Climate Finance: Tackling Loss and Damage

Patrick Grady Excerpts

Tuesday 5th September 2023 Westminster Hall

[Patrick Grady (Glasgow North) (SNP)]

It is a pleasure to serve under your chairmanship, Mr Betts. Although Members may not have used all the time available, all the contributions have been substantial and this has been a worthwhile debate, which I warmly congratulate my hon. Friend the Member for Dundee West (Chris Law) on securing. I recognise his commitment to, and passion for, climate justice over many years. I think he has the distinction of attending the most UN framework convention on climate change conferences of parties of any serving MP—if not, he is certainly close to the record—so he speaks with an experience and authority to which we all, especially the Minister, ought to listen.

We have just returned from a summer recess during which the UN Secretary-General said:

“The era of global warming has ended; the era of global boiling has arrived”.

Only a very small minority of people anywhere in the world would now be prepared to argue that the extreme weather being experienced across the globe is not evidence of the impact that human-driven carbon dioxide emissions since the industrial revolution have had on the planet’s climate. Sadly, some of that minority still inhabit the Conservative Back Benches—although none of them has been brave enough to come to this debate to articulate that—and that has regrettable consequences for Government policy.

As every Member who has spoken in this debate has said, the reality is that climate change poses an existential threat—not necessarily to all human life, but certainly to the lifestyles to which we in the west have become accustomed and to which we encourage others elsewhere in the world to aspire. In 2015, when my hon. Friends and I were first elected, we would come to Westminster Hall debates and say that climate change threatened to undo the progress that had been made towards meeting the millennium development goals and driving down global poverty. Eight years later, we can say with certainty that climate change is undoing that progress and is in fact driving up hunger, poverty and disease in many parts of the world. That is why addressing the issue of loss and damage is so important.

The concept of loss and damage and the need for additional finances to repair loss and damage caused by climate change is not new; it dates at least to the early 1990s when the Alliance of Small Island States first brought it to the table of the existing UN framework. The hon. Member for Brentford and Isleworth (Ruth Cadbury) spoke powerfully about the threat that small island states face. They are among the first to experience the impact of climate change and face the prospect of their islands being literally wiped off the face of the earth by rising sea levels or becoming uninhabitable as marine ecosystems break down. My hon. Friend the Member for Dundee West asked the Minister to imagine if this country was threatened with being swamped—it is! Not far away, there is a tidal barrier that increasingly cannot cope with the tidal surges and rising sea levels, so this country is going to be affected. Low-lying areas of this island will be affected by climate change.

We all need to act, and that is what loss and damage is about. It recognises that some of the impacts of climate change will be literally beyond repair and certainly beyond prevention and mitigation. That in turn means that support for people and places affected by loss and damage also has to go beyond existing support. If climate change is undoing progress towards the sustainable development goals and poverty reduction, by definition the support to make up for it will have to be additional to what has already been pledged or assessed as required.

In 2022, the Vulnerable Twenty, or V20, which is a group of the Finance Ministers of countries vulnerable to climate change, estimated that

“Climate change has eliminated one fifth of the wealth of the V20 over the last two decades: initial evidence shows that the V20 would have been 20% wealthier today had it not been for climate change and the losses it incurred for poor and vulnerable economies.”

Therefore, there is an important economic argument. Free marketeers and capitalists who see trickle-down economics as the rising tide—ironically—that floats all boats should be paying attention to this. It reminds me of Lord Stern’s description of climate change in 2006—17 years ago—as

“the greatest and widest-ranging market failure ever seen.”

So let the free marketeers come up with their solutions if they want to—some of that has been addressed, and we will come back to it. It is crucial to understand that this issue must not be ignored. A price has to be paid to deal with the impact of climate change. The question is, who will pay it and how?

The hon. Member for Liverpool, Walton (Dan Carden) made important points about the role of future generations and our responsibility towards them. He was right to say that those who have done the most to cause climate change, and who have benefited from the extraction of the earth’s resources and the pumping of pollution into the atmosphere, now have a moral responsibility to support those who are most affected by climate change. That is the concept of climate justice, which has been adopted by the Scottish Government, and many other Governments and climate campaigners around the world, but the UK Government conspicuously avoid even acknowledging it, let alone accepting or committing to it. We will wait, I suspect again in vain, to hear the Minister say that the UK Government accept that climate justice is an important concept that exists and ought to be lived up to.

