New Loss and Damage Fund Is a Win-Win

The 2022 UN Climate Change Conference, or COP27, ended with a historic deal to create a new loss and damage fund. Through this arrangement, developed countries, responsible for high carbon emissions, will compensate developing countries suffering from climate-related disasters that cannot be mitigated or prepared for, such as floods or droughts.

The new fund is a win for developing countries, but it’s also a win for developed countries like the United States. If the fund is negotiated well, and everyone is held accountable for their contributions, it can help the American economy, health, and national security. In this “Tip of the Iceberg” episode, host Ethan Brown breaks down why the loss and damage fund is beneficial for all.

For more information, see the companion essay here.


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ETHAN: Last week was the bad news from cop 27. This week is the good news. Well, if only every environmental news story had a week of bad news, followed by a week of good news, and then like 100 more weeks of good news to make up for the past three millennia. Happy Friday. I’m Ethan Brown, and this is tip of the iceberg, where I will break down some environmental news and then answer a question from our listeners on the air. submit questions via Patreon email or social media. Patron questions go to the front of the line, so sign up at Sweaty penguin. 

ETHAN: This sweaty penguin is presented by Peril and Promise, a public media initiative from the WNET group in New York reporting on the issues and solutions around climate change. You can learn more at

ETHAN: The bad news was that oil and natural gas did not make it into the final documents though at least the idea was more seriously discussed this time around. Let’s move to the good news. I know you’re all dying of anticipation, which is why I will not launch into a rant right now about why the media was way too quick to apologize to Jeff Saturday after he got his first win against the Raiders. I mean he’s lost two in a row now he’s got no coaching experience in high school or college and his offensive coordinator is Doogie Howser why anyone thought one win against an awful Raiders team made this a good hire is absolutely beyond me. But nope, we’re not getting into that. The good news is that a cup 27 the world came together to establish the first ever loss and damage fund. loss and damage refers to unavoidable suffering caused by climate change that which countries cannot mitigate or prepare for. It does not stand for the irrevocable suffering caused by listening to your uncle Clemes take on your new boyfriend at Thanksgiving. 

ETHAN: Recent examples of loss and damage include the disappearance of land from Pacific island nations a historic drought in the Horn of Africa displacing 1.5 million people as they search for food and water. And this year’s floods in Pakistan, which submerged a third of the country killed more than 1700 people and cause $30 billion in economic damage. I would argue that the 2017 reboot of the mummy starring Tom Cruise is another good example of unavoidable suffering countries could not mitigate or prepare for, but that would have nothing to do with climate change. Developing countries came to cop 27, insisting on the creation of a fund to address loss and damage, noting that they did little to cause climate change and don’t have the money to withstand these damages themselves. It’s like having to pay for everything that broke in the china shop even though you didn’t bring the bowl in there. After a tough negotiation process, these developing nations succeeded in establishing a fund, wealthy nations will contribute and developing countries will be able to put that money toward recovery from the worst climate disasters. And then Tom Cruise will get all the credit. Pretty amazing, right? I hear he did all his own stunts. 


ETHAN: Now almost all the stuff I’ve read and heard about loss and damage presented as a moral issue. Wealthy countries caused climate change, so they should pay to clean it up. And yeah, that sounds pretty fair. And we could do a whole episode on the moral debate about a loss and damage fund. But unless it’s deep fried and on a stick, I don’t know that a lot of Americans would be enthused by a moral argument on its own. When it’s just a moral argument. It almost tricks us into thinking it’s a win lose proposition, that as the United States, we’re just doing it to be nice or atone for past omissions or something. With that framing. It’s no wonder news media in the United Kingdom and Australia have already misinterpreted loss and damage as a global conspiracy on par with the Queen’s corgis being mi six agents. And I would not be surprised at all if Americans embrace similar misconceptions as the news story takes hold here. 

ETHAN: And that’s why I want to make a different case to you a about loss and damage. Sure it’s a win for developing countries, but it’s also a win for the United States. If the fund is negotiated well, and everyone is held accountable for their contributions, it can legitimately help our economy, health and national security. 

