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Home » What is Global Shield, new G7-funded climate compensation fund?

What is Global Shield, new G7-funded climate compensation fund?

What is Global Shield, new G7-funded climate compensation fund?

A G7-led plan, dubbed the “Global Shield”, to provide financing to countries hit by climate catastrophes was unveiled at the UN COP27 summit on Monday, though some questioned the effectiveness. of the planned plan.

Coordinated by the presidency of the Group of Seven – Germany – and the V20 group of climate-vulnerable countries, its aim is to quickly provide pre-arranged insurance and financing for catastrophe protection after events such as floods, droughts and hurricanes occur.

With the support of 170 million euros (175.17 million dollars) from Germany and 40 million euros from other donors, such as Denmark and Ireland, the “Global Shield” will develop aid in the coming months that will be deployed in countries such as Pakistan, Ghana, Fiji and Senegal when the events occur.

However, some countries and activists were cautious, concerned that it would risk undermining efforts to secure a substantial deal on financial aid for so-called “loss and damage,” UN jargon for irreparable damage caused by global warming. 

German Development Minister Svenja Schulze said the “Global Shield” was intended to complement, not replace, advances in loss and damage.

What is the Global Shield?

Global Shield, coordinated by G7 President Germany, aims to provide climate-vulnerable countries with quick access to disaster protection insurance and financing after floods or droughts. It is being developed in collaboration with 58 climate-vulnerable economies to pool finance and climate risk preparedness.

This scheme will provide financing to vulnerable countries only to warn, minimize and deal with the damage caused by climate change in fragile economies. The initiative, to which Berlin will allocate 170 million euros, does not include financing for adaptation or green preparation.

The fund will help nations prepare for climate change and respond to natural disasters caused by rising temperatures.

“Weather-related disasters have devastating impacts on poor people in particular,” said Svenja Schulze, Germany’s Minister for Economic Cooperation and Development.

“They often do not have the means to protect themselves and their homes, fields or businesses from extreme weather and may lose all their possessions when disaster strikes.”

Shield

Germany promised to initially allocate 170 million dollars to this initiative, which they have called Global Shield against climate risks, although the country’s Minister for Cooperation and Development, Svenja Schulze, clarified that this contribution is only “the seed, because ” more money will be needed” to cover the needs.

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Schulze also assured that the Global Shield is not “a type of tactic to avoid formal negotiation on loss and damage” in the framework of COP27, but “only the beginning” of something that he hopes will exert pressure on other nations to advance in the discussion on how to design a loss and damage mechanism, a dialogue that could extend until 2024.

The V20 countries represent 10% of sovereign states, close to 20% of the world population (with 1.5 billion people) and yet only constitute 3% of global GDP, recalled Ghana’s finance minister, Ken Ofori-Atta, who pointed out that in the last two decades the climate crisis has caused these nations to lose some 525,000 million dollars.

“The situation will get worse”, advanced the African minister, in view of the increase in gas emissions and greenhouse effect forecast for 2030, even if the mitigation agreements on the table are met.

Evolution

The key to unlocking the agreement is in the richest countries, especially the United States and China. Beijing already stated the week before that, despite being a large carbon emitter, it does not consider that it should contribute money to the proposed reparations fund. On the other hand, the US president, Joe Biden, announced that he will quadruple Washington’s aid with 11,000 million dollars a year, although he will only allocate a third to adaptation.

The only point already agreed upon is the reform of the World Bank, the main source of financing for climate action. Although far from the request for a new Bretton Woods, the president of the entity, David Malpass, acknowledged the preparation of a new road map so that the organization can respond to the “main challenge of development.

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