies entry points and approaches to interrupt the cycle of fragility. In Mali and Niger, where we piloted this tool, program participants identified the rainy season – especially the beginning and the end – as the time when many of the land-based conflicts take place between farmers and herders. It is being used by the UK government to plan ways to resolve tensions and support women who are particularly vulnerable.
The creation of the Loss and Damage Fund was a significant victory for nations that have contributed the least to climate change yet bear the brunt of its impacts. The board of the Loss and Damage Fund now has a critical opportunity to ensure inclusion and equity by guaranteeing that all communities, especially those in fragile and conflict-affected states, have access to the necessary funding to address loss and damage. It is imperative that no one is left behind in this global effort to combat the climate crisis.
The post The Loss and Damage Fund must not leave fragile states behind appeared first on Climate Home News.
The Loss and Damage Fund must not leave fragile states behind
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With the U.S. bombing Iran and the Strait of Hormuz closed, energy experts say countries transitioning to renewables will be more resilient in the “face of the shock.”
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One month into the US and Israel’s war on Iran, at least 60 countries have taken emergency measures in response to the subsequent global energy crisis, according to analysis by Carbon Brief.
So far, these countries have announced nearly 200 policies to save fuel, support consumers and boost domestic energy supplies.
Carbon Brief has drawn on tracking by the International Energy Agency (IEA) and other sources to assess the global policy response, just as a temporary ceasefire is declared.
Since the start of the war in late February, both sides have bombed vital energy infrastructure across the region as Iran has blocked the Strait of Hormuz – a key waterway through which around a fifth of global oil and liquified natural gas (LNG) trade passes.
This has made it impossible to export the usual volumes of fossil fuels from the region and, as a result, sent prices soaring.
Around 30 nations, from Norway to Zambia, have cut fuel taxes to help people struggling with rising costs, making this by far the most common domestic policy response to the crisis.
Some countries have stressed the need to boost domestic renewable-energy construction, while others – including Japan, Italy and South Korea – have opted to lean more on coal, at least in the short term.
The most wide-ranging responses have been in Asia, where countries that rely heavily on fossil fuels from the Middle East have implemented driving bans, fuel rationing and school closures in order to reduce demand.
‘Largest disruption’
On 28 February, the US and Israel launched a surprise attack on Iran, triggering conflict across the Middle East and sending shockwaves around the world.
There have been numerous assaults on energy infrastructure, including an Iranian attack on the world’s largest LNG facility in Qatar and an Israeli bombing of Iran’s gas sites.
Iran’s blockade of the Strait of Hormuz, a chokepoint in the Persian Gulf, is causing what the IEA has called the “largest supply disruption in the history of the global oil market”.
A fifth of the world’s oil and LNG is normally shipped through this region, with 90% of those supplies going to destinations in Asia. Without these supplies, fuel prices have surged.
Governments around the world have taken emergency actions in response to this new energy crisis, shielding their citizens from price spikes, conserving energy where possible and considering longer-term energy policies.
Even with a two-week ceasefire announced, the energy crisis is expected to continue, given the extensive damage to infrastructure and continuing uncertainties.
Asian crunch
Carbon Brief has used tracking by the IEA, news reports, government announcements and internal monitoring by the thinktank E3G to assess the range of national responses to the energy crisis roughly one month into the Iran war.
In total, Carbon Brief has identified 185 relevant policies, announcements and campaigns from 60 national governments.
As the map below shows, these measures are concentrated in east and south Asia. These regions are facing the most extreme disruption, largely due to their reliance on oil and gas supplies from the Middle East.
Nations including Indonesia, Japan, South Korea and India are already spending billions of dollars on fuel subsidies to protect people from rising costs.
At least 16 Asian countries are also taking drastic measures to reduce fuel consumption. For example, the Philippines has declared a “state of national emergency”, which includes limiting air conditioning in public buildings and subsidising public transport.
Other examples from the region include the government in Bangladesh asking the public and businesses to avoid unnecessary lighting, Pakistan reducing the speed limit on highways and Laos encouraging people to work from home.
