Climate reparations refer to a call for money to be paid by the Global North to the Global South as a means of addressing historical contributions that the developed countries have made and continue to make towards climate change. For instance, since 1750, the US and EU account for 47 percent of all emissions in the world. Further, after COP26, campaigns across the globe “for climate reparation and justice” took momentum.
The need for climate reparations:

• Polluters pay principle: Demand for compensation for loss and damage from climate disasters is an extension of the universally acknowledged “polluter pays principle” that makes the polluter liable for paying not just for the cost of remedial action but also for compensating the victims of environmental damage caused by their actions.
• Demand by the island nations: Small island states have for years insisted on setting up an international mechanism for financial compensation for loss and damage caused by climate disasters.
• Increasing climate change induced disasters in developing countries: Deadly floods engulfing large parts of Pakistan, wildfires ravaging North Africa, record-breaking heatwaves in India, etc. have led to huge economic burden on these countries.
• Increasing vulnerability of people to climate change: The IPCC in its recent report, highlighted that roughly 3.5 billion people, or 45% of the world’s population, currently live in areas of “high vulnerability” to climate change. While the impact of climate change is global, it is much more severe on the poorer nations because of their geographical locations and weaker coping capacity.
• Poor implementation of funding: While the $100 billion promise made at COP15 is yet to be fulfilled, the amount is not meant for loss and damage. The Warsaw International Mechanism (WIM) for Loss and Damages, 2013 acknowledged compensating developing countries for loss and damage caused by climate change, but this has yet to materialize.

Challenges in the implementation of climate reparations:

• Reluctance of developed countries: The demand for loss and damage compensation has been heavily resisted at COP. At COP26, the establishment of a new funding pot was rejected, and almost all references were removed from the final agreement, the Glasgow Climate Pact. Further, developed countries are struggling to put together even the $100 billion per year that they agreed to provide in this regard.
• Increasing loss and damage costs: The UN Office for the Coordination of Humanitarian Efforts (UNOCHA) discovered that annual funding requests for climate-related disasters averaged $15.5 billion between 2019 and 2021. However, the developed countries are not sharing the burden equitably.
• Difficulty in estimating the quantum of loss: Although progress in science like satellite imaging enables scientists to say with a fair degree of certainty about the role of climate change, it is still far from exact. Another issue is estimating the share of the event itself. For example, urban flooding can be also due to lack of effective planning.
• Difficulty in calculating non-economic loss: Non-economic losses, such as loss of life, displacement and migration, health effects, and cultural heritage damage, are difficult to assess under climate repartitions.
• Unavoidable economic loss: The UNOCHA report finds that unavoidable economic losses from climate change were projected to reach between $290 billion to $580 billion by the year 2030.

Denmark is the only rich country that has stepped up with the funding for the problems of “loss and damage due to climate-related disasters. Increasing the transfer of finance from the Global North to the Global South is an important component of limiting devastation and progressing toward climate justice.