PARLIAMENTARY DEBATE
Climate Finance: Tackling Loss and Damage - 5 September 2023 (Commons/Westminster Hall)

I beg to move,

That this House has considered climate finance for tackling loss and damage.

July was the hottest month in global history. In three months the world will gather in one of the hottest regions of the world for COP28. All summer we have heard about and seen the impacts that climate change is having—impacts that will only get worse—and the need for urgent action could not be clearer. Simply put, this is the biggest, most existential threat to humanity and our planet, and I put it on the record that I am utterly disappointed that not one MP from the governing Conservative party is here other than the Minister.

The international community has come together in recent years to recognise the urgent need for financial support to combat climate change. Prominent milestones at various COPs over have established ambitious targets for climate finance. However, a fundamental problem persists. It is crucial to acknowledge that, despite the pledges and commitments, a substantial gap remains between promise and fulfilment, perhaps illustrated most starkly by the collective goal of mobilising $100 billion a year by 2020 for climate action in developing countries, agreed in Copenhagen at COP15 in 2009. This has still not yet been achieved.

To date, climate finance to developing countries has been focused on mitigation—namely, efforts to reduce and prevent the emission of greenhouse gases and adaptation—and adjusting to and building resilience against current and future climate change impacts. However, harms and losses will still be experienced by communities and ecosystems due to climate change that cannot be effectively mitigated or adapted to.

Loss and damage funding refers to the financial assistance provided to countries and communities dealing with the irrevocable consequences of climate change. It encompasses the destruction of infrastructure, the displacement of communities, the erosion of cultural heritage and, heartbreakingly, extensive loss of life.

At COP27 in November 2022 we witnessed a historic turning point in our global commitment to address loss and damage. An agreement was reached to establish a dedicated fund aimed explicitly at supporting vulnerable nations and communities grappling with the irreversible effects of climate change. The agreement underscored the urgency of recognising that climate finance is not solely about reducing emissions and adapting to changing conditions. It is also about providing financial redress to those who bear the brunt of climate impacts, often with the least historical responsibility for causing the crisis.

I congratulate the hon. Member on securing this important debate. When it comes to finance for loss and damage, does he agree with me that that finance has to be new and additional, not redirected from existing budgets? If we are looking for places where we might find such new and additional finance, if we put the polluter pays principle at the heart of this debate, we could, for example, look at the grotesque profits of the oil and gas companies, which amounted to a staggering $134 billion globally last year, or the billions that go into fossil fuel subsidies. Does he agree with me that that would be a good place to start to get the money we need for such a vital fund?

Not only do I completely agree, but I suspect my papers have been leaked because I was about to come on to that point. I completely agree that new and additional finance is key and I look forward to what the Minister will say. I will touch on that topic in more depth shortly.

There is no doubt the UK has contributed significantly to the climate emergency through its historical greenhouse gas emissions. From 1750 to the present day it is the seventh highest CO₂ emitter with just over 3% of estimated historical emissions. In contrast, the entire continent of Africa has a 3% share of cumulative CO₂ emissions and Oceania only 1%—two of the regions already the most devastated by the climate catastrophe.

I congratulate the hon. Member on securing this essential debate, because this is a global question. We know that the United Nations framework convention on climate change has recognised that responsibility must lie with developed countries, and finance must therefore come in the form of grants not loans, but I beg the Minister to consider, given that the UK Government lay so much emphasis on addressing immigration, the impact of climate change on the likely future movement of populations. We have a duty to put our money where our mouth is and address some of the causes, the drivers, of migration. That in itself is something that I would expect the Government to respond to in a most serious manner.

I thank the right hon. Member for a really valuable intervention. She reminds me of the startling numbers that I was given in 2017, at the first COP I attended, by a climate scientist called Dirk Messner. He described how, if we continue on the trajectory that we are on now, by 2050 1 billion people will be on the move because of displacement by climate change. A current figure is that more than one third of people on the move right now are on the move as a result, directly or indirectly, of climate change. Therefore the right hon. Member makes a very valuable point.

Not only has the UK made a massive contribution to the destructive impacts of climate change through its emissions, but it has benefited from the competitive advantage that its early adoption of fossil fuels and industrialisation brought and it continues to profit from the extraction of oil and gas from the North sea. The UK therefore has a moral obligation to recognise this historical responsibility and lead by example in addressing loss and damage. That cannot be denied or ignored. As we prepare to embark on the critical climate conference that will be COP28 in Dubai, it is paramount that the UK takes a bold and principled stance in addressing the devastating impacts of climate change, and encourage similar action from others as we collectively tackle the biggest global challenge facing the planet today.

I congratulate my hon. Friend on managing to get this debate on such an important issue. Does he agree that this Government’s credibility on climate finance will continue to be fundamentally undermined until the UK’s official development assistance budget is restored to at least 0.7% of GNI and the cuts are no longer threatening the many projects currently supporting vulnerable communities?

I thank my hon. Friend for a really valuable point. When I go out in the world today and speak to organisations and bodies in both Europe and the US, they are, frankly, disappointed at the UK’s position in recent years on the reduction in relation to GNI. It is a shame—it is our collective shame—and it needs to be altered radically. And for sure, money for loss and damage should not come from existing ODA budgets, which have already been shrunk.

To understand the imperative for loss and damage funding, we need to examine the profound, real-life and often irreversible impacts of climate change. At various COP meetings that I have attended, I have heard harrowing testimonies from citizens of small island states whose homes are disappearing underwater because of climate change. I recently watched devastating footage from the Solomon Islands, where sea level rise rates have been nearly three times the global average. Data shows that sea levels around the islands have risen at the alarming rate of between 7 mm and 10 mm a year—well above the global average of 3 mm a year. As a result, many coastal areas have been inundated, displacing communities and leading to the loss of arable land. Indeed, whole islands have tragically vanished beneath the rising waters.

The disappearance of islands such as Kale, Zollies and Kakatina is not only a stark statistic but a poignant testament to the reality of climate-induced loss and damage. I say this to the Minister: just imagine for a second that it was the United Kingdom that was facing disappearing—the entire nation disappearing under the waters that surround us. We would be acting very differently from how we are now. Those communities in the Solomon Islands have lost their homes, their ancestral lands and their way of life. The impact of climate change in the Solomon Islands extends beyond the numbers and statistics, reaching into the heart of the nation’s communities.

