climate change

Denmark leads the world in offering climate change loss and damage compensation to poorer nations 

Flemming Moller Mortensen, Danish Minister for Development. Photo credit: Ida Marie Odgaard / Ritzau Scanpix/via Reuters.

By Anders Lorenzen 

Last week, the Danish government pledged at least $13 million to developing nations which have experienced losses caused by the impact of climate change, becoming the first country globally to offer ‘loss and damage’.

The Sahel to benefit

The Danish Development Minister Flemming Møller Mortensen announced that the Sahel region in northwestern Africa has been earmarked as the main area where these new climate funds will be used. He did add that some money will also be used in other fragile regions.

The minister said: “I am very happy that we have agreed to increase support for climate-related losses and damages. It is grossly unfair that the worlds poorest should suffer the most from the consequences of climate change, to which they have contributed the least.”

The loss and damage mechanism was first adopted in Warsaw in 2013 during COP19, however since then developing and developed economies have been arguing over how much should be paid and how the scheme should work. The issue will be picked up again this year in November when negotiators and world leaders gather in Egypt for COP27. 

Some of the world’s most fragile and climate-vulnerable countries will be pushing for rich economies to compensate for a problem they did far more to cause than developing economies.

But progress on this issue has been held back by the US and the EU and other rich economies that oppose a separate fund that would address loss and damage only. UN Secretary-General Antonio Guterres does not agree however and has urged rich countries to tax the windfall profits of fossil fuel companies and use that money to pay for loss and damage.

Denmark’s loss and damage contribution became a reality after its 2022 Finance Act cleared the last hurdle and the country has pledged to dedicate at least 60% of its climate aid to help countries adapt to climate change.

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