Tashkent, Uzbekistan (UzDaily.com) -- Since the Industrial Revolution, as a result of the rapid human activity in the development of natural resources, the content of carbon dioxide in the atmosphere has increased manifold. This, in turn, has a negative impact on the integrity of the Earth’s ecosystem and leads to climate change.

The uncontrolled and irrational absorption of minerals in order to satisfy economic needs and increase the level of comfort has led to the fact that humanity is increasingly experiencing the blows of nature and paying debts for its ambitions.

Thus, as a result of a five-fold increase in the number of natural disasters caused by climate change, over the past fifty years, more than two million people have fallen victim to floods, droughts, heat waves and hurricanes, and the amount of economic damage has reached US$4 trillion.

The irony is that the greatest damage from climate change is experienced by those states and nations that are less complicit in the causes of ecological imbalance.

According to the World Meteorological Organization, 91% of all deaths from natural disasters occurred in developing countries.

Economic forecasts are also disappointing. According to the estimates of the international non-governmental organization Oxfam (Nairobi, Kenya), the losses of developing countries from climate change by 2030 will reach 580 billion US dollars a year, and by 2050 the amount may even grow to almost two trillion.

Examples are not far to seek.

Central Asia, where the impacts of climate change are felt most acutely, is already experiencing severe climate change impacts. Among them, one can single out, first of all, the reduction in the area of glaciers - the main sources of water resources in the region. Over the past 60 years, the area of glaciers in the region has decreased by 30%. An increase in temperature by 2°C can lead to a reduction in the area of glaciers by 1.5 times, by 4°C - by 80%.

As a result, the level of water stress in the region is already reaching critical levels (Uzbekistan - 169%, Turkmenistan - 144%, Tajikistan - 62%, Kyrgyzstan - 50%, Kazakhstan - 33%), and 22 million people in the region do not have access to safe water.

According to forecasts, by 2050 water resources in the river of Syrdarya will be reduced by 5%, and in the river of Amudarya - up to 15%.

The region also faces the challenges of desertification and land degradation. According to the UN, about 37% of agricultural land in Central Asia is currently degraded.

Over the past 50 years, the amount of land covered by the process of desertification in the countries of the region has increased by 20%. In some parts, from 40 to 100% of agricultural land is degraded.

The reduction of water resources and soil degradation in the region, where most of the population is employed in agriculture, is a serious threat not only to the socio-economic development of the countries of the region, but to meet the basic human needs for water and food. Moreover, according to forecasts, the population of the region will grow from the current 77 to 110 million by 2050.

Developed and developing countries: who is to blame?

Under these conditions, for the further development of the countries of the region and the solution of urgent challenges to their sustainability and stability, it is critical to take large-scale measures to adapt and combat the consequences of climate change, which require enormous financial costs and efforts.

In the world community, the issue of allocating compensation to developing countries from developed countries for the damage caused to them as a result of climate change is becoming more and more relevant.

According to most experts, developed countries, which bear the main historical responsibility for greenhouse gas emissions that led to global warming, owe a moral debt to developing countries affected by climate change, despite their insignificant contribution to exacerbating this process.

Back in 2009, at the UN climate conference on climate change (COP15), the Copenhagen Agreement was adopted, according to which developed countries pledged to allocate US$30 billion to developing countries in the period 2010-2012 for adaptation and prevention of climate change, as well as to bring annual assistance to these targets are up to US$100 billion by 2020.

However, this goal has not yet been achieved. Analysts note that, for example, the United States, which was supposed to provide US$40 billion, provided only US$7.6 billion in 2020, Australia and Canada - only a third of the funding, and the UK - three-quarters.

According to the UN, international funding currently meets less than 10% of climate change adaptation needs, and the gap is widening.

Loss and Damage Fund

It is worth noting that the “revolutionary achievement” of the UN Climate Summit (COP27) held in Egypt in November 2022 was the creation of the “Loss and Damage” Fund, which will have to financially compensate the most vulnerable countries for the damage caused to them by climate change. This includes loss of life, destruction of infrastructure, and damage to various sectors of the economy due to extreme weather events associated with rising global temperatures, etc.

It is envisaged that the costs will be borne by the most developed high-income economies, which have most affected climate change. Moreover, they must do this voluntarily, but in such a way that financing and compensation for losses is guaranteed.

At the same time, as D. Morgan, Commissioner of the German government for climate, said, it will take at least two years to work out the mechanisms for the functioning of the Fund.

First of all, this is a solution to the issue of the Fund’s institutionalization, the identification of specific sources of funding, as well as the rules for allocating funds to affected states.

The key disagreement between countries on this Fund remains the definition of the category of developed (donors) and developing (recipients) states.

The volume of the Fund is also unknown. According to a number of experts, it is most likely that the amount of the Fund will be at least US$100 billion, which was envisaged by the previous UN agreement of 2009.

Whereas, according to a study by British and Egyptian scientists, developing countries will need up to US$2 trillion annually. This amount is for:

1) reducing greenhouse gas emissions;

2) creating the necessary infrastructure for renewable energy;

3) overcoming the multiple impacts of climate change;

4) addressing issues of poverty and jobs.

Moreover, the concept of the Fund involves assistance to "particularly vulnerable" countries. That is, there will be a gradation of those who need it, and not all developing states will be able to claim funds from this source.

Most likely, the Fund’s recipients will include the poorest countries in the world, where environmental problems are becoming catastrophic and there is not enough money to eliminate the consequences of their own.

Debt for climate swap

With the growing gap between the amount of adaptation assistance coming to countries and the amount they need, experts say debt-for-climate swaps could be one additional source of financing.

Earlier, ahead of COP27, UN Deputy Secretary General A. Mohammed mentioned a debt-for-climate swap as one of the refinancing options.

A debt-for-climate swap allows countries to reduce their debt obligations in exchange for a commitment to finance domestic climate projects with the freed up financial resources.

Beginning in 1987, the World Wildlife Fund began to practice the conclusion of exchange agreements with a number of countries in Latin America, Africa, and Southeast Asia, acting through its branches in the United States. Today, the system of such treaties covers about 40 states of the world (mostly the least developed).

Zambia is expected to trade debt for nature this year (preserving the Victoria Falls and addressing the climate threat) as part of ongoing discussions to restructure the country’s US$13bn debt.

Despite the fact that the debt-for-climate swap was used in relation to the least developed countries with a critical level of debt burden, in the future, given the aggravation of the climate agenda, it is likely to spread to other developing countries.

Thus, scientists at Tufts University (USA) note the following criteria for the successful implementation of a debt-for-climate swap:

first, developing a set of conditions for a debt-to-climate swap to reduce complexity and reduce time and cost;

second, a debt-for-climate swap should provide sufficient debt relief to allow indebted countries to invest in climate change adaptation and mitigation projects;

thirdly, another problem is known as "additionality". That is, the funds freed up by the debt swap should be used for additional efforts to combat climate change, and not for the implementation of already planned or ongoing projects to combat climate change.

In general, according to experts, despite the emerging shifts in the area of recognition by developed countries of the world of responsibility for climate change and its consequences, the issue of allocating compensation to affected developing states remains open.

It is noteworthy that in the world community the issue of compensation for damage from the consequences of climate change is focused on providing assistance to the least developed states. However, developing countries are also experiencing the severe effects of climate change.

And without significant efforts and support from the advanced states, the consequences of climate change can significantly affect the economic situation of developing countries and “roll back” their progress.

In turn, with proper and timely support, developing countries may well turn from recipients into donors that will be able to contribute to global sustainable development.

Leading Researcher

International Institute of Central Asia Jasur Kodirov