Time to make polluters pay for climate change

A coal-fired power plant on the banks of the Ohio River in Aberdeen, Ohio, US, September 13, 2017. PHOTO: Brian Snyder/REUTERS

At the 19th Conference of Parties (COP19) of the United Nations Framework Convention on Climate Change (UNFCCC) held in Warsaw, Poland in 2013, there was a breakthrough agreement to set up the Warsaw International Mechanism (WIM) on Loss and Damage with its Executive Committee having equal representation from developed and developing countries.

Bangladesh was also made a member of the Executive Committee of the WIM.

The WIM developed their five-year workplan that included nine areas of work, one of which was on finding innovative sources of funding for loss and damage from human induced climate change.

However, while there has been some good progress on all other elements of the WIM workplan, there has been hardly any progress on finance, except for insurance.

At COP23 in Bonn last year, under the leadership of Fiji, the vulnerable countries argued for addressing the issue of finance for loss and damage and they were able to get an agreement to finally discuss the issue as part of the “Suva Dialogue” which will take place in Bonn in May this year.
The Least Developed Countries (LDC) group, along with other vulnerable countries will be making a big push to finally put this issue firmly on the agenda.

There are several issues that need to be discussed. The first issue is that in 2017 the world saw a significant increase in climate impacts from floods in South Asia to droughts in Africa to wild fires in California and hurricanes in the Caribbean, to enable the scientific community to unequivocally certify that human induced climate change impacts are now happening and it is no longer a problem of only the future.

The second corollary to that fact is that despite efforts to reduce emissions of greenhouse gases and to adapt to potential climate impacts, the impacts are now happening and the victims need to be compensated.

Finally, with regards to finding innovative sources of funding we need to go well beyond looking at insurance alone as there are severe limitations to relying on it, most notably, that it cannot cover the poorest and most vulnerable who cannot afford to pay the premium for getting insured.

Thus the time has come for the vulnerable developing countries to push for making the polluters pay compensation to the victims of their pollution.

One proposal from civil society that should now be supported by governments is to impose a pollution tax or levy on the dozen or so major fossil fuel companies who are making tens of billions of dollars in profits from selling their polluting products.

Such a tax or levy could be agreed at the UNFCCC and then imposed by each country in which each major company is domiciled. The advantage of applying the polluter-pays principal in this way is that the government of the country does not have to pay but rather simply collect the tax from the company and deposit the funds into a loss and damage fund under the UNFCCC.

The amount of tax could be just a few percent of the profits (only) of these polluting companies which should raise approximately 50 billion dollars a year.

The time has now come to apply the polluter-pays principal in practice and no longer give polluters a free ride. The vulnerable countries now need to push their case and get everyone else to agree.

Originally this article was published on May 03, 2018 at Daily Star. The author Dr. Saleemul Huq is the director of the International Centre for Climate Change and Development (ICCCAD) at the Independent University, Bangladesh (IUB).
Email: saleemul.huq@icccad.net