Pakistan Flooding’s Financial Cost Raises Tough Questions

decade ago, Pakistan’s worst floods on record destroyed a bridge over the Swat river in Madyan, a hilly tourist town in the North. They decided to improve the town’s resilience when they set out to rebuild. They built the bridge 16 feet higher than it was before. However, after seven weeks in a monsoon season unprecedented to Pakistan’s Pakistani Monsoon, the bridge nearly went under water on Aug. 26. Social media videos showed rivers crashing at the bridge’s surface.

Pakistan’s downpours have flooded a third of the country, according to officials, affecting 33 million people, and killing at least 1,100. Last week, the country’s climate minister told Reuters her people were facing “a climate-induced humanitarian disaster of epic proportions.”

Madyan’s waterway, which was a short distance from the bridge, could have serious damages. It has been reopened since then. However, this narrow escape is indicative of a grave problem facing Pakistan and other emerging countries. The governments of Pakistan and other developing countries are racing to be prepared for climate change. But with limited cash, little access to scientific modeling, and agricultural economies vulnerable to weather shocks, it’s a race many poorer nations are losing.

The financial cost of Pakistan’s floods is staggering. The country’s planning minister puts it at some $10 billion—almost 4% of the country’s GDP. Afia Salam is a journalist and environmental activist from Karachi. She says more than 700,000 houses have been damaged and vast swathes will remain unusable for several months. “We are an agricultural country, and there will be no land to cultivate,” she says. It means millions in lost revenue from crops and the risk of serious food shortages.

Among climate experts and policymakers, such costs are known as “loss and damage”—the toll incurred from impacts you can’t avoid, because they’re too extreme, or because you don’t have the capacity to adapt to them. Many countries have to respond to climate disasters on an individual basis. This includes holding urgent appeals for assistance, such as the U.N.’s one for Pakistan asking for $160million. Canada has set aside $3.8million, while the U.K. pledged $17.3 million. The U.S. has already committed $30 million. Those funds will go mainly to short-term relief efforts, not to compensate Pakistan’s long-term costs.

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Pakistan is responsible for 0.7% global carbon emissions, but the country consistently ranks among the 10 most affected by the effects. On Monday, the country’s foreign minister blamed climate change on the “irresponsible development of the developed world.”

For decades, developing countries have argued that wealthy countries, which have historically emitted more greenhouse gasses, shouldn’t just be making haphazard charitable donations. Instead, many say they should make mandatory contributions to a fund to compensate poorer countries for loss and damage—also known as climate reparations.

So far, that fund hasn’t materialized. At last year’s U.N. climate summit, delegates agreed to recognize the term “loss and damage” in the final communiqué for the first time. Scotland was host of the U.N. climate summit. They pledged $2.3 million to compensate for losses and damages. The U.S., Australia and other rich countries did not want to discuss the possibility of a new funding system as part of their official negotiations. This could be because they were concerned about what it would mean for their legal liability.

But as these kinds of disasters become more frequent, the compensation issue isn’t going away. And it will be a major point of contention at this November’s U.N. conference in Egypt—the first to be held outside of Europe in six years—, Salam says. “Nobody wants to foot the bill. Everyone is unwilling to accept responsibility for the climate crisis. And the Global South is feeling resentful.”

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