In east Africa, agriculture, reliant on timely and predictable rainfall, is a cornerstone of the economy; the region is highly vulnerable to climate shocks such as droughts and floods. Widespread crop failures and significant loss of livestock have led to vast economic losses that destroy livelihoods and deepen poverty and inequality. One person is likely to be dying every 28 seconds because of acute hunger and famine-like conditions as a result of climate change. This has been accelerated by an unprecedented series of failed rains, causing prolonged droughts, or places being hit by destructive flash floods, devastating people’s crops and livelihoods. Emergency humanitarian aid is simply not enough; the humanitarian system is not appropriate to address the increasing impacts of climate change. A loss and damage fund is needed, and needed now.

In Malawi, floods and droughts are on the increase. Events include Cyclone Ana, which in January 2022 affected almost 1 million people, of whom 190,000 were displaced, and Cyclone Freddy, which displaced more than half a million people, destroyed crops and livelihoods and caused almost 700 deaths. The World Bank estimates that climate change could reduce Malawi’s GDP by up to 9% by 2030, which is only seven years away. That means that, despite continued work and increasing resilience to climate-induced shocks in Malawi, the impacts of climate change continue to erode development gains, particularly for vulnerable populations.

I recently learned of the impact of initial loss and damage funding from the SNP Scottish Government to projects in Malawi to support safe housing construction and provide psychological support for victims. This is a small-scale community-led initiative that needs to go much further and be supported by a global fund. Funding the loss and damage fund is not a matter of charity; it is an act of justice.

The SNP Scottish Government have embedded the concept of climate justice in their international development framework, launching a climate justice fund in 2012, which is due to increase by £24 million over the next three years. That was the first of its kind in the world. Crucially, it paved the way for others when it again became the first in the world to commit funding to loss and damage at COP26 in Glasgow. The whole world was there to listen and the whole world wanted to see that movement forward.

The Scottish Government’s role in providing funding for loss and damage is characterised by deep commitment to climate justice, concrete financial contributions, active participation in global climate efforts and a dedication to innovative and collaborative solutions. Scotland’s global climate leadership credibility is reinforced by its domestic action. It is concerning that the UK’s reputation could be undermined by the current Government’s decision to grant hundreds of new oil and gas licences and, I am afraid, the Labour party’s weakness in watering down its £28 billion green prosperity plan.

Scotland is now seen as a trusted global partner when it comes to climate loss and damage. I hope the Minister will agree with me that the Scottish Government should be empowered to do more on the international stage, rather than be restricted or put back in their box, as some of his Foreign, Commonwealth and Development Office colleagues have suggested. Because where Scotland has led, others have followed: Denmark, Germany, Austria, Belgium, Ireland, New Zealand and Canada have all now pledged loss and damage funding.

The Scottish Government did not hang about and wait for others to act first. They did not create excuses to give themselves reason to delay making a commitment. They saw the urgent need for this funding and acted upon it. Although these funds are small, they are already making a difference, both in practical terms and in how they have prompted others to follow suit. I sincerely hope the UK Government will see the value in that and act without unnecessary delay.

Although Scotland has contributed to important progress, it is not happening fast enough globally. The UK and other Governments around the world have a responsibility to come together and ensure that the practicalities of the loss and damage fund are agreed at COP 28, and implemented as soon as possible thereafter. At present, there has been no agreement on what the financial size of any loss and damage fund should be and how it should operate through the Transitional Committee agreed at COP 27, which has been tasked with establishing the institutional arrangements and has been working over the past year.

Several areas of contention are still being debated and need to be resolved before the committee’s plan is considered at COP 28. One of those is whether the loss and damage fund should be housed within existing climate finance mechanisms, or operate as an independent entity. The Alliance of Small Island States has called for a

“fit-for-purpose multilateral fund designated as an operating entity of the UNFCCC Financial Mechanism”.

I stumbled across that fairly mighty quote. It has been echoed by other vulnerable states and civil society that wish to see a flagship dedicated fund. Let me make this point clear. This cannot be about relabelling existing money, a point the hon. Member for Brighton, Pavilion (Caroline Lucas) made earlier. Loss and damage funding needs to be new money going to new places—the places already experiencing the devastating effects of climate change—now.

Furthermore, if we are to embed the concept of climate justice properly in our approach, the voices of developing and vulnerable states must be listened to and acted upon, equalising power in this currently unequal relationship. Loss and damage funding should be tailored to their needs, rather than a top-down approach from those who do not share their experiences. It is also incumbent on developed countries to ensure that they do not divide consensus on the need for a loss and damage fund.

Existing climate finance arrangements are based on a 1998 list of 155 developing countries and 43 contributors. It has been suggested that not all developing countries should be eligible for support, as not all of them are particularly vulnerable and in need of urgent loss and damage funding. It has also been argued that countries such as China, India and countries in the middle east should be expected to contribute to the fund and that there should be a narrower definition, with recipients restricted to those countries with the least capacity to cope and adapt, alongside their susceptibility to harm and to be adversely affected.

While that does not seem overly unreasonable, many developed countries have not lived up to their climate finance obligations, and it is incumbent on them to ensure that these are met before expecting others to do so. This debate should not be used as a convenient excuse to stall progress on the establishment of the fund. Given that the UK is one of the 24 members of the Transitional Committee, it needs to be a champion for the dedicated fund, for firm commitments from developed countries and for transparent governance ahead of the committee presenting its plans at COP28. I look forward to hearing the Minister’s detailed statement of where he stands on this later in the debate.

Climate finance agreed under the United Nations framework convention on climate change was intended to provide new and additional resources for lower-income countries to tackle the additional challenges brought by climate change. Despite that, the UK has failed to provide climate finance in addition to its ODA budget. The current commitment of £11.6 billion in international climate finance from 2021 to 2026 is welcome. I would like to be absolutely assured that that will continue, but it is under pressure due to the UK Government’s reckless decision to cut their ODA budget from 0.7% to 0.5% of GNI at a time of escalating need—a point that has already been made.

There is concern that the UK will seek to delay climate finance commitments due to these significant aid cuts. Will the Minister confirm that that will not be the case? I am also eager to hear from the Labour Front Bench on this. Back in July, on reports that the commitment was being dropped, the Labour party refused to comment on whether it would commit to the £11.6 billion funding pledge, so I hope to hear whether the Labour party will obediently do as it is told by the Tories and follow every fiscal decision made by them, or will it recognise the severity of the climate crisis and ensure the pledge is met.

