Climate Change Adaptation and Compensation - English

Plan B

By Steven Vanderheiden10.12.2013Economics, Global Policy, Science

While the “pay now or pay more later” logic may not appeal to the “climate justice” sentiments voiced at the last climate summit, it could help to motivate the actions needed to satisfy its goals.

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Tim Keegan

In the wake of Typhoon Haiyan’s devastating impact upon the Philippines just prior to the 19th Conference of the Parties (COP19) meeting in Warsaw last month, North-South conflicts over global climate change policy focused upon provision of “loss and damage” compensation for climate victims. The final hour agreement to construct a “Warsaw Mechanism” pillar for compensation, to go along with existing programs for mitigation and adaptation, marked perhaps the meeting’s most visible recognition of the demands of “climate justice” for those affected most by climate change, but it also invited criticism for potentially offending those demands.

Between adaptation and compensation

Controversially, the compensatory loss and damage mechanism was classified as an adaptation program, sparking objections that such funding must go “beyond adaptation” to include costs associated with property damage, losses of territory and livelihood, and various forms of individual and collective insecurity that result from climate change. Treating it as adaptation, critics charge, conflates two very different kinds of response to climate-related threats, increases competition for already-scarce funds, and compromises adaptation objectives by admitting that they will not be met. Others worry that the increased focus upon adaptation and compensation will detract from the primary objective of climate change mitigation—which foci upon adaptation programs were previously viewed as compromising—as no progress was made at COP19 in developing binding post-Kyoto national emissions targets.

Adaptation and compensation efforts do indeed involve quite different activities, which are likely to be carried out by different groups in different places and with different beneficiaries, and carry distinct objectives. While adaptation seeks to insulate humans from the expected harmful impacts of climate change, compensation seeks to rectify that harm to the extent possible once it is suffered. In this sense, adaptation can be viewed as an imperfect response to failures in mitigation, as it becomes increasingly necessary with increasing climate change, and compensation as an imperfect response to failures in adaptation, as humans fail to develop the resilience needed to avoid loss and damage.

In principle, successful adaptation causes no harm or injustice, and so rests upon the ethical imperative against harming. Compensation, by contrast, involves avoidable harm, as victims are compensated for having been made to unwittingly suffer. One might invoke efficiency in deciding between mitigation and adaptation, devoting some resources meant for the former toward the latter if this could be shown to reduce net suffering, but no such substitution is available between adaptation and compensation. Ethically, it is always better to prevent harm than to compensate victims for their suffering. Recognizing compensation as categorically distinct from adaptation would help to reinforce the imperatives of each.

Lumping adaptation and compensation together under the same policy pillar also threatens to exacerbate competition for scarce international financing to carry out either kind of program. With the nascent Green Climate Fund already under-sourced and overdrawn, and with ongoing debates about how much of its resources should be devoted toward mitigation relative to adaptation, adding a new set of claims to compensation can only worsen scarcity problems and intensify disagreements over the necessary amounts and proper uses of such funds.

To the extent that compensatory programs drain resources that are necessary for adaptation, or threaten the main international climate change finance mechanism with new controversy, critics are right to be concerned about how providing compensation for some might cause many more to suffer additional loss and damage. Keeping the financing distinct, and ensuring that compensation under the Warsaw mechanism comes in addition to and not instead of adaptation or mitigation funding, would help.

Economic and ethical imperatives

However, other considerations recommend combining adaptation and compensation programs, especially in their financing mechanisms. While off the table at COP19 at the insistence of the global North, both involve remedial national liability assessments, whether to prevent a threatened harm or to rectify one that occurs. Both, that is, could most defensibly be constructed around the “common but differentiated responsibilities” principle of the UN Framework Convention on Climate Change, which implies that nations with greater responsibility for causing climate change should be more liable for providing remedies to its most insidious threats, whether preventative or compensatory. Here, treating “loss and damage” along with adaptation as financed according to a common formula—albeit not the one instantiated under the voluntary nature of Green Climate Fund pledges—makes sense.

While not resolving conflicts between the two kinds of program for scarce funds, a strong compensatory mechanism holds out the implicit threat of greater overall remedial liability being assessed in the future as present adaptation needs go unmet, underscoring mitigation and adaptation objectives through economic and well as ethical imperatives. While the “pay now or pay more later” logic may not appeal to the “climate justice” sentiments expressed at COP19, it could help to motivate the actions needed to satisfy its goals.

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