Report unveils USD21 Trillion climate losses

Residents of Northern Kenya have learned the hard way to adapt to new ways of living and changing climate conditions in order to survive. The residents heavily rely on camels for their daily chores. [Elvis Ogina, Standard]

Developing countries in tropical regions are losing ten per cent or more annually of their national income due to climate change.

When Gross Domestic Product (GDP) and capital losses are combined, a new analysis has found that low and middle-income countries have experienced a total loss of USD 21 trillion since the Rio Convention was adopted in 1992.

The University of Delaware released a new report on the impacts of climate change on output and capital ahead of Cop 28.

As agreed at COP27, countries are expected to adopt a framework for the new UN fund to assist nations in recovering from “loss and damage” caused by climate change.

As the report comes, final talks earlier this month to agree on a proposal for a new climate disaster fund have avoided a deadlock ahead of a climate summit, but tough new questions still remain about who will pay and when.

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The fifth meeting of a 24-member UN committee tasked with designing the fund concluded in Abu Dhabi early this month with support for a “take-it-or-leave-it” deal that would make the World Bank the interim home of the fund and encourage - but not oblige - all countries to contribute to it.

Experts have raised concerns with Beatrice Karanja, a Board Member at Tusk, raised questions about the effectiveness of current approaches to loss and damage:

“What does their success look like? After COP number what, we’re still discussing minute hairline details while knowing that things are crashing around us? Could there be another way of reframing Loss and Damage?”

A loss and damage fund would be the first United Nations mechanism dedicated to helping countries that have suffered irreparable climate-driven damage from drought, floods and rising sea levels. It would aim to divert billions of dollars towards nations that are “particularly vulnerable.”

After months of contentious talks, negotiators produced recommendations for the fund that will be put to nearly 200 governments for approval at the annual UN climate summit.

However, the report indicates that globally, climate change has led to a population-weighted 1 GDP loss of 6.3 per cent in 2022.

“The unweighted percentage of global GDP lost is estimated at 1.8 per cent, or about USD1.5 trillion and the difference between those two numbers reflects the uneven distribution of impacts, which concentrate in low-income countries and tropical regions that typically have more population and less GDP,” read the report in part.

Indeed, least developed countries are exposed to an average population-weighted GDP loss of 8.3 per cent, and Southeast Asia and Southern Africa are particularly affected, with countries losing an average of 14.1 per cent and 11.2 per cent of their GDP, respectively.

“The world is trillions of dollars poorer because of climate change, and most of that burden has fallen on poor countries. I hope that this information can clarify the challenges that many countries already face today and the support they urgently need to address them,” says Dr James Rising, author of the study.

“Our analysis draws on 58 economic models and employs machine learning to produce aof the current GDP and capital wealth losses from climate change”, says the author.

John Kamanga, Co-founder and Director at Director, Southern Rift Association of Land Owners stressed the need for concrete commitments:

“COP28 is about commitments. What commitments are going to be made and, most importantly, enforcement? A lot of the time people make these commitments, but they remain at a statement level. There must be commitments in certain ways and proper frameworks developed.”

Atwaa Salim, Director at Lamu Marine Conservation Trust (Lamcot), highlighted the responsibility of developed nations:

“It is their responsibility to help mitigate the effects of climate change on the poorest countries as mentioned in the Nairobi declaration. The funds can come from the public or private sector. African leaders want a bar of USD100 billion as declared in 2009.”

Peter Munene, Assistant Manager and Conservation Education Programmes Co-ordinator at Mountain Bongo Surveillance Project, stressed the potential impact of financial reparations:

“The reparation agreement will be an investment in the community, and if it is implemented fully, it will be a very cost-effective mechanism to lower the total impact of climatic-related disasters.”

According to the report Low and middle-income countries have experienced USD2.1 trillion in produced capital losses due to climate change.