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Loss and Damage, Minus the Fossil Fuels As Development Myth

Loss and Damage, Minus the Fossil Fuels As Development Myth
Catastrophic flooding in Pakistan, 2022. AP Photo/Zahid Hussain

Hello! Due to the holiday this week, I'm putting out the newsletter midweek instead of on Friday. On the podcast this week we dug into more of the back story on loss and damage, and the history of fossil fuel influence at COP. A modified transcript of that episode, with updates since it was posted, is below, along with a related reading list on all things climate, debt, colonialism, and corruption. The 4 Cs! Hope you enjoy.


Unpacking loss and damage and the long history of fossil fuel companies at COP

The 27th Conference of the Parties, the annual UN climate negotiations, have just closed in Egypt and the idea of Loss and Damage has been a real focal point of the negotiations. Last year in Glasgow, global North countries fought to keep the topic off the agenda. When it was made this year’s host country, Egypt vowed to put it on the agenda early, and they kept that promise.

But I’ve been seeing a lot of big gaps in the media coverage on this issue. Global South countries–of which there are more than 150–are often treated like a monolith, and the discussion around how to handle countries that are both on the front lines of the climate crisis and a major target for oil production is virtually non-existent. It’s something I’ve been thinking about a lot because we’ve been reporting a new season for the past two years on Guyana as that country emerges as a major oil producer. But also because I’ve spent so much time looking at the history of climate policy and how certain narratives have been shaped.

The remarkable news out of this year’s COP is that negotiators, including the U.S., which has historically been a big blocker to loss and damage, agreed to officially establish a loss and damage fund. But there are still a lot of lingering questions around how the Global North and Global South can move forward on addressing climate together. There’s the failure of to agree to include any language in the final agreement around phasing fossil fuels out, of course, but there are a bunch of other conversations that need to happen too, and they’re all informed by a history that seems to be widely unknown, or maybe just ignored.

The conversation around loss and damage goes back really to the initial drafting of the UN Framework Convention on Climate Change (UNFCCC) in Rio in 1992. Even back then, island nations led by Vanuatu were talking about the need for those that had profited from the industrial processes that caused global warming to help those experiencing only pain, no profits, to deal with this problem. In 2013, that conversation was formalized at the Warsaw COP.

"We have to ask ourselves, can we ever attain the ultimate objective of the convention, which is to prevent dangerous anthropogenic interference with a climate system, by failing to meet the objective of the convention?" Philippines negotiator Yeb Sano asked back then. Sano had traveled to Warsaw while the Philippines was being battered by Super Taiphoon Haian, and he made an impassioned plea. "We may have ratified our own doom, and if we have failed to meet the objective of the convention, we have to confront the issue of loss and damage. Loss and damage is a reality today across the world. And developed country emissions reductions targets are dangerously low and must be raised immediately. But even if these were in line with the demand of reducing 40 to 50% below 1990 levels, we will still have locked in climate change and we still would need to address the issue of loss and damage," he said.

After giving that speech, Sano went on a hunger strike, saying he would not end it until Global North countries committed to funding loss and damage. And here’s the first major historical milestone that I haven’t seen in ANY news reports on COP: They agreed! Yes! Back in 2013, wealthy countries, including the United States, agreed that by 2020 they would be putting $100 billion a year into a loss and damage fund. And then they just...didn't. So far only about $21 billion has ever been put toward loss and damage, and most of what was supposed to be effectively grant money to Global South countries in need of adaptation funding was turned into debt instead. Loans.

More debt is not something the majority of Global South countries need. Last year Barbados prime minister Mia Motley made history when she convinced the International Monetary Fund to help her hit pause on Barbados’ debt payments so that they could develop some of their GDP to climate adaptation. This year Motley was at COP with a proposal that would help all Global South Countries do the same. It’s called the Bridgetown Agenda. Here’s how Motley introduced it at COP:

"This world looks still too much like it did when it was part of an imperialistic empire. The global North borrows at interest rates of between one to 4%. The Global South? 14 percent. And then we wonder why the just energy partnerships are not working. Similarly, we ask ourselves if countries that want to finance their way to net zero and want to do the right thing, can't get the critical supplies, will they not have to rely again on natural gas as that clean bridge? This is the bald reality. And we have come here to ask us to open our minds to different possibilities."

She laid out the specifics of her plan in that speech too: the establishment of a climate mitigation trust that unlocks $5 trillion of private sector savings, provided the IMF would allow the use of its $500 billion Special Drawing Rights reserve. That would require not just a decision by the IMF but also of its member states…particularly the United States, as Motley made clear.

"We believe that that requires a change in the attitude of Congress because the agreement that establishes the International Monetary Fund requires 85% to change that agreement. And if the United States government has 17% of the board, then it can't be done, Mr. Gore, without your Congress."