The important symbolism around the concept of reparations and reparative justice should not be allowed to get in the way of the urgent need to mobilise new additional funding to support countries and communities experiencing loss and damage from climate change. One key point that everyone has made today is that that funding has to be additional, which is also why we have to consider new and innovative ways of leveraging funding. Private sector companies, particularly those that make vast fortunes from the extraction and consumption of fossil fuels, clearly have to be a source, either through direct contributions to global funds or through taxation or levies at a country or international level. That is the “polluter pays” principle, which was raised by the hon. Member for Brighton, Pavilion (Caroline Lucas) and others who have spoken. There have been long-standing calls for a financial transaction tax, or Robin Hood tax, which could raise additional capital for fighting climate change.

It is particularly important that funding is disbursed in the form of grants and not loans; the right hon. Member for Dwyfor Meirionnydd (Liz Saville Roberts) made that point. There might be other ways, including insurance-based models—there is a lot of innovative thinking in this area—but we must not drive developing countries even further into debt.

[Deidre Brock]

Indeed. Those most likely to be affected by the adverse impact of climate change are already burdened by debt, which cripples their economies. My hon. Friend agrees that loss and damage funding should be additional and in the form of grants, not loans, but does he support the proposal that finance should be mobilised through the cancellation of existing debt? The SNP has spoken about that for a long time.

--- Later in debate ---

[Patrick Grady]

Yes, that is a hugely important concept. We think of all the work done around the Jubilee 2000 campaign, 23 years ago, and the huge global effort and consensus about the need to take action because developing countries were being crippled by the debt they had incurred. That is not good for anyone; it is not good for us either. Progress was made, but again we seem to be going backwards on a lot of that, and the changing climate seems to be a driver. That has to factor into the discussions. The work begun at the most recent COPs, including COP26 in Glasgow and the commitments made last year in Sharm el-Sheikh, must be followed through, and a new governing instrument must be agreed at COP28 this year. The hon. Member for Rotherham (Sarah Champion), the Chair of the International Development Committee, made important points about the Santiago Network and some of the other mechanisms that exist.

What is needed above all is political will: decision makers who are prepared to take bold and innovative action. As my hon. Friend the Member for Dundee West said, that is exactly what the Scottish Government have done: first, way back in 2012, when they established their climate justice fund in addition to the international development fund; then at COP26, when Nicola Sturgeon pledged £2 million for loss and damage, making the Scottish Government the first western Government to do so; and now just recently when they committed a further £24 million over the next three years to respond to climate change in Rwanda, Malawi and Zambia. Malawi’s President, His Excellency Dr Lazarus Chakwera, said in February that the Scottish Government’s loss and damage fund for projects in his country

“has made huge differences in the people and their livelihoods because they are given a hand up, so the resilience we talk about becomes a practical issue.”

He went on:

“This fight belongs to all of us and I believe that this example will serve as a prototype of what could happen.”

Perhaps now the UK Government will start to play their part. Perhaps they will begin to see, as my hon. Friend the Member for Edinburgh North and Leith (Deidre Brock) said in an earlier contribution, that the savage cuts to the aid budget are a false economy. All the evidence that we have heard in this debate shows that more funding is needed, but this Government are determined to spend less. In the end, it will cost more. The hon. Member for Manchester, Gorton (Afzal Khan) and others spoke about population movements. Home Office Ministers themselves stand at the Dispatch Box and say that hundreds of millions of people are on the move and that they all want to come to the United Kingdom, but instead of—

[Sarah Champion]

I apologise for interrupting the hon. Member in full flow. He is making a strong speech and is absolutely right to make this point, because the ODA spend is designed to help people stay safe and prosperous in their own homes, which is what they want. The Minister is taking away the money that would enable people to stay at home and then spending it secondarily when they turn up on our shores.

[Patrick Grady]

Yes, the hon. Lady is exactly right. Rather than housing people in barges or hotels, or chasing them back into the sea, it would be considerably cheaper if we helped to build resilience in their countries of origin against climate change that we have caused and that our lifestyles are continuing to make worse. That would save money in the long run.

I do have to say that there is also a challenge here for the Labour party. It would be useful to hear the shadow Minister, the hon. Member for Leeds North East (Fabian Hamilton), commit to the principle of climate justice and a return to the 0.7% target, because voters, particularly in Scotland, will be listening carefully.

The Scottish Government’s actions have already shown that it is possible to make decisions and show leadership in this area and to encourage others to follow suit. In an independent Scotland, 0.7% would be the floor, not the ceiling, for our spending responsibilities to the poorest and most vulnerable people around the world. It would be the morally right thing to do, as others have said, but it is also in our enlightened self-interest.

Normally I would make a point about the spending being preventive, but the whole point of loss and damage is that it is now almost impossible to prevent some of the effects of climate change that we are already experiencing. Even as we speak, it is unseasonably warm; it is the start of September and we are once again experiencing record temperatures outside. But we can prevent loss of life and livelihoods with the right kind of investment and support for those who need it most. If we do not, it will cost more in the long term and we will all pay the price.