Equitable climate financing - how can that work?

Climate change particularly affects developing countries, which are hardly able to cope with the negative consequences on their own. Support is available from climate funds. The big question is, how can the money be distributed fairly?

It’s no longer just about stopping climate change by drastically reducing greenhouse gas emissions, but also about adapting to inevitable changes. If the sea level rises, coastal zones must be protected. In regions where climate change causes long dry spells and droughts, sustainable water management is the top priority. All this costs money. Money that is often lacking in the most severely affected developing countries and emerging economies. Countries that have done little to cause climate change, but suffer from the wide-ranging consequences, will be able to get funding from multilateral climate funds.

"It is undisputed that poor people in the global south, who are threatened by climate change, have the right to support with adapting to the changes in climate. It is also clear that this support should largely come from the wealthy countries with high per capita greenhouse gas emissions," said Christian Baatz, who was recently appointed as Assistant Professor of Climate Ethics, Sustainability and Global Equity, and leads a new working group at the Faculty of Arts and Humanities. “But the money from the international community for these climate funds is only a part of what is actually needed. And thus, the question arises of how the limited funds can be distributed fairly." Baatz has been researching this subject at the Institute of Philosophy since 2017, and strengthens the priority research area Kiel Marine Science at Kiel University.

Currently, the Federal Ministry of Education and Research (BMBF) is funding an interdisciplinary and transdisciplinary project under his leadership. On the one hand, the project describes the current status of the distribution of funds for adaptation, and on the other hand, it considers what the distribution could look like if based on fair principles. The aim is to formulate recommendations for political decision-makers. These should not only set out various criteria, but also the nature of the awarding procedures. Baatz said "The current situation is that those who have the capacity to submit applications are the ones that receive funds. This does not necessarily lead to the money going where the greatest damages are to be expected."

A central criterion which plays a major role in climate negotiations is vulnerability. "Support should be provided especially to the people who are particularly vulnerable to climate change. This is obvious. But if we go into more detail, it becomes difficult," emphasised Baatz. For example, the measurement of this vulnerability is problematic. "If we develop a ranking of the most vulnerable countries, then all the data, which is very heterogeneous, must be combined into a single factor. Depending on how the individual data is weighted, other countries or regions may be classified as being particularly vulnerable." Another criterion for the allocation of funds could be the degree of democracy. Baatz said "The Federal Government implicitly gives more money where democracies function better. Therefore, we also want to investigate if there are good reasons for doing so, and how reliably democracy can be measured."

The practical part of the project, a case study in the Seychelles, is led by Professor Nassos Vafeidis. The head of the Coastal Risks and Sea-Level Rise working group at the CAU has developed numerical models with which the effects of climate change on coastal areas can be estimated under different climatic and socio-economic scenarios. "We are not only investigating what could happen if humanity does nothing, but are also analysing various adaptation options," explained Vafeidis. "In doing so, we especially consider the manner in which a rise in sea levels exacerbates the effects of disasters such as floods, storm surges and erosion along the coasts, and thus increases the vulnerability."

Adaptation options include, for example, the construction of dams and dykes, the establishment of flood zones where building is not permitted, hydraulic sand filling of beaches or the relocation of towns and villages. According to Vafeidis: "With the help of the model, we can calculate how many people would be affected annually, how much money would have to be invested in the adaptation, and which damage would be caused for different adaptation options." In order to further refine the analysis, areas that are of particular importance should be examined more closely. "We use very detailed data here in order to find out what certain measures would actually achieve," said Vafeidis. Ultimately, the case study should also provide clarity on whether the vulnerability to sea-level rise can be an appropriate criterion for the regional distribution of funds for adaptation.

The Kiel researchers are cooperating with partners in the Seychelles and with various European institutions on this case study.

Author: Kerstin Nees