The UK Government must ensure that the money attributed to loss and damage is new and additional to existing climate finance commitments, and not diverted from existing ODA budgets. Climate change is a global crisis that requires a global response—one that should not come at the expense of other essential development initiatives. Current estimates place the cost of loss and damage in developing countries alone at approximately half a trillion dollars by 2030. Christian Aid has estimated that the UK’s fair contribution to this fund could be 3.5%, equivalent to between $10 billion and $20 billion. It would simply not be possible to absorb that in the current climate finance commitments or to cut other aid spending further to fund it.

To raise the necessary funds, we must explore innovative financing mechanisms, which must be based on the polluter pays principle, as touched on earlier. Those responsible for a significant share of emissions must bear a corresponding share of responsibility for the damage this is causing. It is not unreasonable to look to the fossil fuel industry to pay a proportionate share of those costs, particularly given the level of profit and excessive profits they are making and the subsidies they receive. The figures required to cover the costs of loss and damage are high, but they are dwarfed by the billions in subsidies that the fossil fuel industry receives and the profits it makes.

To understand that, the excess profits of the five largest oil and gas companies alone amounted to $134 billion last year, and the United Nations Development Programme estimates that global fossil fuel subsidies are now at a staggeringly $423 billion a year. If we put those figures together, we are into more than half a trillion dollars per year, showing that there is no shortage of money, rather it is concentrated in the wrong hands.

Analysis by Christian Aid has shown that £6.5 billion could be raised by a wealth tax to support loss and damage. New forms of wealth taxes that are broad based and that take into account different forms of wealth could help significantly in ensuring that money is available for loss and damage. If both the Conservative and Labour parties are serious about adequately tackling this global climate emergency, they need to take bold action, instead of being hand in hand in timidly ruling these options out.

Will the Minister commit to ensuring that loss and damage finance is provided in the form of grants, not loans? Vulnerable nations and communities should not be burdened with debt or struggle to recover from the ravages of climate change. The UK Government’s contribution to loss and damage funding should not be merely seen as a financial transaction; it should be a declaration of values, a commitment to climate justice and a recognition of the profound responsibility we bear in the face of this global crisis. We are truly in this together, and we cannot walk away now.

To conclude, I have made it clear that we have a moral and historical obligation, as well as an obligation in our own self-interest, to act in the face of this climate emergency. When we talk about loss and damage funding, we are talking about humanity’s response to one of the greatest challenges of our time. The urgency of this crisis demands swift and decisive action, and the financial commitments made by developed nations must reflect the severity of the situation.

It is our duty to ensure that those commitments are translated into tangible support for those vulnerable communities most affected by climate change. Without such support, we will see the climate crisis create resource scarcity and poverty, cause disease and displacement, and lead to conflict and, as we touched on earlier, mass migration. That will affect all of us in this Chamber. It will affect our children and our children’s children’s children to come. It is in our enlightened self-interest to ensure that loss and damage funding is there as an essential lifeline for those who find themselves on the frontlines of a crisis that they did not create.

It is our collective responsibility as good global citizens to ensure that we act boldly and decisively, in order to make sure that the most vulnerable receive the support they need to rebuild their lives and to make sure that by co-operating together we protect all of our futures.

Order. We have three Members indicating that they wish to speak in the debate. I will start up the wind-ups just before 10.30 am, so that leaves around 10 minutes for each Member who wishes to speak.

It is a pleasure to serve under your chairship, Mr Betts. I congratulate the hon. Member for Dundee West (Chris Law) on securing this debate, and the Backbench Business Committee on enabling it. It is a pleasure also to follow two such powerful speeches, including, of course, from the Chair of the International Development Committee.

“We do not own the world, and its riches are not ours to dispose”

were the words that a constituent wrote to me, which were taken from an old Quaker testimony. I only occasionally reference my Quaker faith or background in this place—or indeed on Radio 4, as I did yesterday—but the climate crisis is one area where my faith, and many other faiths, drives that ethos. We have all heard and seen so many moving testimonies about how the climate crisis impacts communities and ecosystems across the world, and we know that this devastation will only accelerate.

There is also the particular concern and worry facing island nations, whether the Maldives or the Solomon Islands. We know that island nations are on the frontline of the climate crisis. It is not academic for them; it is a matter of survival. The establishment of a loss and damage fund at COP27 is a landmark agreement and one that has come only after years and years of the most climate-vulnerable countries pushing for change.

I could talk at length about the particular challenges, but I want to focus on just why it is important for us in the UK to proactively support, and to take leadership on this. First, it is a matter of basic principles and humanity. We have a duty to help those across the world who are at risk. We are already seeing the personal impact of the climate crisis on communities, whether it is those in Africa facing prolonged drought, or those in countries such as Pakistan and Bangladesh seeing record floods. We cannot ignore the reality in front of our eyes. All of us have a duty to work to tackle this crisis. Many of my constituents will have close links to those communities through family, friends or shared ancestors.

Secondly, we have seen in the past that global leadership can and does work. One example is when the UK—and yes, Margaret Thatcher—led the way in signing the Montreal protocol, which was a global agreement that regulated and phased out substances that were damaging the ozone layer. This shows that global action works. The regenerated forests that have resulted are the visible testimony to that agreement. But why, when looking for examples, must we go back 40 years? Surely this is an area where the world and the UK should be stepping up again.

Thirdly, the climate emergency causing droughts and floods across the world means that whole communities are losing not only their homes but their food sources and livelihoods. They are having to move in mass migrations that put further pressure on the areas they arrive in, which are also vulnerable themselves.

Finally, it is in the UK’s interests to ensure that we take the lead on global action to fight the climate crisis and protect communities who will be hit the hardest. I was lucky enough to attend COP26 in Glasgow. I still remember the powerful and moving testimonies from world leaders and communities who will be, or already are, on the frontline of the climate crisis. These are the communities whose lives will be changed or ruined, and who will see, or already are seeing, the scars of the climate crisis.

It is estimated that there will be 1.2 billion climate refugees in the next 25 years—individuals who are made refugees in their own country, often within a matter of hours. One year ago, as my hon. Friend mentioned, we saw unprecedented floods in Pakistan. Millions were displaced and thousands killed, and the recovery is ongoing. I put on the record my thanks to the British charities for their amazing work. In the coming weeks I will be visiting, together with Islamic Relief, to examine some of that work. My question is: is it vital that the Government make a serious commitment to climate finance for loss and damage at COP28, which is coming up?

