As sea levels rise, threatening to displace small island communities, droughts are bringing hunger and poverty to communities across the Sahel. This year’s horrific flooding, wildfires, heatwaves, and unprecedented storms–all exacerbated by climate change–have hit non-industrialized countries the hardest. And yet, these countries have contributed the least to causing these effects. The United Nations’ forty-six “least developed countries” (LDCs) combined contributed just 1.1% of total global carbon dioxide emissions in 2019 On the agenda at COP27 is how to handle this disparity–in both capability and culpability–in funding the response to climate change.
What will it cost to respond to these disasters, prepare for the worsening effects of climate change through adaptation, and curtail future threats through mitigation? In four of the last five years, damage from climate-worsened disasters and storms have cost the United States over $100 billion each year, with this year expected to follow a similar trend. Multiply these numbers on a global scale and the inadequacy of the proposed funding of $100 billion per year promised by industrialized countries to support climate action in all less wealthy countries (non-Annex I Parties) is quickly apparent.
Industrialized countries have failed to meet even this modest target for financing. Current pledges to reduce greenhouse gas emissions are falling short, leaving the world on track to significantly overshoot the target of 1.5°C above pre-industrial temperatures that the Intergovernmental Panel on Climate Change found necessary to avert the worst effects of climate change, including irreversible tipping points.
Indeed, Earth is experiencing its sixth major mass extinction, this time caused by human-induced habitat destruction and climate change. While ecosystems can respond to gradual shifts in the environment, the rapid pace of anthropogenic climate change makes these longer scale processes all but impossible. It is difficult to conceptualize or quantify the current and prospective losses to plants, animals, and microorganisms of all kinds, with the impact of our decisions extending far beyond the fate of the human species. But untold future damage to the Earth’s ecosystems can still be salvaged through climate mitigation and adaptation measures. Each fraction of a degree of warming that can be prevented is a major achievement in the fight to save the planet, but humans must also atone for and recover from the centuries of damage that have already been done through loss and damage funding.
The decisions made at COP27 will determine just how much damage can be avoided, how much money will be spent now, and who will pay for it. Reducing emissions as quickly as possible now will prevent the need for more costly adaptation measures later, as well as the expense of recovering from ever-worsening disasters. Smart adaptation investments now will also yield dividends—in terms of reducing both financial costs and preventing the loss of life and irreparable damage to Earth’s natural environments—in the years to come. If industrialized countries want to avoid ever-growing future bills from the loss and damage wrought by climate change, they will fund serious progress on all of these issues now.
Defining “Loss and Damage”
Climate change represents a wider threat to social, political, and economic systems in the form of “loss and damage,” which Chatham House defines as “the destructive impacts of climate change that cannot be avoided either by mitigation (avoiding and reducing greenhouse gas emissions) or adaptation (adjusting to current and future climate change impacts).”
Article 8 of the Paris Agreement recognizes “the importance of averting, minimizing and addressing loss and damage associated with the adverse effects of climate change, including extreme weather events and slow onset events, and the role of sustainable development in reducing the risk of loss and damage.” However, the UN Framework Convention on Climate Change (UNFCCC, the Parties to which make up the country delegates at each COP or “Conference of the Parties”) has never officially defined “loss and damage” in its lexicon.
When discussed in the context of climate negotiations, loss and damage often refers to the compensation for these destructive impacts. This compensation can then be used for climate mitigation and adaptation or broader support for other economic and social resilience measures. In extreme cases, such as the plight of small island developing states (SIDS) that may face the destruction of their entire territories through sea-level rise and storms, this funding could be used for relocation of the countries’ entire populations.
Loss and damage compensation is also often framed as climate reparations, payments from those countries who have contributed to and benefited the most from climate change (with the resulting wealth that industrialization brought) to those who have contributed, and thus benefited, the least. This lack of definitional precision has also provided cover for inaction.
The Third Rail of Climate Negotiations?
The topic of loss and damage has been framed as the “third pillar” of climate negotiations, but also as its “third rail.” Industrialized countries are hesitant to commit to any measures that would indicate legal or financial liability, as that would risk opening the “floodgates of litigation” and untold future commitments that they are reluctant to undertake. Simultaneously, non-industrialized countries face the most immediate and worst effects of climate change with less financial resources to respond. They also continue to negotiate with industrialized countries on funding for a just transition away from fossil fuels, with regard to how to make economic progress and improve their populations’ well-being without following the path of carbon-driven industrialization that supported the wealth-building of industrialized countries.
The phrase “loss and damage” first officially appeared in a UNFCCC decision text in 2007 following COP13 in Bali. However, little progress was made on the issue for many years thereafter due to intentional obstruction of progress by industrialized countries at numerous points. Countries’ reluctance to highlight and address loss and damage even played a key role in the naming (or lack thereof) of the 2015 Paris Agreement’s articles, which are listed without titles due to contention over the separation of loss and damage into its own article, rather than continuing to include it under the umbrella of adaptation.