She nodded to Al Gore there because he spoke just before her about the need to open up financing for Global South countries looking to adapt. But the Bridgetown Agenda isn’t just about debt restructuring and the IMF. "We believe that it is critical that we address the issue of loss and damage," Motley said. "The talk must come to an end, and I'd like to salute Denmark and Belgium and Scotland for their own modest ways of trying to accept the precepts and principles of loss and damage as critical and as morally just, but for loss and damage to work, we believe that it can only be an issue of asking state parties to do the right thing, although they must."

And then she made a convincing argument for drawing fossil fuel companies into the web of accountability around loss and damage too. It was a particularly interesting proposal given that, once again, the industry had more delegates at COP than any one country did.

"But we believe that the non-state actors and the stakeholders, the oil and gas c. And those who facilitate them need to be brought into a special convocation between now and COP 28. How do companies make 200 billion in profits in the last three months and not expect to contribute at least 10 cents in every dollar of profit to a loss and damage fund? This is what our people ask us. And I ask us as we reflect on what a loss and damage fund can look like and who should access it, that we convene a special convocation that doesn't only involve state parties, but non-state actors such as those same companies."

Motley has indicated that the G7 countries – Canada, France, Germany, Italy, Japan, the United Kingdom and the United States – seem generally supportive of her plan. It would have been a really huge deal if the final COP agreement contained the requirement for fossil fuel companies to contribute to loss and damage. US climate czar John Kerry has been talking about the need for the private sector to fund loss and damages, and his idea to make that happen is a carbon market. But if you’re going to ask fossil fuel companies to pay for the carbon they’re emitting today, what about their historic contributions to climate change? Where’s the private sector accountability on that front? Motley’s proposal at least named that particular elephant.

Ultimately, the final agreement only included some of the more technical details of the Bridgetown Initiative, around debt restructuring and “the reform of multilateral development banks and financial institutions." A major improvement for Global South countries trying to access financing for climate adaptation, but not exactly a full embrace of the Bridgetown Initiative.

Which brings me to the broader history of COP and the fossil fuel industry. As I’ve talked and written about a lot, the industry was at the table on international climate policy from jump. They were there, influencing government officials, when the UN Framework Convention on Climate Change was drafted, way back in 1992 at the Rio Earth Summit. A guy we’ve talked about a lot on the podcast, E. Bruce Harrison, brought together the various industries and companies that might be impacted by emissions regulations into a group called the Global Climate Coalition. He also started working internationally in advance of the Rio Earth Summit because he saw this whole COP situation coming a mile away. Back in 1972, Harrison had seen the impact of the first UN environmental summit, the United Nations Conference on the Human Environment, which birthed the Stockholm Declaration. This groundbreaking document made environmental issues global, emphasizing conservation, the redistribution of resources, and state responsibility for environmental damage both within and beyond their borders. It also had zero concern for business. To the extent that industry was included at all, in the UNCHE negotiations, it was as a culprit and a threat.

The first principle put forth in the Stockholm Declaration reads, “Man has the fundamental right to freedom, equality and adequate conditions of life, in an environment of a quality that permits a life of dignity and well-being, and he bears a solemn responsibility to protect and improve the environment for present and future generations.” Later on, the declaration reaffirms nations’ sovereign right to extract their own resources, but notably balances that right with the mandate that countries must “ensure that activities within their jurisdiction or control do not cause damage to the environment of other States or of areas beyond the limits of national jurisdiction.”

It led to the creation of new international laws, norms, and organizations focused on environmental protection, including the United Nations Environmental Programme (UNEP), which was formed as a permanent agency to act as “the environmental conscience” of the UN.

The Stockholm Declaration, combined with the creation of the EPA and passage of the Clean Air and Clean Water Acts in the US was a massive PR crisis for American industry, and a huge opportunity for Harrison.

Throughout the 1980s, Harrison scored himself invitations and speaking engagements at various UNEP events, where he pushed the idea that the more companies participated in the creation of environmental policies, the more effective those policies would be. To be clear, Harrison wasn’t the only person championing that idea in the 1980s, nor was his message a hard sell. Plenty of people were happy to embrace a business-friendly approach that required no economic tradeoffs. But given his domestic and international influence, Harrison was a driving force in this movement to allow polluting companies to shape environmental policy. In the late 1980s, he created two organizations—the Global Climate Coalition, which brought together manufacturers, oil companies, automotive, rail, and various other industries into a group that could effectively shape the global response to climate change, and EnviroComm, an international network of PR firms that would all use the same corporate messaging on environmental problems. Their stated mission was to monitor emerging environmental policy all over the world for clients and to influence that policy through strategic lobbying.