My hon. Friend references the crisis—those terrible floods—that we all saw last year in Pakistan, which so many of our community members and charities such as Islamic Relief stepped up and took a lead on. Yes, our Government did help, but it sometimes felt like the charities and volunteers were in there first, and the Government followed. The floods in Pakistan are just one example of the climate crisis.

We have heard much about the support funding for nations because they, and the UK in particular, need to take a lead on this. It is important that we support countries in ensuring that they can access clean and green energy sources for domestic energy. As an example, many island nations are reliant on expensive imports, especially fossil fuel generators, to provide domestic heat and light. Surely one area where the UK can and should be leading is on the export of green, clean energy sources. That will not only help to tackle the crisis, but support well-paid and green jobs both in the UK and around the world.

In conclusion, the UK needs to be a leader in supporting and assisting countries around the world. I look forward to hearing from the Minister about what the UK is going to do to ensure that we protect the world’s most vulnerable communities from this crisis.

It is a pleasure to serve under your chairmanship, Mr Betts. I congratulate the hon. Member for Dundee West (Chris Law) on securing this debate and his excellent contribution. I also congratulate the Chair of the International Development Committee, my hon. Friend the Member for Rotherham (Sarah Champion), and my hon. Friend the Member for Brentford and Isleworth (Ruth Cadbury) on their powerful contributions.

This is an important debate. In March this year, I was proud to be elected president of the Forum of Young Parliamentarians of the Inter-Parliamentary Union, which is like a United Nations of legislatures. It represents 180 national Parliaments around the world. I vow to use the position to make young people’s voices heard on the world stage. I hope my contribution will be a small part of fulfilling that promise, because young people will be not only the victims of climate change but the greatest contributors to action against it. It is a profound injustice that those least responsible for causing the climate emergency will suffer the worst of its consequences. At the same time, debt burdens and increased food and energy prices mean that many climate-vulnerable countries have less fiscal capacity to deal with those consequences—for adaptation, mitigation, loss and damage, or the resulting harms to health, the environment and ways of life.

I welcome the confirmation, in an answer to my written question, that it remains the Government’s intention to deliver £11.6 billion of UK international climate finance between April 2021 and March 2026. I hope, however, that the Minister will stand up to those in his own party who would like to see the UK abandon that commitment. I urge him to take the opportunity today to clarify how the UK will meet its commitments within the existing timeframe, including front loading climate finance and showing how that climate finance will be new and additional.

To meet our commitments, however, we need to go further. We must properly tax the big polluters; we know that fossil fuel corporations knew the harms their products were causing. They covered up the science for years, funded disinformation and spread doubt, delaying action that could have saved countless lives. Those very same companies are currently raking in obscene, record-breaking profits, predominantly due to the effects of the war in Ukraine. Polluters must begin compensating for the destruction they have caused to our environment and to the lives of the people who have done the very least to cause the climate emergency.

Research from Greenpeace has shown that the fossil fuel industry made enough in profits between 2000 and 2019 to cover the costs of climate-induced economic losses in 55 of the most climate-vulnerable countries nearly 60 times over. It is the responsibility of the richest countries, which set global tax rules, to make that a reality. The importance of doing so could not be clearer. Estimates have shown that the world’s most vulnerable countries can expect to suffer an average GDP hit of 19.6% by 2050 and of 63.9% by the beginning of the next century. Even if global temperature increases are limited to 1.5 °C, vulnerable countries face an average GDP reduction of 13.1% by 2050 and 33% by 2100.

Even if 1.5 is kept alive, a properly functioning loss and damage mechanism is urgently needed. Failure to do that will be felt particularly acutely across the continent of Africa, with eight of the top 10 worst affected countries being there. In the first six months of 2022, there were 119 climate and weather related events in developing countries, causing £26.2 billion worth of losses in the countries affected. That shows the scale of the challenges we face as part of an international community.

My colleagues have made the case for a moral responsibility for loss and damage. It is also in our economic self-interest, however, to take greater action now. We must build on the breakthrough agreements of last year’s COP. Now is the time to operationalise the loss and damage fund—to put the money in and to get it working—in order to direct finance to those communities with the greatest need. I will continue to make those calls, alongside colleagues, and I will be proud to make them at COP28, which I hope to attend in my new role later this year. The Minister should rest assured that young people will continue to make those calls until they are listened to.

We now move on to the Front Benchers. I think they may have worked out that there is more time than their allotted 10 minutes, although they are not required to take longer and I would like the mover to have a bit of time at the end to wind up.

It is a pleasure to serve under your chairmanship, Mr Betts. Although Members may not have used all the time available, all the contributions have been substantial and this has been a worthwhile debate, which I warmly congratulate my hon. Friend the Member for Dundee West (Chris Law) on securing. I recognise his commitment to, and passion for, climate justice over many years. I think he has the distinction of attending the most UN framework convention on climate change conferences of parties of any serving MP—if not, he is certainly close to the record—so he speaks with an experience and authority to which we all, especially the Minister, ought to listen.

We have just returned from a summer recess during which the UN Secretary-General said:

“The era of global warming has ended; the era of global boiling has arrived”.

Only a very small minority of people anywhere in the world would now be prepared to argue that the extreme weather being experienced across the globe is not evidence of the impact that human-driven carbon dioxide emissions since the industrial revolution have had on the planet’s climate. Sadly, some of that minority still inhabit the Conservative Back Benches—although none of them has been brave enough to come to this debate to articulate that—and that has regrettable consequences for Government policy.

As every Member who has spoken in this debate has said, the reality is that climate change poses an existential threat—not necessarily to all human life, but certainly to the lifestyles to which we in the west have become accustomed and to which we encourage others elsewhere in the world to aspire. In 2015, when my hon. Friends and I were first elected, we would come to Westminster Hall debates and say that climate change threatened to undo the progress that had been made towards meeting the millennium development goals and driving down global poverty. Eight years later, we can say with certainty that climate change is undoing that progress and is in fact driving up hunger, poverty and disease in many parts of the world. That is why addressing the issue of loss and damage is so important.

