The Politics of Climate Finance in an Era of Loss and Damage

Summary

Rising temperatures are causing irreversible losses, obliging developed countries to provide climate finance to developing nations under the UNFCCC principle of Common but Differentiated Responsibilities (CBDR-RC). However, the definition of 'climate finance' is disputed. The negotiation of 'loss and damage' finance for unavoidable climate impacts at COP27 intensified this conflict.

This thesis examines the changing politics of climate finance using a critical constructivist lens. It finds that within the UNFCCC, the conceptualization of climate finance is shifting from grants to include instruments like insurance, a move that weakens the CBDR-RC principle. Furthermore, satellite-enabled “radical transparency” is increasingly entangled with parametric insurance. This combination repackages disasters as technical events manageable by algorithms, obscuring their political-economic causes. Consequently, authority over disaster finance is shifting from affected countries to external actors and technology, creating an "insurance imaginary" that depoliticizes historic responsibility for climate change.