ETHAN: Most Americans would tell you we have too many issues here at home to be anyone else’s piggy bank. And by piggy bank, I obviously mean a rusted out Ford pickup filled with raw hot dogs. But what happens if a developing country experiences an unavoidable climate disaster and can’t handle the cost? Economically, countries could go bankrupt or fail to repay international loans, meaning Americans would no longer be able to export to these countries costing us jobs back home. Disasters could also disrupt global supply chains further spiking inflation. 

ETHAN: Americans could also be hit with public health impacts. outbreaks of infectious diseases such as Calera, measles, and malaria are on the rise and drought stricken East Africa and flooded Pakistan as these disasters deteriorate sanitation and disrupt vaccination efforts. These diseases are rare in the US, but the Coronavirus made clear that an uncontrolled disease outbreak on the other side of the world can quickly thrust our country into a crisis. 

ETHAN: Natural disasters have also been an opportunity for terrorist groups to try to build support. When Pakistan struggled to fund recovery efforts from catastrophic flooding and 2010. militant Islamic terrorist groups set up small food distribution sites in flooded areas and attempted to appeal to displace people. And when you’re in the middle of a natural disaster, and your biggest concern is not starving to death. You can’t really fault anyone for accepting extremist rice. recruitment opportunities for militants undoubtedly threaten us security. And we just have to hope that extremist rice doesn’t turn into extremist PETA or god forbid extremist burritos. 

ETHAN: And I don’t even want to speculate on how a country on the brink of complete collapse would behave on the international stage. I’m guessing it would be just like my high school stage minutes before opening night of our town. When the director was found passed out drunk in the teachers lounge, and Greg’s smashed Stephanie sees violin and flushed it down the toilet, except also ammo. In all seriousness, we talked in our solar geoengineering episode about the danger of a country in desperation, shooting aerosols into the air to try to artificially cool the climate. And certainly there are many experts studying how such extreme loss could spur global conflict. I don’t want to paint an apocalyptic picture here. But I think we can agree none of that sounds good from the American point of view. 

ETHAN: It’s no wonder then, that this year, the United States already contributes to recoveries from climate disasters around the world a little bit. This year, we’ve already provided 97 million in aid to Pakistan in response to flooding, and over 870 million in aid to Somalia in response to the drought. These aren’t handouts, their investments and America’s economic and national security. It’s like investing in FTX or Beanie Babies, I’m sure those will always be worth something. 

ETHAN: Now, that’s not to say a loss and damage fund doesn’t raise concerns from the US perspective. But a lot of these concerns were addressed at COP 27. For example, loss of damage is unequivocally not code for climate reparations. You might see headlines using the terms interchangeably, but they’re very different things. Climate reparations would be countries paying damages based on their historical emissions, it would invite legal liability into the process. I know some in the climate world like that idea and want to see that. But that’s not what this loss and damage fund is. The entire world signed off on the condition that loss and damage would not involve liability at COP 21 and 2015. And again in drafting the cop 27 agenda. 

ETHAN: You’re European Union and United States delegates have also made clear they will not take an unfair deal. Their position remains that funding must only go to the most vulnerable countries and rapidly growing economies such as China and Saudi Arabia must contribute to seeing as the United States already offers some foreign aid during disasters. The fund would actually serve as an accountability mechanism to ensure we’re not the only countries helping out Hopefully it doesn’t prevent all the credits still going to Tom Cruise, though? Sure he had nothing to do with it, but he can’t handle the truth. 

ETHAN: With those concerns cleared up, the big question remaining is how much money does the US contribute? And where do we get the money? The first question is going to be a challenge. The cost of loss and damage for developing countries is projected to reach $400 billion per year by 2030. And that’s a lot of money. That’s at least 399 billion more than Dr. Evil wanted in Austin Powers don’t undervalue yourself Dr. Evil shoot for the stars king. But the way the cop 27 agreement is currently worded, the fund would in all likelihood, not be covering all of that, just the most vulnerable situations. As such, the US will likely work to negotiate a number that satisfies allies protects our economic and national security, but doesn’t turn us into the world sugar daddy.