The concept of loss and damage and the need for additional finances to repair loss and damage caused by climate change is not new; it dates at least to the early 1990s when the Alliance of Small Island States first brought it to the table of the existing UN framework. The hon. Member for Brentford and Isleworth (Ruth Cadbury) spoke powerfully about the threat that small island states face. They are among the first to experience the impact of climate change and face the prospect of their islands being literally wiped off the face of the earth by rising sea levels or becoming uninhabitable as marine ecosystems break down. My hon. Friend the Member for Dundee West asked the Minister to imagine if this country was threatened with being swamped—it is! Not far away, there is a tidal barrier that increasingly cannot cope with the tidal surges and rising sea levels, so this country is going to be affected. Low-lying areas of this island will be affected by climate change.

We all need to act, and that is what loss and damage is about. It recognises that some of the impacts of climate change will be literally beyond repair and certainly beyond prevention and mitigation. That in turn means that support for people and places affected by loss and damage also has to go beyond existing support. If climate change is undoing progress towards the sustainable development goals and poverty reduction, by definition the support to make up for it will have to be additional to what has already been pledged or assessed as required.

In 2022, the Vulnerable Twenty, or V20, which is a group of the Finance Ministers of countries vulnerable to climate change, estimated that

“Climate change has eliminated one fifth of the wealth of the V20 over the last two decades: initial evidence shows that the V20 would have been 20% wealthier today had it not been for climate change and the losses it incurred for poor and vulnerable economies.”

Therefore, there is an important economic argument. Free marketeers and capitalists who see trickle-down economics as the rising tide—ironically—that floats all boats should be paying attention to this. It reminds me of Lord Stern’s description of climate change in 2006—17 years ago—as

“the greatest and widest-ranging market failure ever seen.”

So let the free marketeers come up with their solutions if they want to—some of that has been addressed, and we will come back to it. It is crucial to understand that this issue must not be ignored. A price has to be paid to deal with the impact of climate change. The question is, who will pay it and how?

The hon. Member for Liverpool, Walton (Dan Carden) made important points about the role of future generations and our responsibility towards them. He was right to say that those who have done the most to cause climate change, and who have benefited from the extraction of the earth’s resources and the pumping of pollution into the atmosphere, now have a moral responsibility to support those who are most affected by climate change. That is the concept of climate justice, which has been adopted by the Scottish Government, and many other Governments and climate campaigners around the world, but the UK Government conspicuously avoid even acknowledging it, let alone accepting or committing to it. We will wait, I suspect again in vain, to hear the Minister say that the UK Government accept that climate justice is an important concept that exists and ought to be lived up to.

The important symbolism around the concept of reparations and reparative justice should not be allowed to get in the way of the urgent need to mobilise new additional funding to support countries and communities experiencing loss and damage from climate change. One key point that everyone has made today is that that funding has to be additional, which is also why we have to consider new and innovative ways of leveraging funding. Private sector companies, particularly those that make vast fortunes from the extraction and consumption of fossil fuels, clearly have to be a source, either through direct contributions to global funds or through taxation or levies at a country or international level. That is the “polluter pays” principle, which was raised by the hon. Member for Brighton, Pavilion (Caroline Lucas) and others who have spoken. There have been long-standing calls for a financial transaction tax, or Robin Hood tax, which could raise additional capital for fighting climate change.

It is particularly important that funding is disbursed in the form of grants and not loans; the right hon. Member for Dwyfor Meirionnydd (Liz Saville Roberts) made that point. There might be other ways, including insurance-based models—there is a lot of innovative thinking in this area—but we must not drive developing countries even further into debt.

Indeed. Those most likely to be affected by the adverse impact of climate change are already burdened by debt, which cripples their economies. My hon. Friend agrees that loss and damage funding should be additional and in the form of grants, not loans, but does he support the proposal that finance should be mobilised through the cancellation of existing debt? The SNP has spoken about that for a long time.

Yes, that is a hugely important concept. We think of all the work done around the Jubilee 2000 campaign, 23 years ago, and the huge global effort and consensus about the need to take action because developing countries were being crippled by the debt they had incurred. That is not good for anyone; it is not good for us either. Progress was made, but again we seem to be going backwards on a lot of that, and the changing climate seems to be a driver. That has to factor into the discussions. The work begun at the most recent COPs, including COP26 in Glasgow and the commitments made last year in Sharm el-Sheikh, must be followed through, and a new governing instrument must be agreed at COP28 this year. The hon. Member for Rotherham (Sarah Champion), the Chair of the International Development Committee, made important points about the Santiago Network and some of the other mechanisms that exist.

What is needed above all is political will: decision makers who are prepared to take bold and innovative action. As my hon. Friend the Member for Dundee West said, that is exactly what the Scottish Government have done: first, way back in 2012, when they established their climate justice fund in addition to the international development fund; then at COP26, when Nicola Sturgeon pledged £2 million for loss and damage, making the Scottish Government the first western Government to do so; and now just recently when they committed a further £24 million over the next three years to respond to climate change in Rwanda, Malawi and Zambia. Malawi’s President, His Excellency Dr Lazarus Chakwera, said in February that the Scottish Government’s loss and damage fund for projects in his country

“has made huge differences in the people and their livelihoods because they are given a hand up, so the resilience we talk about becomes a practical issue.”

He went on:

“This fight belongs to all of us and I believe that this example will serve as a prototype of what could happen.”

Perhaps now the UK Government will start to play their part. Perhaps they will begin to see, as my hon. Friend the Member for Edinburgh North and Leith (Deidre Brock) said in an earlier contribution, that the savage cuts to the aid budget are a false economy. All the evidence that we have heard in this debate shows that more funding is needed, but this Government are determined to spend less. In the end, it will cost more. The hon. Member for Manchester, Gorton (Afzal Khan) and others spoke about population movements. Home Office Ministers themselves stand at the Dispatch Box and say that hundreds of millions of people are on the move and that they all want to come to the United Kingdom, but instead of—

Yes, the hon. Lady is exactly right. Rather than housing people in barges or hotels, or chasing them back into the sea, it would be considerably cheaper if we helped to build resilience in their countries of origin against climate change that we have caused and that our lifestyles are continuing to make worse. That would save money in the long run.

I do have to say that there is also a challenge here for the Labour party. It would be useful to hear the shadow Minister, the hon. Member for Leeds North East (Fabian Hamilton), commit to the principle of climate justice and a return to the 0.7% target, because voters, particularly in Scotland, will be listening carefully.

