A V20-commissioned report launched on Wednesday alongside the UN climate talks in Bonn, Germany, shows how climate change has already eliminated one fifth of the wealth of these countries, or US$ 525 billion, over the last two decades.
The V20 Group of finance ministers from climate vulnerable economies including Bangladesh called for the immediate establishment of a separate and dedicated international funding for loss and damage crisis-level adaptation action.
The report, titled “Climate Vulnerable Economies Loss Report: Economic losses attributable to climate change in V20 economies over the last two decades (2000-2019)”, shows that for the top ten per cent of worst at-risk of the V20 countries, economic losses due to climate change for the past two decades are estimated to exceed half of all growth.
The analysis provides the first ever estimate of the economic losses attributable to anthropogenic climate change only.
Economic losses cut GDP growth in the V20 by one full per cent each year on average which averaged 3.67% in 2019 across the vulnerable economies, according to a message received from Bonn.
From 2000 to 2019, the report estimated economic losses due to hydro-meteorological extreme events are higher than the previous two decades and the world’s most vulnerable economies are also not adapting fast enough to cope with the changing climate as it currently stands.
Though the study analysed historical economic losses, it also highlighted that these losses will continue to increase given the earth’s warming is set to progress to within 1.5 degrees Celsius in the next decade regardless of further actions to reduce emissions.
It noted that losses due to climate change have been growing over time, underscoring that countries are not adapting fast enough.
Kenneth Nana Yaw Ofori-Atta, Ghana Finance Minister, said this should sound alarm bells for the world economy, since V20 are fast-growing engines of global economic growth, whereas the climate crisis has the potential to bring that phase to an end if the world fails to act.
“The failure on the $100 billion of international climate finance delivery, particularly the failure to ensure a 50:50 balance for adaptation, has left us highly exposed. Meeting and exceeding the COP26 agreed Delivery Plan to make-up shortcomings on the $100 billion and to double adaptation finance by 2025 are therefore absolutely crucial to our and the world’s economic well-being. But it is no longer enough,” he said.
Minister Ofori-Atta said as matter of pragmatism and justice, the V20 and Climate Vulnerable Forum is calling on COP27 to establish an international financing mechanism for climate change loss and damage in solidarity with victims least responsible for, and least equipped to withstand, the increasingly extreme physical shocks driven by climate change.
Dr Michiel Schaeffer, chief scientist at Finres, author of the study, explained at 1.1°C of warming, the majority of V20 countries have already reached their optimum temperature – any further warming beyond this will cause an acceleration in the loss and damage experiences by societies – this report is an also urgent call for more stringent mitigation action in line with keeping global mean temperature increase below 1.5°C.
Florent Baarsch, CEO of Finres, who led the study, said results are extremely novel they built on new peer-reviewed scientific methods and data that did not exist less than a year ago.
Prof. Dr. Patrick Verkooijen, CEO of the Global Center on Adaptation, which hosts the V20 secretariat, while countries work hard to find enough ambition to reduce emissions within Paris Agreement bounds, the climate emergency has become the lived reality that is devastating lives around the globe.
“Acceleration adaptation at speed and at scale is a solution we have at hand right now to reduce loss and damage. It is not only proven to work but it is also a smart investment that will continue to pay off.”
Dr Seth Ofaso, Ghana CVF Presidency Envoy to the UNFCCC said the $100 billion commitment under the Paris Agreement is for mitigation and adaptation.
“When this was first negotiated over a decade ago, recognition of loss and damage was not what it is today. It is untenable that the world’s rich and responsible nations continue to refuse the poor, vulnerable and least responsible nations support for the crushing costs that we bear because of inaction on the climate crisis.”
Ghana highlighted how the V20 and Climate Vulnerable Forum (CVF) are working unitedly for COP27 in Egypt later this year to deliver concrete results in terms of establishing international funding for loss and damage through a dedicated new instrument.
Dr Ofaso said what the V20 can do on its own is limited and only makes sense if the world’s rich, powerful and climate change responsible nations can be inspired by the V20’s breakthrough efforts and go beyond.
“It should fall on COP27 to decisively act on the void of finance for loss and damage in a clear litmus test for whether those fueling the climate crisis can truly begin to take responsibility for the breath of damage that has been unleashed by it.”
