People displaced due to climate impacts are owed financial reparations, but there is no one party responsible. An insurance model, whereby primary and ancillary contributors to climate change pay in to a fund, offers a way forward.

Human movement and displacement resulting from environmental events are nothing new, but climate change is now bringing about displacement on an unprecedented scale. While there is disagreement over exactly how much displacement will occur, it is clear that rising sea levels, more frequent droughts and bushfires, and more intense extreme weather events will increase the displacement of individuals and communities.[1]

In this article, I refer to climate displacement as the temporary or permanent displacement of people, either within nation-states or across borders, which is driven in part by climate impacts.[2] Climate impacts are climate change-induced natural disasters or events, ranging from rapid onset to slow onset events, all of which increase the risk of displacement. The impacts of climate change are best conceptualised as compounding causes and harms that interweave with other drivers of displacement, drivers that are influenced by societal factors such as economic and social position, existing vulnerabilities and capacity to endure sudden change.

Climate displacement is complex and so too are the climate impacts that result in such displacement. Climate impacts can onset slowly, like the continued drying of arable land or rising sea levels; other impacts, like flooding or cyclones, onset rapidly.

The harms of climate displacement and the need for reparations

Climate impacts can result in property damage or loss, diminish income generation, fragment community relations, disrupt the supply of basic goods and services, limit people’s capacity to plan, and cause significant harm to livelihoods and physical and mental health. According to the World Health Organization climate change is expected to increase rates of undernutrition, heart disease, heat stress and the spread of diseases like malaria, leading to an estimated 250,000 additional deaths per year by 2050. Furthermore, symptoms of depression and an upsurge in anxiety and post-traumatic stress disorders have been reported in people who have endured climate impacts.[3]

Additional harms arise if climate impacts result in displacement. People who are displaced can experience the loss of property, land, income streams and territory. This disturbs and sometimes destroys people’s way of life, connection to place and right to self-determination.

A basic intuition of justice is that amends and reparations are owed to those who are harmed or wronged. Actors responsible for causing harm to others are morally obligated to right their wrongs and repair the injustices they inflicted upon others. Reparations aim to repair harm and wrongdoing. Like financial compensation, reparations are afforded by those responsible, to the harmed or wronged. In the case of climate displacement, reparations are better understood as a means of redistributing resources and altering policies and institutions that have caused harm, rather than just a one-off financial compensation.[4]

Just reparations for climate displacement require more than compensation alone, but the important reparative role that financial compensation plays should not be overlooked. Some people who are at risk of climate displacement have been offered migration rights – for instance, Australia recently offered citizens of Tuvalu the right to migrate to Australia – but, to date, there has been very little offered in the way of direct financial compensation.

Direct compensation for climate displacement gives people who are harmed and displaced by climate impacts dignity of choice, helping to restore individual agency. When financial resources are provided without restrictions, recipients can choose how to allocate these resources as they see fit. For those displaced internally, financial compensation can help repair or rebuild homes and shelters, assist in the revival of income streams, and allow people to acquire food, clean water and much-needed health care. For those displaced across borders, such compensation enables free movement and provides a safety net, making the demands of migration and re-settlement less pressing. Reparations that comprise financial compensation offer us one way of redressing some of the harms suffered by climate displacement. This, however, raises questions about who should pay for climate reparations.

The challenge of determining responsibility for climate displacement

When it comes to paying for the costs of climate displacement, determining responsibility becomes problematic, because there is no clear link between a sole cause and effect. This is because climate impacts interweave with other displacement causes and factors, compounding the harms and injustices already experienced by vulnerable people and communities.

For instance, in Australia, the unequal distribution of income and wealth has led to significant poverty in sectors of the community, with Aboriginal and Torres Strait Islander communities being disproportionately affected. The 2022 rapid flooding of Lismore resulted in the internal displacement of thousands of people. But Aboriginal communities were among those worst affected as many community members lived in more affordable, yet low-lying, vulnerable housing and they did not have access to the necessary resources, services and support to prepare for and respond to emergencies.[5]

The multi-determinant nature of climate displacement obstructs our sure judgments about responsibility, as does the sheer number of actors that contribute to climate harms. Nation-states that fail to take reasonable action to repair other social and economic factors also seem to bear some responsibility. There are also other intersectional factors and inequalities to consider around politics, race, sex, age, disability, and so on. So, how can we hold contributors to climate impacts responsible for climate reparations? To overcome this problem, an insurance-like model for financing climate reparations and displacement could be implemented.