The Scottish Government’s actions have already shown that it is possible to make decisions and show leadership in this area and to encourage others to follow suit. In an independent Scotland, 0.7% would be the floor, not the ceiling, for our spending responsibilities to the poorest and most vulnerable people around the world. It would be the morally right thing to do, as others have said, but it is also in our enlightened self-interest.

Normally I would make a point about the spending being preventive, but the whole point of loss and damage is that it is now almost impossible to prevent some of the effects of climate change that we are already experiencing. Even as we speak, it is unseasonably warm; it is the start of September and we are once again experiencing record temperatures outside. But we can prevent loss of life and livelihoods with the right kind of investment and support for those who need it most. If we do not, it will cost more in the long term and we will all pay the price.

It is a pleasure, as always, to serve under your chairship this morning, Mr Betts. I congratulate my friend—I hope he does not mind me calling him that—the hon. Member for Dundee West (Chris Law) on securing the debate. We have always got on well and I always like listening to him. He has introduced perhaps one of the most important issues that this Parliament will ever have to contend with, but this is sadly not the first debate that I, nor my hon. Friends in this room, have attended from which Government Members have been absent. I am delighted that the Minister is here, but where are his colleagues? It is really sad. This is not a party political issue. It is a matter for us all, as parliamentarians representing our constituents, to try to stop the greatest catastrophe that faces humanity on this planet. We need to work together.

The hon. Member for Dundee West reminded us that July 2023 was the hottest month in history, and said that there is an urgent need for climate finance to fight climate change and that at COP27 an agreement was made on loss and damage finance. He said that financial redress to countries worst affected must be new and additional finance, not redirected from existing budgets. I do not think anybody can disagree with that. He also reminded us that by 2050 it is estimated that there will be 1 billion migrants looking for somewhere else habitable to live because of climate change—[Interruption.] Will they all, as the hon. Member for Dundee West asks from a sedentary position, be coming to the UK? Some might argue that; I doubt it very much, but they will be travelling across the globe, seeking refuge. It is important that we stop that happening in the first place. That would be at least one answer to the small boats challenge.

If nothing is done to mitigate climate change, it will have a devastating effect on human livelihoods. The hon. Member for Dundee West said that loss and damage funding is needed now. He was followed by an extremely powerful speech from my hon. Friend the Member for Rotherham (Sarah Champion), the Chair of the International Development Committee, which I am glad still exists even if the Department has been abolished, because we need to be reminded that development is not just a luxury. It is not something that we cannot afford to do; it is something we have to do, and in the interests not just of the most vulnerable across the world, but of all of us—even in this country. Prolonged drought, she said, in sub-Saharan Africa has put many into further food poverty, and the International Development Committee produced work on the impact of climate change, loss and damage.

We then heard from my hon. Friend the Member for Brentford and Isleworth (Ruth Cadbury), who also gave a very powerful speech, on an issue that she is passionately committed to. She mentioned her Quaker faith. In my Front-Bench role over these last few years, I have always found the Quakers to be hugely supportive, not just in fighting climate change but in peace and disarmament, the principal role that I currently hold. Sometimes, she said, it seems that charities are ahead of Governments in financing the cost of climate change. She asked what we can do in the United Kingdom to export clean green energy—a very good question, it seems to me.

We then heard from my hon. Friend the Member for Liverpool, Walton (Dan Carden), who has been elected president of the Inter-Parliamentary Union’s forum of young parliamentarians, which is an incredibly good position from which to campaign for something so vital to all people on earth, but especially younger people. He said that it was a profound injustice that those least responsible for the causes of climate change suffer the greatest damage. It should be the polluters who pay; I do not think anybody could disagree with that.

Every time I visit a school, the first and most powerful question that I am most frequently asked, as I am sure other Members are—everyone else is nodding—is: “What are you going to do to stop the climate crisis?” Young people are going to inherit the world we leave them. They continuously, repeatedly tell us to do something about it. I congratulate my hon. Friend the Member for Liverpool, Walton (Dan Carden) on his election.

I thank my hon. Friend for that intervention, because that is exactly the point. I am now privileged to have two grandsons, the youngest of whom is three and a half years old. He is not quite knowledgeable about climate change yet, but the seven-year-old is. It is something they study at school, and my hon. Friend is absolutely right. At every primary school that we visit—we all do it—the first thing they raise is: “What are you going to do to stop this planet becoming uninhabitable because of our own actions and history?” We have to answer to them. They will inherit the Earth, not us.

My hon. Friend the Member for Liverpool, Walton went on to say, as other Members did, that Africa will be the biggest continental victim of climate change globally, and—as others also said—that loss and damage support is in our own self-interest.

I again thank the hon. Member for Dundee West for securing this debate. As we know, the climate emergency is the greatest challenge the world faces. Where are the Government Members, who should also be talking about this? The UN has warned that our planet is on course for a catastrophic 2.8° of warming, in part because the promises made at international climate negotiations have not been fulfilled. As we know, this would have devastating consequences for our natural world, and dangerous and destabilising effects on all countries, not least, as I think the hon. Member and my hon. Friend the Member for Rotherham mentioned, many of the islands of the Caribbean. Indeed, the CARICOM ambassadors have lobbied me as shadow Minister for the Caribbean, which is one reason I am winding up on behalf of the Opposition today.

As we know, 2.8° of warming would usher in an era of cascading risks, as the uncontrolled effects of global heating result in more frequent extreme heat, sea level rises, drought and famine. We have seen devastating examples of extreme weather this summer, as heatwaves and wildfires have caused devastation and loss of life. As has been said this morning, this will end up hitting us in the UK as well. We are seeing its effects already, with floods and heatwaves becoming the norm, not the exception. As the SNP spokesperson, the hon. Member for Glasgow North (Patrick Grady), said just now: look outside; it is quite unseasonable. I returned from a holiday in Majorca on Friday. It is warmer here today than it was when we left Majorca. That is quite wrong.

This will end up, of course, hitting us in the UK, too. We are seeing the effects already. Global heating will hurt us all. But the truth is that developing countries and people living in poverty are the most exposed to the worst consequences of the climate emergency. At COP27 in Egypt last year, the issue of loss and damage was front and centre of the discussions. Like the UK Government, we supported the recognition of the issue of loss and damage at COP27. The agreement to create a new fund was an important step forward in recognising the consequences of the climate crisis for the world’s most climate-vulnerable countries.