Europe – which was hit hard by the 2022 energy crisis due to its reliance on Russian gas – is less immediately exposed to the current crisis than Asia. However, many nations are still heavily reliant on gas, including supplies from Qatar.
The continent is already feeling the effects of higher global energy prices as countries compete for more limited resources.
At least 18 European nations have introduced measures to help people with rising costs. Spain, which is relatively insulated from the crisis due to the high share of renewables in its electricity supply, nevertheless announced a €5bn aid package, with at least six measures to support consumers.
Many African countries, while also less reliant on direct fossil-fuel supplies via the Strait of Hormuz than Asia, are still facing the strain of higher import bills. Some, including Ethiopia, Kenya and Zambia, are also facing severe fuel shortages.
There have been fewer new policies across the Americas, which have been comparatively insulated from the energy crisis so far. One outlier is Chile, which is among the region’s biggest fuel importers and is, therefore, more exposed to global price increases.
Tax cuts
The most common types of policy response to the energy crisis so far have been efforts to protect people and businesses from the surge in fuel prices.
At least 28 nations, including Italy, Brazil and Australia, have introduced a total of 31 measures to cut taxes – and, therefore, prices – on fuel.
Even across Africa, where state revenues are already stretched, some nations – including Namibia and South Africa – are cutting fuel levies in a bid to stabilise prices.
Another 17 countries, including Mexico and Poland, have directly capped the price of fuel. Others, such as France and the UK, have opted for more targeted fuel subsidies, designed to support specific vulnerable groups and industries.
These measures are all shown in the dark blue “consumer support” bars in the chart below.
Such measures can directly help consumers, but some leaders, NGOs and financial experts have noted that there is also the risk of them driving inflation and reinforcing reliance on the existing fossil fuel-based system.
Christine Lagarde, president of the European Central Bank, spoke in favour of short-term measures to “smooth the shock”, but noted that “broad-based and open-ended measures may add excessively to demand”.
Measures to conserve energy, of the type that many developing countries in Asia have implemented extensively, have been described by the IEA as “more effective and fiscally sustainable than broad-based subsidies”.
So far, there have been at least 23 such measures introduced to limit the use of transport, particularly private cars.
These include Lithuania cutting train fares, two Australian states making public transport free and Myanmar and South Korea asking people to only drive their cars on certain days.
Clean vs coal
At least eight countries have announced plans to either increase their use of coal or review existing plans to transition away from coal, according to Carbon Brief’s analysis. These include Japan, South Korea, Bangladesh, the Philippines, Thailand, Pakistan, Germany and Italy.
These measures broadly involve delaying coal-plant closure, as in Italy, or allowing older sites to operate at higher rates, as in Japan – rather than building more coal plants.
There has been extensive coverage of how the energy crisis is “driving Asia back to coal”. However, as Bloomberg columnist David Fickling has noted, this shift is relatively small and likely to be offset by a move to cheap solar power in the longer term.
Indeed, some countries have begun to consider changes to the way they use energy going forward, amid a crisis driven by the spiralling costs of fossil-fuel imports.
Leaders in India, Barbados and the UK have explicitly stressed the importance of a structural shift to using clean power. Governments in France and the Philippines are among those linking new renewable-energy announcements with the unfolding crisis.
New renewable-energy capacity will take time to come online, albeit substantially less time than developing new fossil-fuel generation. In the meantime, some nations are also taking short-term measures to make their road transport less reliant on fossil fuels.
For example, the Chilean government has enabled taxi drivers to access preferential credit for purchasing electric vehicles (EVs). Cambodia has cut import taxes on EVs and Laos has lowered excise taxes on them.
Finally, there have been some signs that countries are reconsidering their future exposure to imported fossil fuels, given the current economics of oil and gas.
The New Zealand government has indicated that a plan to build a new LNG terminal by 2027 now faces uncertainty. Reuters reported that Vietnamese conglomerate Vingroup has told the government it wanted to abandon a plan to build a new LNG-fired power plant in Vietnam, in favour of renewables.
The post Iran war analysis: How 60 nations have responded to the global energy crisis appeared first on Carbon Brief.
Iran war analysis: How 60 nations have responded to the global energy crisis
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