ETHAN: For where the money comes from, obviously, the federal budget is an option. But there’s other options too. For example, some have proposed putting a windfall tax on fossil fuel companies enormous profits, as big as that 400 billion per year number is it is a mere 10th of the $4 trillion in net income that oil and natural gas producers will see in 2022. There are also options that don’t involve taxes, you know, like arson, and all seriousness, the government could use market incentives to encourage private companies to contribute directly. Ultimately, if Americans can get on the same page about the need to contribute to a loss and damage fund, we can find a fair and bipartisan way to raise the money. Maybe Congress can hold a sexy carwash. I know I’ve always wanted to see a bunch of 90 year olds in bikinis.

ETHAN: So the loss and damage fund is absolutely good news for developing countries. But I don’t want it to get lost that this is also good news for the United States. It’s not some globalist wealth transferring conspiracy. It is an investment in our economic and national security. And just so happens to address a moral issue to.

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ETHAN: This sweaty penguin is presented by peril and promise a public media initiative from the WNET group in New York for reporting on the issues and solutions around climate change. You can learn more at and promise

ETHAN: Welcome back to tip of the iceberg. It’s time for Ask Me Anything where our listeners get a chance to ask me any environmental questions they may have submit questions on our Patreon email or social media patron questions go to the front of the line. So be sure to sign up today at Sweaty penguin. 

ETHAN: So I got another great family question this time from my dad and I wanted to share it with you all. He asked, Does the Lawson damage fund possibly reduce incentives for smaller nations to upgrade to renewables?

ETHAN: Now I understand the argument that it would if they don’t have to pay to clean up climate change, why stop contributing to it? But I don’t think it will have that effect for a few reasons. First, I see it as highly unlikely that the fund covers the entire cost of loss and damage. Like I said, it is projected to be around $400 billion per year in 2030. Even with the establishment of the fund, getting 400 billion a year into it would be a monumental task and developing countries and know that that’s why they’re working on other loss and damage solutions to hopefully the fund can be a big help, but countries will continue facing financial burden due to climate disasters, and beyond that money doesn’t make it better. Rebuilding is obviously important. But these disasters cost lives flattened homes spread diseases destroy what can be sacred or historical land, some nations face the threat of drowning entirely. Even with money on the table, it remains in these country’s best interest to limit climate damage as much as possible. 

ETHAN: Second, the details of the fund are still being negotiated. And I would not be surprised if the European Union and the United States and maybe others refuse to contribute funds to countries that are expanding their fossil fuel infrastructure. Toward the end of cop 27. The EU made a proposal to create a loss and damage fund on the condition that the rest of the world agree to a fossil fuel phase down. Obviously, if you listen to last week’s episode, you know that was unsuccessful, but many countries liked that idea. And I expect to the EU would continue to push for some sort of accountability related to fossil fuels. 

ETHAN: And third, and most importantly, you use the exact right word in the question when you said upgrade to renewables because clean energy is an upgrade. According to the International Renewable Energy Agency 62% of newly installed renewables for power generation are cheaper than the cheapest fossil fuel alternative. Obviously, there are pros and cons to every energy source. And when there’s a global market for oil and gas, it’s tempting to partake, but that market is projected to level off in the near future, whereas the clean energy market is rapidly growing and will in all likelihood continue growing for a long time. I think for that reason alone, it would be silly for countries to ignore clean energy due to the loss and damage fund. It’s not just the climate solution. It’s an economically lucrative investment that brings benefits across the board.

ETHAN: Thank you so much for the question. And thanks to all of you who listened to tip of the iceberg. Take two minutes help out the show and get a shout out at the end of the show by leaving a five star rating and review on Apple or podcast addict or join our penguin. You get merch bonus content and your questions moved to the front of the line for tip of the iceberg. This sweaty penguin is presented by Carolyn’s promise a public media initiative from the WNET group in New York reporting on the issues and solutions around climate change. You can learn more at and promise the opinions expressed in this podcast are those of the hosts and guests. They do not necessarily reflect the opinions or views of peril and promise or the WNET group. Thank you all for listening. And we’ll be back next week with a deep dive on muskoxen.