The idea was to fully integrate industry into the international approach to environmental issues. And the strategy was enormously successful. At the 1992 Rio summit, there was none of the urgency or directness of the Stockholm Declaration. Gone, too, was the emphasis on government regulation—replaced by a sort of big-tent approach that included business interests and prioritized compromise. “In order to meet the challenges of environment and development, States have decided to establish a new global partnership,” Agenda 21, one of the defining documents out of the 1992 Rio Summit reads. “It is recognized that, for the success of this new partnership, it is important to overcome confrontation and to foster a climate of genuine cooperation and solidarity.”

It was at the many events run by business surrounding that 1992 Rio Earth Summit, convened by the UN, that Harrison presented his paper on the concept of sustainable communication.

"He did invent the idea of sustainable communication, which was so genius, when you think about it," Melisssa Aronczyk, media studies scholar at Rutgers University, explains. "Because what does sustainable communication mean? It means communicating in such a way as to maintain a sustainable relationships with the people that matter, the people who are going to vote for you are the people who are going to support whatever it is your clients are doing. It does not mean sustainable practices or behaviors to protect the environment."

Harrison wasn’t exactly delivering his message to an unfriendly audience. Maurice Strong, the organizer of the Rio Earth Summit, was an oil man himself and often talked about the need for industry to be part of any effective climate solution.

"It's really important to remember that Maurice Strong, who was the organizer of that United Nations conference, was committed to having business participate in the conference," Aronczyk says. "Maurice Strong was quite compelled or convinced by the idea that if you did not have business as a key stakeholder in these conversations about sustainable development, that you would never be able to enforce it, you needed to have business at the table and in agreement."

In contrast to the 1972 convening, the UN encouraged business-community participation in Rio in 1992—and industry groups were ready to take advantage.

"Because business communities had been invited to the conference and because they knew that their buy-in was so important, they planned extensively in the lead up to the conference to be able to present what they called  their own sustainable development charter," Aronczyk explains.

“And as you can imagine, this charter did not contain anything that would have really transformed how companies did business. It was a very business-as-usual document, but it paid a lot of lip service to the idea of going green, of being sustainable, being very concerned about the environment. And because they got out in front of the actual conference, they were really able to put that document forward and stave off other kinds of more binding legislation or more draconian regulations that would have caused problems for these companies’ profits.” —Melissa Aronczyk, Rutgers University, co-author of A Strategic Nature

By the time the third COP, in Kyoto, rolled around, industry was deeply entrenched in the process, and absolutely determined to prevent a binding treaty from ever being ratified by the U.S. The Global Climate Coalition was fully funded and fighting the idea of Kyoto at every turn.

"The fossil fuel guys don't appeal to your head. They appeal to your emotions," Brown University environmental sociologist Dr. Robert Brulle says. "And then when it comes to, you know, the economic impact, they're going to basically say 'you're going to be cold and in the dark and eating, you know, raw vegetables, you know?' And it's an emotive function, that's what the PR genius is. And, you know, if you look at the commercial for the Global Climate Coalition, the GCC is, it's not global and it won't work. They get a map of the globe and they start cutting out the countries that don't have to comply with the Kyoto protocol, and they're cutting out  China, India, all of Africa and South America. And then they hold up this map of all of these holes in it. You know, they said, this is unfair. It's not global and it won't work and it's not fair. And that's what they ran on. And guess what? It works."

They worked with Senators Chuck Hagel and Robert Byrd to bake that idea into a resolution governing whether or not the United States could ratify Kyoto, too, should a binding agreement come out of it. Here’s how Global Climate Coalition chair Constance Holmes, talked about it back then:

"In July, 1997, the Senate passed the bird Hegel resolution on a 95 to nothing vote, almost an unprecedented vote. That resolution said in essence, the Senate would not ratify an agreement that is not global or would not ratify an agreement that caused the United States economy harm. The Kyoto protocol does not meet either test of the Byrd-Hegel resolution. The restrictions of the Kyoto agreement apply only to 38 countries of the developed world with no provision for participation of even the more developed of the rest of the world. On the first day of the meeting the developing countries, acting as a group, the group of 77 and China refused to let the subject of developing country voluntary participation remain on the agenda."

Fast forward 30 years and now it’s the fossil fuel industry arguing for those 77 countries to delay emissions reductions. Why? Because they need those countries’ oil to replace their reserves, and they need their citizens to keep burning fossil fuels. Without both, the industry is doomed.

"They need the oil, they have to replace what they pump every year, and there just aren't that many places left where an American oil company can own the oil that they produce, and that's what Wall Street judges them by," explains Steve Coll, investigative journalist for The New Yorker, and author of the book Private Empire about ExxonMobil.

