A new plan emerged during the 27th Conference of Parties (COP27) regarding the climate finance. Dubbed as 'Global Shield', it was initally proposed by the Group of 7 countries (G7) and it's purpose is to provide funding to countries that have been severely affected by climate disasters.
The plan was launched on Monday, 14 November, and has been received with mixed reactions from parties present at the UN summit and climate activists and scientists globally.
While many are seeing it as a step in the right direction, several parties feel that it is a distraction from the main issue — climate finance, especially vis-à-vis Loss and Damage.
Germany Puts €170 Million Towards Climate Finance
The Global Shield is an insurance initiative coordinated by the G7 president — Germany and the Vulnerable 20 group (V20).
The goal of this initiative is to reinforce social protection schemes and climate risk insurance for low-income and vulnerable countries that are worst affected by climate change.
Germany has dedicated €170 million to the insurance fund, with further €40 million provided by other donors, including Ireland, Canada, and Denmark.
In the coming months, the Global Shield is expected to deploy financial support to countries like Pakistan, Ghana, Bangaldesh, countries that have most recently faced devastating damages due to climate change.
Loophole in Climate Funding?
When the initiative was announced, some applauded the G7's efforts, and the Global Shield was considered a step in the right direction for addressing climate finance — a priority agenda during this year's COP.
However, this was also met with skepticism from climate experts and developing countries. Many have hesitated in accepting the Global Shield as a placeholder for a climate finance scheme while negotiations for a proper mechanism are still underway.
Some campaigners are concerned that the insurance initiative would hamper efforts made towards securing substantive funding for climate-vulnerable and developing countries, most of whom have minimal contributions in causing climate change in the first place.
“It cannot take away attention from the primary demand of developing countries for establishing a finance facility for Loss and Damage at COP27.”Harjeet Singh, Head of Global Political Strategy, Climate Action Network International
A larger concern regarding the scheme is the focus on insurance, which has a downside of premiums — another cost for low-income countries.
Ghana's finance minister said in a statement that a scheme like the Global shield was 'long overdue'.
While, developing countries are still set on holding developed countries accountable for their 'fair share' in climate finance, the fight for the $100 billion promise will still be a priority.
"The Global Shield cannot be hyped up as a solution to address the increasing scale of floods, storms and droughts, fuelled by climate change. Disproportionate focus on a new mechanism that does not cover slow onset events such as rising sea levels or loss of language and culture cannot meet the needs of communities on the ground."Harjeet Singh, Head of Global Political Strategy, Climate Action Network International
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