This is a matter of solidarity, and the reality is that those most likely to be affected by climate change are the least able to afford to adapt to it. Every speaker today has made that point. The UK Government already support poorer countries to cut emissions and to adapt to climate change. Loss and damage, however, is about coping with its disastrous effects. This is not about mitigating or preventing; it is about helping the poorest countries to cope with the effects that have already happened.

Supporting poorer countries is not only the right thing to do, but in our self-interest. We need all countries to act on climate and reduce their emissions and the destabilising effects of climate breakdown, which will end up coming over here, including, for example, in the risk of climate refugees, as we said.

But on the necessary actions to keep global warming to 1.5°, yet again we hear the unmistakable sound of the can being kicked down the road. As a result, that is now at grave risk, as the UN has said. It appears that even those on the Government Benches do not trust their Government to act on these issues. On 30 June, the Minister for the International Environment, Zac Goldsmith, resigned, accusing the Prime Minister of being “simply uninterested” in climate action and the environment. We can see why he might think that.

It is now 14 years since a promise of $100 billion of finance was made to developing countries to help them to fight the climate crisis. There is growing recognition of the urgent need to reform how multilateral development banks and the international finance system can support climate action and unlock resources. Earlier this year, there was a major summit of world leaders on a new global financial pact, hosted by President Macron, but the Prime Minister chose not to bother turning up.

We now hear that the Prime Minister is not even planning to attend the UN General Assembly this year, where climate change will be top of the agenda, as it should be. That is a lamentable and short-sighted snub, an illustration of how the Government are squandering Britain’s potential for international leadership. That comes as the Government’s statutory climate advisers warned this month that the Government are missing their targets on almost every front. They said:

“The UK has lost its clear global leadership position on climate action.”

The Minister of State, Foreign, Commonwealth and Development Office, the right hon. Member for Sutton Coldfield (Mr Mitchell), has committed to publishing this year how the Government will meet their £11.6 billion climate finance target. During recent FCDO questions in the House, he said that he would do so “probably in September”. I therefore press the Minister present today on whether he is still committed to that and whether he will publish the ODA allocations for international climate finance in 2022-23 and 2023-24.

We need a Government who can step up on climate action, delivering cheap, home-grown zero-carbon power at home so that we have the credibility to pressure other countries to fulfil their obligations and play their part. A Labour Government would put addressing the climate crisis at the heart of our foreign policy—every single foreign policy. Central that will be Labour’s proposed clean power alliance of developed and developing nations committed to 100% clean power by 2030, just over six years away. That will be a positive version of OPEC, positioning the UK at the heart of the single most significant technological challenge and opportunity of the century. Alongside that, we will push for climate action to be recognised as the fourth pillar of the UN, increase our climate diplomacy in key states and work with international partners to press for a new law of ecocide to prosecute those responsible for severe, widespread or long-term damage to the environment.

For the sake of every human being on the planet, all the creatures that live on this planet and all of our children, including my two grandsons, Britain should never be a country that absents itself from the world stage, particularly not when it comes to the climate crisis—the biggest long-term issue we face. A Labour Government would certainly once again lead at home and abroad.

I call the Minister to respond. He has a reasonable amount of time, but would he leave at least a couple of minutes at the end for the mover to respond?

It is a great pleasure to be here, Mr Betts. I am responding on behalf of the Minister for Development and Africa, my right hon. Friend the Member for Sutton Coldfield (Mr Mitchell). He would have taken this debate, but he is currently in Kenya attending the Africa climate summit, appropriately enough. It is my pleasure to respond in his place.

We are all grateful to the hon. Member for Dundee West (Chris Law) for securing this important debate. I pay tribute to him for to his ongoing work on the International Development Committee. We have heard a series of powerful, interesting and passionate speeches this morning, and I am grateful for all of them.

As the debate has highlighted, floods, heat, storms and droughts triggered by climate change are increasingly threatening lives, homes and livelihoods. Poor, vulnerable and marginalised communities around the world, and women, girls and disabled people in particular, are disproportionately affected. The loss and damage are immense. As we discussed, last year’s devastating floods in Pakistan claimed 1,700 lives, put a third of the country underwater and left more than 20 million people in need of humanitarian assistance. That is why, at COP27, the UK and international partners agreed to set up a new funding arrangement for loss and damage, including a new dedicated fund, in response to concerted calls, especially from our colleagues in the small island developing nation states and least developed countries, for greater global action.

There is now widespread recognition of the scale of the need arising from climate impacts, and that new ways of working and new solutions are needed. This debate is very timely: we are only three months away from COP28, where the transitional committee on loss and damage established at COP27 will report its conclusions. As a member of the committee, the UK has been actively and closely engaged in this process, alongside colleagues from developing and developed countries. The third meeting of the committee, in the Dominican Republic, has just wrapped up, and there is one more to go before parties meet in Dubai.

Within and beyond the COP process, the UK has played a leading role in tackling climate change, recognising the absolute necessity of reducing emissions to avert loss and damage. We have decarbonised faster than any other G7 country and signed net zero by 2050 into law. We are supporting international efforts and ambition to decarbonise through key initiatives, including the just energy transition partnerships, and we are funding a broad range of activities that avert, minimise and address loss and damage.

At COP27, the Prime Minister reaffirmed the UK’s £11.6 billion climate finance pledge to vulnerable countries across the world and announced that the UK will triple climate adaptation funding to £1.5 billion in 2025, alongside the £1.5 billion we are investing in protecting the world’s forests and £3 billion to protect and restore nature. This funding will help countries as they build their resilience, prevent biodiversity loss and reduce emissions, all of which are vital as we attempt to prevent and address loss and damage.

It is of course part of the ODA spend.

The UK invested £2.4 billion worth of international climate finance between 2016 and 2020 into adaptation, including investments in areas relevant to loss and damage—the subject of this debate. That included about £196 million on financial protection and risk management, £303 million on humanitarian assistance, and £396 million on social protection. To give a specific example, I mentioned the dreadful floods in Pakistan last year, and the UK offered significant support in the aftermath of that disaster. This included support for water, sanitation and hygiene, to prevent waterborne diseases, nutrition support, and shelter and protection for women and girls. In total, the UK provided £36 million in support following the flooding, on top of the £55 million we had already pledged for climate resilience and adaptation in Pakistan.