An insurance model: recognising shared responsibility

An insurance model focuses on the overall increased risk of displacement caused by climate impacts. Just as the complex causes in medical negligence cases make it challenging to determine responsibility, leading to the adoption of insurance-based compensation models for patients who are harmed, the complexities in locating responsibility for climate displacement should likewise shift us towards thinking about an insurance model when it comes to financing climate displacement reparations. People who become displaced, whether or not that displacement is directly attributed to climate impacts, along with people who are affected by climate impacts in other ways, would be owed reparations.

This insurance model approach is a more effective way of financing climate displacement reparations and ultimately repairing climate harms. But who is obligated to pay into this insurance model?

Existing commentary on who ought to contribute to climate reparations, or who ought to pay into an insurance model, primarily focuses on high-emitting nation-states that have benefited greatly from carbon-emitting activities. This assignment of responsibility is captured by the principle that the greatest polluters or emitters should pay the most.

Yet, placing sole responsibility on nation-states to pay into an insurance model is far from sufficient. Ancillary actors, that enable pollution to continue or who actively promote anti-carbon reduction policies, for example, have largely gone ignored. With an insurance-like model for climate displacement reparations, the actors who contribute and benefit most from activities such as polluting, and who therefore primarily increase the risk of displacement, should contribute a higher share of the costs. However, just as we might consider the National Rifle Association of America to some degree morally responsible for the harms caused by gun violence, we ought to consider fossil fuel lobbies responsible for some increase in the risk of displacement.

In practice, a climate displacement insurance fund would pool contributions from primary and ancillary contributors to climate change – nation-States, fossil fuel companies, and lobbies or industries – and distribute those funds as a form of reparation to those who are displaced or affected by climate impacts. Ancillary contributors, such as high-emitting industries and fossil fuel lobbies, would be required to pay into the fund through taxes, or levies, similar to models like the Oil Spill Liability Trust Fund or The Amazon Fund. While legally enforcing fund contribution presents as a genuine hurdle that demands attention, previous contributions to similar funds through Corporate Social Responsibility initiatives (for instance, Petrobras’ contribution to the Amazon Fund[6]) gives us hope that there is a genuine possibility for this kind of ancillary responsibility taking and contribution.

Ancillary financial contributions would reflect their role in increasing climate risks, helping to uphold accountability beyond just nation-States. Unlike loss and damage agreements, which focus on compensation post climate-related disasters, this fund would proactively address displacement risks by pooling resources in advance, ensuring faster access to reparations for affected populations without the need to directly prove causality between contributors’, specific climate impacts and harms.

An insurance model presents a plausible and practical answer to the question of who is responsible for climate displacement and who should pay for reparations. Primary actors like nation-States and fossil fuel companies, and ancillary actors like oil lobbies should all financially contribute. That contribution ought to be proportionate to their involvement in increasing the overall risk of displacement.

An insurance model for financing climate displacement reparations would allow us to give those who are affected by climate impacts their due. It would also better capture the distribution of responsibility and ensure those actors who have increased the risk of displacement pay their fair share towards climate reparations.

 

Harrison Munday
Doctoral student in Political and Social Philosophy,
University of New England, Australia
hmunday3@une.edu.au

 

[1] bit.ly/ar5-synthesis-report

[2] This definition is borrowed, in part, from Draper J (2023) Climate Displacement, Oxford University Press

[3] See Walinksi A, Sander J, et al. (2023)‘The Effects of Climate Change on Mental Health’ Dtsch Arztebl Int, 120(8):117-124 bit.ly/effects-climate-change-mental-health

[4] See foreignpolicy.com (2020) ‘The Case for Climate Reparations’ bit.ly/case-climate-reparations

[5] See PreventionWeb (2022) ‘Effects of climate change such as flooding makes existing disadvantages for Indigenous communities so much worse’ bit.ly/flooding-indigenous-communities

[6] The Brazilian Development Bank (2017) ‘The Amazon Fund receives another R$ 271.2 million from Norway and Germany’ bit.ly/amazon-fund-norway-germany

 

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