As the negotiations on direct funding for ‘loss and damage’ continues, the much-awaited ‘Global Shield Against Climate Risks’ initiative was formally launched at the Vulnerable 20 (V20) pavilion at COP27, on Monday. It is a collaboration between the V20 group of finance ministers representing 58 climate-vulnerable countries and the G7.
The initiative has been launched with an initial funding of more than $200 million and aims to provide “pre-arranged financial support designed to be quickly deployed in times of climate disasters”. It is envisioned as a social protection and insurance-based finance mechanism for loss and damage outside the UNFCCC process.
Though critics have argued it as a distraction from the real loss and damage funds, many believe this comes across as a recognition by the global community’s acceptance towards financial aid for climate disasters for vulnerable nations. Global South countries have contributed little to global emissions yet face the worst consequences of a warming world. At the same time, they don’t have the resources to protect citizens. The first group of countries that will benefit from the scheme includes Bangladesh, Costa Rica, Fiji, Ghana, Pakistan, the Philippines and Senegal.
According to reports, Svenja Schulze, Germany’s minister of economic cooperation and development, stressed that the scheme was not “a tactic” to sidestep calls for a specific loss and damage funding mechanism. Besides $170 million from Germany, funding includes $20 million from France, $10 million from Ireland, $7 million from Canada and $4.7 million from Denmark.