2 December 2023, DUBAI – The Global Shield against Climate Risks held a high-level event at COP28 today titled “Broadening Financial Strategies: Practical Approaches to Address Loss and Damage – The Global Shield against Climate Risks”. Co-hosted by Ghana’s Ministry of Finance and the German Federal Ministry for Economic Cooperation and Development, the event sought to develop more ways to support marginalized people in climate-vulnerable countries as they respond to loss and damage through pre-arranged and trigger-based finance.
Increasing climate risks caused by extreme weather events make it more and more difficult for governments in the climate vulnerable countries to secure development successes and increase prosperity. To improve their risk management in an increasingly climate insecure world, the Global Shield offers support through tailor-made and country-driven pre-arranged financial protection packages. These ensure that support reaches the most marginalized groups more quickly than traditional humanitarian assistance. While it remains unclear how the new UNFCCC Fund for dealing with loss and damage will operate concretely, pre-arranging the response to extreme weather events might not be part of its work. This is why the Global Shield needs to become a strong Funding Arrangement for dealing with loss and damage and further capitalization is critical.
The Global Shield against Climate Risks as a platform for knowledge exchange, evidence building, viable financial protection solutions, and cooperation is a trailblazer in the context of risk management. Lessons derived from the Global Shield experience need to feed into the emerging international finance architecture dealing with loss and damage. Global Shield partners affirmed their eagerness to advance and accelerate learnings to contribute to the Fund for dealing with loss and damage and to establish coherence and enable complementarity in the mosaic of funding arrangements.
Since its launch at COP27, the V20/G7 Shield initiative has successfully initiated its work in several pathfinder countries, including Ghana, Pakistan and the Pacific region. In Ghana, the Shield has already realized several goals, guided by Ghana’s Ministry of Finance in collaboration with the Global Risk Modelling Alliance (GRMA) – an alliance co-developed by the Insurance Development Forum and the V20, providing open risk management tools, technical assistance, and funding for open models and data. In just five months, a series of comprehensive consultations paved the way for Ghana to scale up financial protection against climate risks. Just before COP28, the Ministry of Finance submitted Ghana’s Request for Support to the Global Shield, making it the first Global Shield pathfinder country to achieve this key milestone and serving as a best practice example for future Global Shield partner countries.
Hon. Dr. Henry Kokofu, Special Envoy of the CVF Presidency Ghana and the Executive Director of Environmental Protection Agency (EPA), representing Ghana’s Minister of Finance Ken Ofori-Atta, said: “We are pleased to announce that we just submitted the request for financial support and technical assistance to the Global Shield, focusing on three thematic areas: agriculture, coastal erosion, and drought. Through collaboration with the Global Shield, we look forward to strengthening our locally-owned risk insights through a toolkit of financial instruments to build a pipeline of adaptation and loss-and-damage-related projects for effective climate risk management.”
Ghana’s Shield request seeks to address the complex impacts of climate change in the country, focused on agricultural insurance, urban flooding, coastal erosion and enhancing the adaptive capacity and climate resilience of the Akosombo Dam. Findings from the effort will be the basis for a comprehensive and tailored support package provided by the Global Shield.
Svenja Schulze, German Federal Minister for Economic Cooperation and Development, stated: “The experiences with the Global Shield show how important it is to follow a comprehensive risk management approach. The inclusive country-driven process in Ghana is a proof of concept. We will ensure that these learnings are integrated in the set-up of the new fund responding to loss and damage.”
The Global Shield has advanced its regional work in the Pacific Islands, with Fiji, the Marshall Islands, Samoa, and Tonga officially confirming their participation in the development of a protection package. Fiji and Samoa are members of the Global Shield Board. The V20 Secretariat took the lead on several consultations with Pacific Island Ministries of Finance at the Forum Economic Ministers Meeting (FEMM), organized by the Pacific Island Forum in August and the World Bank Annual Meetings in October 2023. Engagement with other stakeholders in the region is ongoing. For example, discussions have been initiated with the Pacific Catastrophe Risk Insurance Company, PCRIC – Pacific Islands regional risk pool – to determine ways in which their work can be scaled up to successfully support more people with pre-arranged finance.
The Global Shield successfully built up its governance structure in the past year and is now fully operational. The first virtual Global Shield Board meeting in November 2023 brought together Board Members from vulnerable and supporting countries, working together to close protection gaps. Board members explored opportunities and challenges in the context of the emerging international finance architecture for dealing with loss and damage. Implementation and technical stakeholders in the field of pre-arranged finance regularly meet in the Global Shield Coordination Hub to coordinate implementation activities and develop new concepts, best practices, and standards.
With accelerating climate change, more severe and frequent extreme weather events are expected to threaten sustainable development gains of particularly vulnerable countries. To address this, the V20 Finance Ministers together with the Group of Seven (G7) and other supporting countries, launched the Global Shield against Climate Risks at COP27. With EUR 270 million raised in funds, the aim of the Global Shield is to increase protection for vulnerable people by providing and facilitating substantially higher and more effective pre-arranged finance against disasters.