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Denmark first to offer U.N.-led climate compensation

Denmark became the first nation to pledge aid money for U.N.-led "loss and damage" climate funding meant to help vulnerable developing nations.

A woman points to flooded areas of Bangladesh's Gaibandha district in August 2020
A woman points to flooded areas of Bangladesh's Gaibandha district in August 2020 (AN/U.S. Embassy Dhaka)

Denmark became the first nation to pledge aid money for a United Nations-brokered system of "loss and damage" climate funding meant to help compensate vulnerable developing nations for the harm and suffering caused by human-caused global warming.

Denmark's Development Minister Flemming Møller Mortensen announced a pledge of more than 100 million Danish crowns (US$13 million) on Wednesday on the sidelines of the U.N. General Assembly's annual high-level gathering.

His government said it will provide assistance principally for Africa's Sahel region and the InsuResilience Global Partnership, a climate and disaster risk finance and insurance program led by the 193-member United Nations and the Group of Seven, or G-7, wealthy democracies.

"I am very pleased that we have agreed to increase support for climate-related losses and damages. I saw first-hand in Bangladesh this spring that the impacts of climate change need increased focus," said Mortensen.

"It is grossly unfair that the world's poorest should suffer most from the consequences of climate change to which they have contributed least," he said. "With this new agreement, we are putting our money where our mouth is and working across civil society, governments, the private sector and experts to tackle one of the greatest challenges of our time."

'The era of loss and damage'

Denmark's pledge marks the first time a U.N. member has promised to compensate developing countries for the long-term "loss and damage" from climate change caused by historical carbon emissions from industrialized nations' fossil fuel burning. Its offer is part of the nation's 2022 Finance Act and pledge to provide at least 60% of its climate assistance to countries trying to adapt to climate change.

Though Denmark joined the European Union in 1973, its climate policy departs from the stance that the the E.U., the United States and other wealthy countries have taken in opposing the establishment of a global loss and damage fund.

Under the 2015 Paris Agreement on climate change, an international mechanism exists for wealthy nations to help others "avert, minimize and address loss and damage associated with climate change impacts, including extreme weather events and slow onset events."

The process of turning that legal mechanism into an operational fund falls under the negotiating process of the U.N. Framework Convention on Climate Change, or UNFCCC, the treaty administered by the Bonn, Germany-based secretariat, U.N. Climate Change, through which nations hold climate talks.

Earlier this month, Climate Action Network issued a letter signed by more than 40 international organizations and hundreds of national groups calling for loss and damage financing to be added to the official agenda during the next round of U.N. climate talks in November at Egypt's Red Sea resort, Sharm el-Sheikh.

"We are in the era of loss and damage. In the last few months we have seen heatwaves, droughts and flooding sweep through the continents of Africa and Europe and countries such as Australia, Bangladesh, Canada, China, India, New Zealand, Pakistan and the U.S.," the letter says.

"A devastating crisis unfolds before our eyes in the Horn of Africa where some communities are facing famine-like conditions due to persistent drought," it says. "This is not a crisis of the future, nor one confined to national boundaries. This calls for a step up in global leadership, multilateralism, cooperation and solidarity at all levels."