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Patrick McCarthy headshot

Who Pays For Climate Change? Where Countries Falter, Corporations Fund

climate change refugee miriam who was displaced by floods in northern ethiopia walks to school with unicef backpack

Climate refugee Miriam, whose village was destroyed by flooding in 2022, walks to school in her new home in the Afar region of northern Ethiopia. (Image: ©UNICEF Ethiopia/Raphael Pouget via Flickr)

At the COP27 climate talks in November, world leaders agreed to establish a loss and damage fund to help developing countries cope with the impacts of climate change. But it will be years until the fund is up and running — leaving many questions unanswered, chief among them: Who pays for the climate crisis?  

While the responses to this question often place the financial onus of climate change on the global superpowers (China, the U.S.) that have contributed the most environmental harm, those powerful nations have consistently failed to accept this charge. Nations in the Global South have, by and large, contributed little to climate change, yet face the most serious consequences — including more frequent and severe natural disasters like drought, intense heat, and extreme storms. As the leading contributors to climate change drag their feet, the window for action continues to shrink, and blameless millions pay the price of the Global North’s pollution.

Climate Neutral, a nonprofit dedicated to addressing this disparity, leverages corporate funding to finance sustainable projects in the world's least developed countries. In this way, corporations can circumvent the global gridlock preventing true action on climate change. The nonprofit also provides corporations a chance to move beyond empty promises and truly begin to right their own environmental wrongs.

“The pressure that we're trying to exert is pressure on companies because consumers, at least say, they care about climate change,” said Austin Whitman, CEO of Climate Neutral. “But they have very few ways to engage with companies directly and press companies to do more. So, if we can create the expectation that companies are doing their part to mitigate their emissions, there will be an increase in the flow of capital into projects.”

Climate Neutral challenges corporations to go beyond words and take aggressive action to reduce global emissions by 2030. To earn the nonprofit’s certification, a company must demonstrate that it is taking steps to reduce future emissions, while also paying the full price for current emissions.

Climate Neutral label on tag of Avocado Green Mattress bedding - climate change action from brands
The Climate Neutral Certified label on packaging at partner brand Avocado Green Mattress

Rich nations can "export low-carbon technologies" to decarbonize the developing world 

Rapid industrialization in an under-developed country can create intense environmental harm. But how can a country that already polluted the world through its own industrialization 200 years ago prohibit another nation from doing the same thing today? When it comes to polluting, rich nations are essentially telling poorer nations, “do as I say, not as I do,” and that isn’t very persuasive. 

“There is some transfer of wealth that's necessary to account for the fact that the economic costs are being borne initially, largely, by countries that have not caused the problem,” Whitman said.

For decades, the Global South has called on the North to pay reparations for the crimes of colonialism, which prevented development and stole the natural resources that would have funded such development. If rich nations don’t want poorer nations to develop in an environmentally harmful way, they ought to invest in sustainable infrastructure and practices in these underdeveloped nations.

“All the major sectors, they can be used just as well in India as they can in the U.S.,"  Whitman said as an example. "I think it's our job to export low-carbon technologies to really allow them to skip past that phase where the carbon intensity of the economy grows significantly before it starts to level off and then decline. We've got a pretty impressive system here in the U.S., and that knowledge can be exported, and is being exported.”

Climate Neutral understands that the urgency of the climate crisis demands action, not bureaucracy. Challenging corporations to pay for pollution and invest in the environment may not completely solve the climate crisis, but it is a fantastic way to get powerful players to put their money where their mouth is.

“This is one of the many, many dynamic aspects of the puzzle. We're not starting necessarily in the perfect spot,” Whitman said, “but that doesn't mean that we shouldn't start.”

Image credits: ©UNICEF Ethiopia/Raphael Pouget via Flickr and Climate Neutral

Patrick McCarthy headshot

Patrick is a freelance journalist who writes what the robots can't. Based in Syracuse, New York, Patrick seeks to uplift, inform, and inspire readers with stories centered on environmental activism, social justice, and arts and music. He enjoys collecting books and records, writing prose and poetry, and playing guitar.

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