Fairness in Financing Climate Change

Fairness in Financing Climate Change

With quickly increasing costs associated with climate change events - who should be footing the bill?

November 21, 2022

4 min read; 680 words

Tags: Energy Policy

Author: Lillian Miller

Just a few months ago catastrophic flooding events swept through Pakistan, killing nearly 1,700, displacing over 30 million, and causing an estimated 40 billion dollars (USD) in damages. Over 120 were killed in a series of floods and mudslides in Brazil, while thousands died in Europe from extended drought and heat waves estimated to cost over 20 billion USD. The US estimates nearly 15 extreme weather events with losses exceeding $1 billion so far in 2022.

There is little debate over the fact that extreme weather events have been drastically increasing in frequency over the past decade, and that this change is a direct result of climate change. Clearly, the frequency of these extreme weather events comes with an ever increasing price tag, but the question of who should pay for them remains highly contentious.

While people can take on personal responsibility for climate emissions, driving less, eating less meat, and making sure to always turn off the lights, these changes, while essential to energy sustainability, comprise a small portion of global greenhouse gas emissions. Recent studies have found that a billionaire is responsible for emitting nearly a million times more greenhouse gas than a typical person, with the majority of this coming from their investments. Can we ask the majority of the population to take responsibility for the choices of the richest 1 percent?

Similarly, industrialized countries share much more of the blame for climate change, even when smaller developing nations are often more at risk to feel its effects. Countries like the United States, Canada, Japan and western Europe are responsible for over 50 percent of all historical greenhouse gas emissions, and are better equipped financially to weather the effects of climate change.

“Climate reparations” describes the idea that richer developed countries have had a huge role in the propagation of climate change and greenhouse gas emissions but feel disproportionately few of its impacts as compared to developing nations, who never have the opportunity to reap the economic “benefits” of rapid industrialization. As expected, the idea of paying reparations is widely unpopular in many developed countries and has led to intense political arguments.

These debates have become a focal point in the United Nations “Conference of the Parties” climate negotiations - popularly known as COP 27. Many leaders of non-industrialized countries are expressing frustration about being at the mercy of industrialized countries, who have continually failed to make good on climate goals and promises. Even amongst developed countries, there is strife over who should pay more and ultimately who is “more” responsible.For example, President Emmanual Macron of France blames the United States for not doing their part.

With little progress on agreements on climate reparations at a global level, many climate activists, particularly in industrialized countries, have started to use litigation as a means to make large corporations start to pay for their roles in climate change. One of the first major examples of this is New York City suing a collection of multinational fossil fuel companies, including Exxon Mobil, Shell, BP, and the American Petroleum Institute, for being misleading about the extreme dangers of fossil fuels and anthropogenic climate change. Other examples include lawsuits for damages caused by Hurricane Katrina (Comer v. Murphy Oil USA). More recently Honolulu government is suing oil companies for costs related to rapidly rising tides and flooding leading to displacement on the island. While there are few examples of these lawsuits being successful, it is a rapidly growing approach to attempt short term solutions for climate reparations.

Of course these discussions do not even begin to touch on the topics of how we account for the human cost of climate change - the lives lost and the trauma caused - nor do they account for the ecological damage to our planet - the species lost and the ecosystems permanently altered.

Who should take responsibility for damages caused by climate change is an inherently complicated and controversial issue in environmental ethics, but it is becoming increasingly important to address these issues as we move forward in a world adapting to the realities of climate change.

Lillian Miller is a sophomore studying Chemistry and Environmental Science at the University of Pennsylvania.