Delays in cutting emissions set to cost developing countries hundreds of billions of dollars more

November 25, 2015

Oxfam report reveals spiralling costs of 3°C compared to 2°C warming
Developing countries’ economies risk being crushed under the double burden of climate change adaptation costs of almost $800 billion, and more than twice that in economic losses every year by 2050, if pledges to cut emissions are not improved, Oxfam warned today.

In a new report released for COP21: Game-changers in the Paris climate deal, Oxfam sets out seven steps to a Paris deal that will better protect poor people from climate change.

The international agency reveals that in a world warming to 3°C, developing countries are set to face an additional $270 billion more a year in adaptation costs by 2050, bringing the total to $790 billion. That means more than 50 per cent more could be needed for developing countries to protect themselves from climate change than in a 2°C scenario, which leaders meeting at the UN climate talks in Paris are aiming for.

Developing countries also face losing $1.7 trillion annually to their economies by the middle of the century if global average temperatures rise by 3°C. This is $600 billion more than if warming was contained to 2°C – four times more than rich countries gave in development aid last year.

Oxfam Canada’s Executive Director Julie Delahanty said: “Our report today shows the scale of the challenge facing the world’s poorest people as a result of climate change – a problem they have contributed very little to. We need further cuts to emissions and more climate funding so that vulnerable communities and poor rural women – often those most harshly affected by unpredictable floods, droughts and hunger – can adapt to survive.”  

“We welcome Canada’s commitment to tackling climate change and hope to see Canada put the needs of rural women living in poverty at the heart of discussions at COP21. Announcements on new climate financing for adaptation would be particularly welcomed.”  

Even now, if all of today’s public adaptation finance were to be divided among the 1.5 billion small-holder farmers in developing countries, they would each get the equivalent of just $3 a year to protect themselves from floods, severe droughts and other climate extremes – the cost of a cup of coffee in many rich countries.

The pledges by more than 150 countries to cut emissions, known as INDCs (Intended Nationally Determined Contributions) are expected to be the cornerstone of a Paris deal. But even if these targets are met, the world is likely to experience devastating warming of around 3°C. This could come despite the UN’s goal of 2°C, let alone the 1.5°C that more than 100 developing countries and Oxfam is calling for.

Currently, climate funding commitments to help poor countries adapt and develop in a low carbon way only run until 2020. Little progress has been made in agreeing how much will be available after this date, something which needs to be urgently addressed in Paris.

More funding is also needed if the promise of $100 billion a year by 2020 made six years ago in Copenhagen is to be kept. More of this needs to go towards adaptation, which remains woefully short.

Oxfam is looking to Canada to contribute its fair share – $4 billion a year – to the collective goal of $100 billion a year by 2020 for climate action in poor countries. This funding should be directed towards adaptation in particular, and should be additional to budgeted overseas development assistance.”

Oxfam estimates that public climate finance was around $20 billion on average in 2013-2014 but only around $3-5 billion was dedicated for adaptation – less than the 50 per cent minimum that Oxfam says is needed.

In its new report, Oxfam shows how the international context has changed since the ‘failed’ talks in Copenhagen. This includes a US / China deal on climate change breathing new life into the talks, spectacular growth in renewables, and interventions from high profile figures like Ban Ki-moon, Pope Francis and Islamic clerics. The INDCs have also been important in shaping the deal, but it has been mostly developing countries – including India and China – that have  met or surpassed their fair share of pledged emissions cuts. The world’s richest countries need to do more.

The report also pin-points what developments are possible in Paris to make the deal a better one for poor people.  This includes:
–        Addressing the lack of finance to help countries adapt by either agreeing that at least half of all public finance should go towards adaptation, or setting a fixed target of at least $35 billion by 2020 and at least $50 billion by 2025.
–        New contributors of climate finance beyond the traditional rich countries need to step up, including Russia, the Republic of Korea, Mexico, Saudi Arabia and Singapore.
–        Agreeing to a strong review mechanism that commits governments to increase the overall ambition of emission cuts from 2020, and every five years thereafter so that  runaway climate change can be avoided.
–        Agreeing to a long-term goal where rich countries lead the way in phasing out fossil fuels.
–        Improving the predictability of scaled up climate finance so developing countries can develop adaptation and development plans knowing what funding they can expect.
–        Announcing new sources of climate finance, such as the EU Emissions Trading Scheme, to stop diverting aid to climate finance budgets.
–        Provisions for loss and damage, which will ensure that poor people get the support they need where adaptation is no longer possible.

Oxfam is calling for progress on climate finance, especially for adaptation and for poor rural women who need it most, and greater ambition to cut emissions.
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For more information, to see the report or arrange interviews, please contact Lucy Brinicombe / +44 (0)7786 110054 / or Melanie Gallant / 613-858-2658

Links to pictures and testimonies showing the human impact of climate change:
Viet Nam – Coastal erosion and the salinisation of land; communities using renewable energy
Laos –Rice farmers adapting to the changing climate
Cambodia – Villagers facing eviction due to a new dam flooding their valley
Honduras – The affect of coffee rust on coffee farmers

Notes to editors:

Oxfam commissioned this research to Climate Analytics. The results from the AD-RICE model were adjusted to 2012 dollar value. Different assumptions were imputed into the model to obtain projections (e.g: number of sectors, adaptation options, damage function (a mathematical representation relating economic loss to future warming levels induced by climate change) and discount rate (rate used to define the present value of future cash flows). The model projections are sensitive to changes in the parameters imputed so results should be interpreted as an indication of magnitude as opposed to exact estimations. The numbers are therefore presented to the nearest 10 billion. Exact figures from the modelling were: by 2050 developing countries could face adaptation costs of about $794 billion per year, an additional $274 billion annually, compared with the estimated adaptation needs under a 2°C scenario (about $520 billion annually). The results should be considered conservative because of the top-down nature and high level of aggregation of the AD-RICE model. Both economic losses and adaptation costs could be significantly higher than projected. Click here to see details on the calibration of the model and the research results.

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