A Fossil Fuel-Funded Climate Disaster Response Fund under the Warsaw International Mechanism for Loss and Damage Associated with Climate Change Impacts

Abstract

AbstractThree sets of social institutions deal with catastrophic risk: government regulation through rule making, the market, and civil liability. Climate disasters expose the limitations of all of these social institutions and often result in extensive uncompensated losses, particularly in developing countries. The author proposes the establishment of a fossil fuel-funded Climate Disaster Response Fund to compensate victims for the ‘residual’ risk of climate disasters in developing countries that are particularly vulnerable to the impacts of climate change. This Fund, established under the UNFCCC’s Warsaw International Mechanism for Loss and Damage Associated with Climate Change Impacts, would comprise levies placed on the world’s top 200 fossil fuel companies. This proposal is modelled on various domestic and international funds which have been established to overcome the difficulties posed by tort law and which require companies to pay for the hazardous consequences of their activities and products. Precedents include funds to compensate for the damage caused by toxic chemicals, oil pollution spills, asbestos and nuclear accidents.