At the COP 27 meeting in Egypt, one issue that draws a line clearly between the ‘rich’ and the ‘poor’ countries is the ‘loss and damage’ compensation argument. The countries that are already suffering from the fallout of climate change are telling those who caused all the pollution that you need to compensate us for the damage that your pollution is causing us now. Pakistan’s President made a forceful argument about this. His country estimates that its recent floods have killed about 1,700 people and caused about $16 billion in damage.

Loss and damage compensation, if agreed to, would be a direct admission by the developed world that we used polluting fossil fuel to grow, continue to use it to run our rich lifestyles, cut down trees blithely in the past, became rich, and now we are telling you not to do the same. But the lifestyle built on all that is already causing damage in over 50 countries like Bangladesh and Vanuatu. Thus, it is different from other funds provided by the developed world towards renewable energy, carbon credit measures, and so on.

When countries fund others for the damage they caused, it is also a direct recognition of our interconnected and globalised world. Even though post-Covid, there is a rethink on supply chains it is still based on globalisation.

100-mile communities

The recently deceased Ela Bhatt, founder of SEWA, in her book Anubandh (2015, Navjivan Publishing) promoted the idea of hundred-mile communities. She argued that within a hundred-mile radius, land, people, culture, climate, market and so on are familiar to us. We should give preference to this hundred-mile community in our activities, the people we hire, and the products we buy and sell. For her, it is a way of thinking about community in all our activities, and this leads to a linked relationship with the world. If we can see the consequences of our actions within the community, that would make us more reluctant to indulge in exploitative activities.

But that does not work, does it? With global trade, we look for the cheapest that would suit our needs and buy it even if the product is being supplied by someone thousands of miles away and perhaps working under prison conditions. All economic theories are built around this consumer who maximises his utility.

That is where we must appreciate that Ms Bhatt’s approach requires thinking at a higher level of ethical awareness that we are not taught in our highly competitive “maximise-your-wealth” mode of behaviour. Her inspiration, Mahatma Gandhi, met the lowest price driven market economy issue head on. He said one should give ‘preference to local manufactures, even if they are of an inferior grade or dearer in price than things manufactured elsewhere.’ This is because local community should take preference over so-called economic utility maximisation. And he said “I should use only things that are made by my immediate neighbours and serve those industries by making them efficient and complete where they might be found wanting.”

Thus, we support the neighbour by buying his product and work with him to improve it. Rather than competition, cooperation leads to efficiencies and improved performance. Of course, Gandhiji’s recommendations did not go far even when he was alive.

But Gandhiji and Bhatt remind us once again of what happens when we do not focus on the local community. The demand for loss and damage compensation is now forcing countries to focus on the damage they are causing to communities that are far away. And the rich world is resisting. This issue is not going to be settled at the COP27 meeting and the irony is that even the vulnerable countries follow the West’s destructive growth model.

The writer is an emeritus professor at Suffolk University, Boston