The UK is doing what it can to help avert, minimise and address loss and damage from climate change, but given the scale of the challenge, we know we have to be more creative in the ways we support countries to manage the impacts, and that includes developing new financial mechanisms to provide support. An example of this is the Taskforce on Access to Climate Finance, launched by the UK in partnership with Fiji. The taskforce is working to make it easier for the most vulnerable countries to take advantage of the climate finance that already exists.

The taskforce was launched following the UK-hosted climate and development ministerial in 2021. I am pleased to see that there will be a third climate and development ministerial held this year, with the UK, UAE, Vanuatu and Malawi co-hosting an event on how better development and climate actors can work together, which will build on the success of the first two.

On top of that, at the summit for a new global financing pact in Paris in June, the Minister of State, Foreign, Commonwealth and Development Office, my right hon. Friend the Member for Sutton Coldfield (Mr Mitchell), announced that UK Export Finance had started discussions with 12 partner countries in Africa and the Caribbean to add climate resilient debt clauses to new and existing loan agreements. That builds on the announcement at COP27 that UKEF would be the first credit export agency to offer those clauses, which allow Governments to delay their debt repayments and free up resources to fund disaster response and recovery.

I am listening to an exhaustive list of the things that the Government claim they are doing, but I have not once heard that there is any new additional money for loss and damage outwith the budgets already in existence through ODA. After all, that is what the debate is about. Will the Minister tell us whether there is new finance? Or will he follow the suggestion made by several Members regarding the polluter pays principle, and consider financing it out of the more than half a trillion a year of subsidies and excess profits for fossil fuel companies?

I grateful for that question and it is, of course, too early for the UK to say whether or how much we might commit to any dedicated loss and damage fund, because the work of the transitional committee has not yet concluded. We will assess the value of the contribution once the modalities of the fund are set. It is too early to say, and I am sure the hon. Gentleman appreciates that.

The UK also provides significant support to disaster risk finance—prearranged finance that is disbursed automatically to Governments and first responders such as the UN and NGOs if an event exceeds a pre-agreed magnitude. Through disaster risk financing programmes, we have provided over £200 million since 2014. With partners including Germany, the UK has set up regional insurance schemes in Africa, the Caribbean, south-east Asia and the Pacific that help countries get reduced premiums by buying insurance as a group. Those schemes often pay out significant sums that help countries get back on their feet following a disaster. That is just some of the work the UK is doing to avert, minimise and address loss and damage, providing official development assistance and delivering reforms that help countries cope with climate change. The work of the transitional committee and the new loss and damage fund will build on the steps taken so far, and I look forward to their recommendations to parties at COP28.

In conclusion, the UK recognises that the impacts of climate change are leading to loss and damage, and that is likely to get worse. More needs to be done at global, regional and local levels to help countries and communities avert, minimise and address these catastrophes. We are playing our part, with our £11.6 billion ICF commitment, the fastest emissions reduction in the G7 and support for countries across the world as they reduce their emissions and build resilience.

When loss and damage occurs, the UK is regularly one of the first nations stepping up to provide support, enabling countries to bounce back quickly. COP27 was a major milestone for loss and damage. The UK is working with countries across the world to make sure that the new funding arrangements deliver for the most vulnerable, and we look forward to making further progress on that at COP28.

I am not quite sure where to begin, because we covered such a range of points, so let me begin with how I feel. I feel insecure, scared and concerned for the generations of today and tomorrow and for generations to come. I do not feel reassured by what I am hearing from the Minister. There are 352 Conservative MPs in this House and only the Minister is here to talk about the biggest existential threat we have to our planet and humanity. I find that astonishing. I have listened to a lot of the points made about where the UK has done some good work. Zac Goldsmith was mentioned and I would like to credit him; I was at COP27 last year when he asked me to go and talk to Pacific island states and to get an agreement on loss and damages. I deeply regret that he is no longer at the helm, because, frankly, he was really helpful and understood what has been going on.

The Minister with responsibility for international development, the right hon. Member for Sutton Coldfield (Mr Mitchell), who I had hoped would be here today, said recently to the all-party group on extreme poverty, which I chair, that he was losing sleep at night about the realities of climate change. It is disappointing that he is not here today, but the existential threat and crisis is with us now.

The hon. Member for Rotherham (Sarah Champion) —my hon. Friend, in that we are both on the International Development Committee—said that this issue is not going away. It is utterly disappointing that not a single Member of the UK Government party that is in power and who can steer events at the next COP and all the meetings ahead is here. By the way, the rest of us in the Chamber all want to be with the Government on this. This is not about competition or a political foray; it is about getting it done together. I cannot sleep either when I think about speaking about this to my nieces or in schools in my constituency. What am I supposed to say? I have been to every single COP since 2017 and whenever I go, the issue of time gets more pressing.

The hon. Member for Brentford and Isleworth (Ruth Cadbury) used a fantastic quote from the Quaker faith:

“We do not own the world, and its riches are not ours to dispose of at will.”

That is right; we are responsible. We are all guardians of this one Earth together. Frankly, if the Prime Minister is a billionaire, good luck to him, but he needs to be front and centre on this issue, not avoiding going to the next UN General Assembly.

I also thank the hon. Member for Liverpool, Walton (Dan Carden), who I have had the great privilege to work with over the years. As a young parliamentarian, he is the future, along with many other young people here and out there looking at what the future holds. As for the generation behind them, the first thing that I heard from Labour’s Front Bencher, the hon. Member for Leeds North East (Fabian Hamilton), is that one of his two grandchildren, the seven-year-old, is learning about climate change now. I do not remember growing up like that. The hon. Member for Liverpool, Walton probably did not have to grow up like that, but children are today. This issue is utterly, utterly pressing, and the time has run out.

The hon. Member said that fossil fuel companies knew about the harms but spread disinformation. Wake up—smell the CO₂ emissions. We need to harness that and realise what has happened. We can correct the wrongs now, because the future will not be protected unless we do this now.

On a slightly lighter note, I studied social anthropology at university and I remind the few of us who are here of Margaret Mead’s very famous quote:

“Never doubt that a small group of thoughtful, committed citizens can change the world; indeed, it’s the only thing that ever has.”

This is my plea to those in this room, in this Parliament, and to our parliamentarians and those out there in the world: the UK can lead and it will be done through these thoughtful, committed citizens. It is our responsibility to do it.

Question put and agreed to.

Resolved,

That this House has considered climate finance for tackling loss and damage.