That’s very different from the picture the U.S. fossil fuel industry paints today when they talk about their projects in the Global South, or about the benefits of “cheap” energy to these countries. Here’s how Mandy Gunesekara, a spokesperson for the CO2 Coalition…sort of a modern-day GCC…testifyied to Congress on this front:

"This country's ability to harness our vast energy resources in a responsible and an efficient manner has changed millions of lives for the better. It is why life expectancy and economic growth—both important indicators of human flourishing— have significantly improved. Advancements in fossil based energy and the development of modern economies has provided access to life saving technologies like heat during winter, water treatment, medicine, and refrigeration. A stark contrast exists today in countries that do not have sophisticated energy systems or access to affordable, reliable electricity in parts of the developing world. Life expectancy today is 10 to 20 years shorter, and children under five regularly succumb to preventable diseases. The reality is that we could change these outcomes by sharing our successful energy technologies, not by prohibiting their use as a result of misaligned environmental agendas."

The conversation gets a little messier when oil-producing countries in the Global South advocate for the ability to develop and use fossil fuels for longer too. And it makes sense: how dare the Global North, which amassed so much wealth thanks to abundant fossil fuels, turn around and tell the Global South they can’t do the same? I asked Melinda Janki, an attorney who’s fighting to shut down oil drilling in her home country of Guyana this question, especially since it’s not just ExxonMobil making that argument about its benefit to Guyana, but many of her fellow citizens too.

"The Global North has basically broken the global climate system as a result of greenhouse gas pollution,"Janki says. "And I think we should stop talking about emissions and called it what it is, which is pollution from fossil fuels. It is incredibly stupid for anybody to say, 'Well, because you did something bad and broke it, we now have a right to do something bad and break it even further.'"

Coll notes that you need only look at the last 100 years of history to see that when oil comes to town, citizens are not, in fact, lifted out of poverty.

"It does not pan out for anyone other than the elites of those countries," he says. "That's what the record shows. Development economics may not be a hard science like physics, but it has pretty well established that the so-called 'resource curse' in developing countries is a real thing over and over again. And it's not only oil, other resources can produce this cycle too, but what happens is that the elites that control the resource that produces sudden wealth and sudden opportunity generally don't distribute the benefits equitably. And I'm not even talking about some socialist kind of perfect redistribution, but even just to reinvest it in a sustainable strategy of private enterprise-led development just generally doesn't happen.There are a few, um, examples of rulers who lived for 10 or 15 years and who weren't so selfish as to keep it all for themselves and and so on, but they're more the exception than the rule. And it's not just about the greed of elites. It's also about the way sudden wealth distorts the patterns of investment in a country by essentially alleviating the pressure to educate a new generation of young scientists and tech entrepreneurs or wealth creators, or people who are going to figure out how to save and improve agriculture in an era of climate change. All of these urgent problems that emerging countries face in the Global South get displaced by the easy money that comes from a resource boom."

"And you end up not only running out of the bounty when the oil is depleted," Coll continues. "But you've missed the opportunity to pursue another course of development. The one easy example that is often cited—and of course it can be distorted around issues of culture or race and can be, I think, misstated—but with that caveat, in the 1950s, Nigeria and South Korea had roughly the same per capita income and they were both very poor countries. South Korea had just emerged from a terrible, long experience of foreign occupation. And Nigeria was blessed with this huge oil bounty. And South Korea chose to kind of industrialize on its own without a lot of resources. And in a single generation, one country got rich and the other one cycled through the resource curse and economists point to that and say, you know, statistically Nigeria may look like it had greater wealth, but in the experience of its society, the wealth ran offshore and, and often displaced opportunities that Nigeria might have had to build a more sustainable economy."

In the vast majority of cases, the big winners in these oil deals are not Global South countries, but the Global North companies that profit from their oil, much of which is exported out of the country. And no matter where you are in the world, proximity to oil and gas development is no guarantee of cheap energy; in the U.S., for example, Gulf Coast residents pay 25% more on average for electricity, despite living in one of the country's main oil and gas regions. Which brings us back to where we began: given the presence of fossil fuel influence on COP since its inception, and the rising number of fossil fuel delegates every year, perhaps it’s time to include them as official parties, just as responsible for turning the tide on climate and paying for damages as the governments they have manipulated over the years.


Abrahm Lustgarten's epic NYT piece on Barbados and Motley's debt-restructuring journey is the best journalism I've read all year, an absolute must-read to understand the debt-colonization-climate nexus.

A variant of the debt-swap conversation is the idea of debt-for-nature, which Clare Baldwin, Marc Jones and Simon Jessop delve into in detail in this terrific Reuters piece. Ecuador, for exmaple, is currently in talks with banks willing to cut its debt by $800 million in exchange for protecting the Galapagos Islands, and the critical biodiversity on and around them.

I wrote a couple of deep dives on the Global Climate Coalition and the industry-backed warping of international climate politics earlier this year, one for The Nation on Harrison's contributions and the other for The Intercept looking at the GCC in more detail thanks to Dr. Brulle's paper on them (the first and still only peer-reviewed paper on the GCC and its role in climate obstruction).

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