The Global Shield was recently launched by the G7 Summit and vulnerable twenty (V-20) countries on November 14, 2022,2 atCOP27, and it is expected to begin after the conferences. The German Federal Ministry for Economic Cooperation and Development (BMZ) released the Global Shield concept plan, which aims to give and facilitate more disaster financing to countries that are vulnerable to climate disasters, allowing them to more cost-effectively and effectively minimize and address loss and damages caused by climate change.
- Germany tops the list of the largest contributors to Global Shield, around US $172 in contributions were given by Germany to kickstart the initiative, whereas France, Canada, Ireland, and Denmark together contributed US $42 million and further contributions are expected.
- The first countries that will get the benefits of Global Shield are Bangladesh, Costa Rica, Fiji, Ghana, Pakistan, the Philippines, and Senegal.
Why is it Significant?
The World Meteorological Organization (WMO) released a report in 2021 that examined the mortality and economic losses caused by weather, climate, and water-related extremes, storms, and floods, which have become Asia's most common disasters. According to the data, there were 81 percent of natural disasters between 1979 and 2019, accounting for approximately 91 percent of the associated economic losses and 96 percent of the deaths.
The developing nation will contribute less to the climate change, they often bear the brunt of its effects. In order to recover from the tough situation, these countries took out loans at higher interest rates which increased their debt burden and impoverished them further.
Flooding struck Pakistan in August, affecting roughly one-third of the country's land and affected the lives of approximately 33 million people. Not only this, but flooding also caused damage to Pakistan's GDP of around 10 percent, whereas this country contributed only 0.9 percent of the world's greenhouse gas emissions previouis year.
At the time of Global Shield launch event at COP 27, Ghana finance minister and V20 chairman Kenneth Nana Yaw Ofori- Atta highlighted the important role in order to address the climate inequality and providing help to those countries which are affected by the climate disasters and provide them timely and effective relief required so that they cannot struggle for long term.
According to a press statement, Special Envoy of the Climate Vulnerable Forum Henry Kokofu also urged developed countries to contribute their fair share towards mitigating climate change.
Who will be Overseeing ?
To make sure that the aim of the Global Shield is achieved, the concept plan stated that the initiative will focus on building on existing institutions like the Ins Resilience Global Partnership for Climate and Disaster Risk Finance and Insurance Solutions (IGP), which is a kind of similar programme that was launched in COP 23.
Global Shield will be led by the High-Level Consultative Group (HLCG), which is basically an expansion of the IGP's HLCG and will be providing the political as well as strategic guidance for the project. Their main duties include choosing beneficiary countries, sending political statements of support, and soliciting further donations and help from governments, philanthropists, and non-state partners.
The Global Shield Financing Structure plans to work with the government, NGOs, humanitarian agencies, private sector companies, and existing CDRFI programmes and services to plan out country specific requirements and design and implement support packages.
How will this intitaive accomplish its aim?
Around 1.5 billion people in the V20 region lack any insurance, hampering their ability to recover from the natural disaster. The Global Shield declared its commitment to addressing the protection gap as well as making sure that there will be coherency among its many partners by coordinating the CDRFI of the G7, V20, and other climate-vulnerable economies.
The document further reads that the Global Shield will also set up flexible and collaborative financial structures. They are hoping that it will facilitate financial instruments and assistance to households, businesses, governments, humanitarian agencies, and NGOs for disaster preparedness and insurance.
After the announcement of this initiative, many non-governmental organizations have expressed doubt about the Global Shield, because of its focus on developing insurance vehicles for low-income, climate-vulnerable countries. Harjeet Singh, head of global political strategy at Climate Action Network, has objected to the initiative and said that how funds will be spent, and how investment could benefit affected communities.