Climate Change Experts Kick Against Market Based Mechanisms For Addressing Loss And Damages

Loss And Damage
Loss And Damage

Despite the robustness of the debate that characterized the African Regional Loss and Damage and Climate Financing Conference conversations in its third day, in Lilongwe, Malawi, African civil society players, climate activists and experts were unanimous in their decision.

A resounding NO, to market-based mechanisms through insurances schemes for taking care of loss and damage was their decision.

“You cannot create a global crisis and commodify and trade in measures meant to alleviate the suffering of the poor. Developed countries should not purport to be alleviating suffering of the poor in less developed countries by creating more business opportunities for their private sector entities,” said Charles Mwangi, Head of Programmes and Research at the Pan African Climate Justice Alliance.

While some of the participants supported the need for insurance to cover for losses and damage due to climate change as the only mechanism currently in existence, there was an outright denunciation of this measure by others who noted that it allows profiteers to maximize profits leaving victims and survivors of floods and droughts dry.

Julius Ngoma of the Civil Society Network of Climate Change of Malawi (CISONECC) said climate and disaster risk financing and insurance can play a key role in helping the continent meet its disaster funding needs.

However Dr Godwin Uyi Ojo, Executive Director, Environmental Rights Action/Friends of the Earth Nigeria (ERA/FoEN) noted that farmers are supposed to be compensated for loss and damage due floods which come as a result of heavy rains and this can only be done through a global financial mechanism established under the UN Framework Convention on Climate Change.

“Allowing market mechanism into this will perpetuate the injustices the poor rural farmers have endured,” said Dr Ojo who added that Africa must not promote solutions that comfort the big polluters to the detriment of those vulnerable such as climate insurance disregarding adaptation among others.

Dr. Thuita Thenya, from Wangari Mathai Peace Institute said the level of pay-out in the insurance sector is high so that the farmers are never getting compensated. “The farmers don’t have an understanding of insurance and threshold makes it easy for them to do an insurance policy that doesn’t benefit them. The data used for the insurance is sometimes too general and doesn’t work in the benefit of the farmer,” Dr. Thuita.

He said the market-based mechanisms thrive on “profiteering” at the expense of compensation for actual losses and damages experienced, under the climate crisis, across the African continent.

“The technicalities involved in insurances has seen farmers under this scheme end up with no compensation. It does not work. It is a mirage!” he exclaimed.

Nevertheless, Eva Haririsoa, Madagascar said the entry of the insurance sector into climate-smart solutions is needed and will ensure that poor rural farmers are not left behind.

Madagascar representative noted that the lack of mechanism on climate change continues to be a barrier in the fight against climate justice for the vulnerable people when disaster strikes.

Sharing the same views is Emmanuel Seck, Environmental Development Action who noted that Africa needs to look at different strategies at different levels with emphasis on a fund for Loss and Damage at global level.

A fortnight ago, over 400 people died when ‘rain bomb’ struck Durban, South Africa leading to flooded homes, highways destroying property and lives.

There was also a misunderstanding in the definition and understanding of what loss and damage is. While others want loss and damage defined within the disaster or emergencies, for Dr Ojo however, these two should not be confused. He added that when Africa talks about adaptation, this should not be confused with disaster risk mechanism.

Experiences from Malawi, South Africa, Zimbabwe and Madagascar show the escalating cost of climate change in Africa and that even the most effective adaptation mechanism cannot prevent loss and damages that are occurring due to climate change related disasters. “The need for fair, just and practical solutions cannot be gainsaid,” said participants.


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  1. Climate change a disaster in nature. All genius activist and expertise seniors peace making resilient build a team working together for the resolution. This is a fairy tale to the community hearing a voices is majority to those dependent in agricultural mechanism.


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