The inclusion of ‘loss and damage’ on the agenda at COP27 could become the litmus test for the success of the conference as the concept compels rich nations to pay compensation to vulnerable states hit by disasters connected with climate change largely caused by them.
COP19 established the Warsaw International Mechanism for Loss and Damage but this is the first time ever in the UN climate negotiations that loss and damage finance has made it into the agenda.
Small island nations as well as African countries who have been raising this issue for over three decades would count it a win that it made the agenda at all.
“We must acknowledge a harsh truth, there is no adapting to a growing number of catastrophes causing enormous suffering around the world,” said Antonio Gutteress, secretary-general of the United Nations. “The deadly impacts of climate change are here and now. Loss and damage can no longer be swept under the rug.”
Directly related to climate justice, the concept of paying compensation to developing countries by rich nations for industrial activities that have depleted the ozone layer and increased greenhouse emissions has rankled rich nations to no end.
Rich nations who made pledges to increase financing for adaptation by contributing $100 billion yearly to a common fund have largely reneged. Since 2020, when the agreement was reached, only about a quarter of the sum has been raised. Russian aggression has roiled oil markets and kicked energy security on the priority list of rich countries, displacing climate concerns.
The bulk of climate funding so far has gone to cutting carbon dioxide emissions in an effort to curb climate change, while about a third of it has gone toward projects to help communities adapt to future impacts, otherwise known as mitigation.
Rather than mitigation, loss and damage funding goes directly to compensating costs that countries can’t avoid or “adapt” to.
However, there is no agreement yet over what should count as “loss and damage” in climate disasters. Loss and damage arising from the adverse effects of climate change can include those related to extreme weather events but also slow onset events, such as sea level rise, increasing temperatures, ocean acidification, glacial retreat and related impacts, salinization, land and forest degradation, loss of biodiversity and desertification says the United Nations.
Some of the losses are easily determined but most are hard to value including disruptions to natural ecosystems. This would form the critical component of the negotiations at COP27.
Putting it on the agenda is a crucial prerequisite for making progress on addressing loss and damage, which will be the most consequential negotiation topic at the UN climate talks. A verbal statement that will accompany the agenda item notes that the process should conclude within two years and does not involve liability and compensation.
“At long last, providing funding to address losses and damages from climate impacts is on the agenda of the UN climate negotiations. With climate impacts devastating communities all around us, the international community can no longer avert its eyes from the deadly and costly consequences of a warming world,” said Ani Dasgupta, president and CEO of World Resources Institute, a global research firm.
Dasgupta said vulnerable nations have tirelessly appealed for help to cope with the alarming and damaging climate impacts that they hold little responsibility for causing. She said countries have now cleared an historic first hurdle toward acknowledging and answering the call for financing to address increasingly severe losses and damages.
She said: “It is encouraging that countries agreed to a verbal statement that notes this process will reach a conclusive decision on funding arrangements within two years. Now negotiators need to set clear markers to ensure this process moves quickly, ideally concluding by next year given the urgency of the crisis.
“Of course, getting funding to address loss and damage on the agenda is only the first step. We still have a marathon ahead of us before countries iron out a formal decision on this central issue for CO27. It is critical that all countries work together in good faith to get this done.”