Last year’s COP26 in Glasgow featured unprecedented attention on financing for loss and damage, but advocates were dissatisfied with the outcome. The Glasgow Dialogue on Finance for Loss and Damage was downgraded from its initial conception as a “Facility for Financing,” a semantic distinction that will delay any action by at least two years. Delegates also failed to commit to any new funding for loss and damage.
Glasgow’s successes for loss and damage included establishing the functions of the Santiago Network on Loss and Damage, initially approved during COP25 in Madrid, to provide technical support and capacity building to climate-vulnerable countries. Small financing pledges from several industrialized countries and regions were also spurred by the meeting. While mere drops in the bucket, these symbolic gestures can play a role in shaping norms around responsibility, liability, and global solidarity in the future.
The lack of detailed clauses in previous climate agreements and the ambiguous and competing framings on the purpose of loss and damage financing—“one focused on liability and compensation and the other on risk and insurance”—have delayed meaningful action further. The countries with the most to lose are the ones already paying the price for this. The world has lost decades in the fight against climate change due to the manipulation of information by oil and gas companies, and support from industrialized countries who have become wealthy from the exploitation of fossil fuels.
The Case for Climate Justice
Not only are the countries facing the most immediate and severe consequences of climate change responsible for the lowest percent of historic emissions, but their populations are also significantly younger than those in industrialized countries. With 60% of Africa’s population under age twenty-five (born after the ratification of the Kyoto Protocol), they are bearing the brunt of a problem that they had no role in creating nor any opportunity to take part in negotiations to address it.
These countries have also faced physical and economic losses from the effects of climate change. Those advocating for reparations argue that this funding can be the basis for a new global economic system, allowing for sustainable livelihoods that simultaneously support the well-being of the environment. This is a key reason why many argue that carbon capture and other technological solutions cannot be the sole “answer” to the climate crisis, as destruction of habitats, overuse of natural resources, and other human-induced changes to nature have also contributed to the collapse of ecosystems, increase in natural disasters, and spread of global diseases at an unprecedented pace. This is also why a thoughtful consideration of loss and damage underlies the broader understanding of climate change and the world’s responses to it.
These decisions are in industrialized governments’ national interests and will benefit their own economic and security strategies. Countries with the means have long supported others in the face of major national disasters and other recovery efforts, from the Marshall Plan through the 2004 Indian Ocean tsunami to the responses to floods and droughts throughout 2022. In the United States, for example, both Republican and Democratic administrations have sent aid to countries affected by natural disasters as a means of projecting soft power, safeguarding national security interests, and providing humanitarian relief. These “natural” disasters will only become more unnatural as human intervention in the global climate worsens storms and aggravates agricultural unpredictability.
While John Kerry, the U.S. Special Presidential Envoy for Climate, has said that providing $1 trillion in loss and damage funding is a “nonstarter” for any industrialized country, the U.S. Department of Defense has spent approximately eight times as much on conflicts in the Middle East since September 11, 2001. The growing number and severity of climate-induced disasters will increase financial burdens for all states, while amplifying existing problems surrounding hunger, disease, poverty, and migration. Climate justice is thus a strategic, as well as moral, imperative.
The official inclusion of loss and damage on the COP27 agenda this year represents an important, albeit limited, step in addressing these problems. Notably, this is the first time delegates will directly address this issue, underscoring a growing recognition of the need to make amends for climate-induced harm.
The inclusion of loss and damage on the agenda, however, will not necessarily result in climate justice. At Sunday’s opening ceremony, COP27 President and Egypt’s Foreign Minister Sameh Shoukry clarified that the inclusion of loss and damage on this year’s agenda does not involve or implicate any liability or compensation. He further specified that the item includes the Glasgow Dialogue, a process initiated by COP26 “to discuss the arrangements for the funding of activities to avert, minimize and address loss and damage associated with the adverse impacts of climate change,” and will launch a process aiming adopt a final decision no later than 2024. This is two years later than the Alliance of Small Island States (AOSIS) and other vulnerable countries had advocated for the establishment of a Loss and Damage Financing Facility’s architecture and process. U.S. and EU officials, meanwhile, have said they are focused on existing funding mechanisms and financing sources outside of the UNFCCC, rather than the creation of a new fund dedicated to loss and damage.
Each delay costs precious time in stopping the worst effects of climate change, and helping struggling populations prepare for and respond to them. COP27’s diplomats must seriously engage in this year’s loss and damage dialogue to address the disparities in historical responsibility for climate change and in current climatic effects. From the demands of climate-vulnerable countries, to the recommendations of non-governmental organizations and activists, the specific actions necessary to do so have been clearly expressed. Whether industrialized countries are listening remains to be seen, as does how these steps can be implemented in practice. The international community must seize this moment to urgently expand mitigation and adaptation measures, while meaningfully addressing loss and damage issues. The world does not have time to wait.