Fair Sources of Finance for a New Loss and Damage Funding Arrangement

“Fair Sources of Finance for a New Loss and Damage Funding Arrangement” [PDF] published by QUNO.

People who are most affected by and vulnerable to further L&D have contributed the least to the climate crisis. Therefore, is it morally right that those who are most responsible for the climate crisis should finance the new funding arrangement for L&D. Taking up the need to address L&D in an ethical manner, the Human Impacts of Climate Change programme published this month a new briefing paper on “Fair Sources of Finance for a New Loss and Damage Funding Arrangement.” The options offered in the paper are meant to present policy makers with feasible and fair sources of finance for funding the new L&D arrangement without taking money away from needed action into climate change mitigation and adaptation. Grounded in principles like polluter pays, historic responsibility, and needs based, the options center redressing fossil fuel harm, exploring existing financial instruments, and supporting a more just and equitable world. 

One of the fair sources discussed in this document is military spending.

Shifting Military Budgets to Support Loss and Damage Needs

“Moderate reductions in military spending … could free up considerable resources for the SDG agenda, both in the countries that reduce spending and in the form of ODA [overseas direct assistance].”
(IPCC WGIII Full Report)

Finance for L&D could be raised through shifting spending away from weapons that kill, and into transformative climate action, and financial support to stabilize and rebuild communities devastated by climate change. In 2021, world military expenditure surpassed 2 USD trillion for the first time while all global public climate finance (of which only 17.9 USD billion was grants) was an estimated 83.3 billion USD in 2020. States can reduce their over-all military spending and shift funds to help build real security and citizen safety through funding mitigation, adaptation, and L&D. For example, the 5% formula proposed by Tipping Point North South models how military budgets can be sustainably reduced and redirect an estimated 700 billion USD in funding to urgent human and environmental needs. As highlighted by UN Secretary-General, António Guterres, to the UN Security Council, climate change is a “crisis multiplier,” and its greatest impacts are where “fragility and conflict have weakened coping mechanisms.” With high confidence, IPCC findings show that regions and people experience higher levels of vulnerability to climatic hazards when violent conflict is present. Beyond increasing risks to climatic hazards, globally, military activities are estimated to account for up to 6% of total GHG emissions. Shifting military funds to L&D is critical for sustaining peace, redressing the environmental harm of conflicts, reducing GHG emissions, and funding urgent, transformative action that meets human and environmental needs while avoiding catastrophic temperature rise.