Abstract
Human-induced climate change has had extensive adverse effects and linked losses and damages to nature and people. Accordingly, loss and damage refer to the effects of climate change that people cannot adapt to. Along with mitigation and adaptation, loss and damage have developed over the past ten years to become what is sometimes referred to as the third pillar of the United Nations Framework Convention on Climate Change (UNFCCC) However, there has been some debate around this progression, and finance for resolving loss and damage has been at the heart of the debate. The Warsaw International Mechanism (WIM) - which was created at COP19 to carry out the duties of the Convention - has paid little attention to the support for addressing current loss and damage, which gravely affects small island developing states (SIDS) and least developed countries (LDCs). During the 26th Conference of Parties (COP26), the evaluation of the WIM at COP25 resulted in the establishment of the Santiago Network on avoiding, minimizing, and resolving loss and damage. However, the conference produced no additional funds for loss and damage, postponing the decision to COP27. As a matter of fact, the 27th Conference of the Parties in Sharm el-Sheikh ended with a "historic" agreement: a global fund for "loss and damage". The establishment of a Fund for Losses and Damages will be operational by COP28. Despite the challenges and constrained time frame, the Fund is now in place, and there will be no going back.
Author: Klarisa Stafa (Junior Researcher),
Mondo Internazionale, G.E.O. - Environment
- Introduction: What is Loss and Damage?
Loss and damage (L&D) does not have an official definition within the United Nations Framework Convention on Climate Change (UNFCCC), but it is a term often used in UN climate negotiations. The term appeared for the first time in 2018 in a report by the Intergovernmental Panel on Climate Change (IPCC), which is the UN's scientific body on climate change. In the report entitled "Global Warming of 1. 5°C," the IPCC has made a glossary distinguish between "Loss and Damage" (in capital letters) - "to refer to the policy debate within the UNFCCC - and "loss and damage" (in lowercase letters) "to refer generally to damage due to (observed) impacts and (expected) risks." (IPCC).
Conceptually, loss and damage refers to the effects of climate change that people cannot adapt to or when options are available but a community lacks the resources to employ them (Bhandari et al., 2022). Human-induced climate change has had extensive adverse effects and linked losses and damages to nature and people. The negative impacts of climate change can be caused by the so-called “rapid onset events”and the "slow onset events" (IPCC). Rapid onset events refer to droughts, heat waves, storm surges (combined action of wind, atmospheric pressure, and waves), tropical cyclones, and floods (IPCC). Slow onset events refer to the risks and impacts associated with: increasing temperatures; desertification; loss of biodiversity; land and forest degradation; glacial retreat and related impacts; ocean acidification; sea level rise; and salinization (UNFCCC). These effects cannot be either mitigated (avoided and reduced by lowering greenhouse gas emissions) or adapted to (adjusting to current and future climate change impacts). Small Island Developing States (SIDS) and Least Developed Countries (LDCs) are particularly affected by Loss and Damage. Indeed, although specific development and adaptation initiatives have reduced vulnerability, the increased frequency of weather and climatic extremes has had some lasting effects since it has stretched the capacity of natural and human systems to adjust and adapt. (UNFCCC). The IPCC has acknowledged that even if mitigation and adaptation can limit warming to 1.5 °C, there will still be inevitable losses and damages that will be more severe for vulnerable individuals, communities, and states, the majority of which are in the global South (L&D collaboration).
When discussing loss and damage that has already occurred or could occur in the future, a distinction is also made between economic losses that can be quantified monetarily (for instance, the loss of goods and services that can be priced, such as real estate, vehicles, and possessions), and non-economic loss and damage (NELD), which cannot be quantified (such as loss of health, territory, cultural heritage, place-sense, identity, indigenous and local knowledge and biodiversity)(L&D collaboration).
1.1. The history of Loss and Damage under the UNFCCC
The lack of an official definition is due to the political controversies that have characterised the L&D debate since its inception in the early 1990s. In 1992, The Republic of Vanuatu, speaking on behalf of the Alliance of Small Island States (AOSIS), had called for an international insurance fund to compensate vulnerable small island countries and developing countries with areas below sea level from the impacts caused by sea level rise. Afterwards, Loss and Damage was mentioned in the 2007 Bali Action Plan, the "formally- negotiated UN text".. Since then, the AOSIS has repeatedly demanded the creation of a mechanism to compensate countries harmed by sea level rise (Brot et al., 2019). Subsequently,a framework for loss and damage was created at COP16 in 2010 as part of the Subsidiary Body on Implementation (SBI) Work Programme. The SBI Work Programme had two objectives: strengthen international cooperation and consider approaches to address loss and damage in developing countries that are particularly vulnerable (UNFCCC). Establishing the Warsaw International Mechanism (WIM) for Loss and Damage in 2013 at COP19 in Warsaw was then unquestionably a significant turning point for the loss and damage concept. The WIM has three goals: to increase awareness and comprehension of risk management approaches; to improve communication, and coordination, among pertinent stakeholders; and, finally, to increase action and support, including financial, technological, and capacity-building resources. In 2015, at COP 21, Loss and Damage was given an article (article 8) in the Paris Agreement. In addition to mitigation and adaptation, this raised Loss and Damage to the "third pillar" of climate policy under the UNFCCC (L&D collaboration). Although everyone agrees that the inclusion of the L&D article in the Paris Agreement was a significant evolution of the concept, there has since been significant criticism of Article 8. First off, the financial component of the L&D concept was yet to be specified by either the Paris Agreement or the WIM. This results from industrialised countries' reluctance to assign a monetary value to the concept. It is also partially due to disagreements over who would be responsible for financing: Global North - developed countries - or Global South - developing countries?.
- COP26: a few step forward
Finance for loss and damage was a crucial concern at the 26th Conference of Parties (COP26) in Glasgow in 2021. Developing countries urged that the WIM be enhanced during COP25 to allow it to improve action and assistance and deliver it to where it is most needed in vulnerable developing countries (Schalatek & Roberts, 2021). The evaluation of the WIM at COP25 resulted in the establishment of the Santiago Network on avoiding, minimizing, and resolving loss and damage (SNLD). The SNLD's mandate was established to facilitate the technical support of pertinent organizations, bodies, networks, and experts for implementing pertinent approaches at all levels in vulnerable developing countries. However, its responsibilities and operating procedures were not, leaving open the question of what the SNLD would do and how (Schalatek & Roberts, 2021). Following a call for a "Glasgow Climate Emergency Agreement'' made by Bangladeshi Prime Minister Sheikh Hasina, a group of more than 50 of the world's most vulnerable states jointly proposed the establishment of the Glasgow Facility for Financing Loss and Damage (Huq, 2022). However, after two weeks of protracted discussions, industrialized countries led by the United States disregarded these requests. Instead, they insisted that the resulting agreement be known as the "Glasgow Climate Agreement," excluding "emergency." As a result, a Glasgow Dialogue on Finance for Loss and Damage was substituted for the Glasgow Facility for Financing Loss and Damage, which would have postponed any action.
Additionally, the conference produced no additional funds for loss and damage (Huq, 2022). The main problem continues to be about who should be responsible for financing the fund. Developing countries argue that it should be the industrialized countries that should pay since they are, to a large extent, primarily responsible for climate change.
- What happened in COP27?
This section does not contain bibliographic sources because it is the result of the author's (Klarisa Stafa) presence at the COP27 negotiations
The 27th Conference of the Parties in Sharm el-Sheikh ended late in the morning after hours of overnight negotiations. The Developing states celebrated on Sunday morning as climate discussions came to an "historic" agreement on their most important climate goal: a global fund for "loss and damage." that would provide financial aid to underdeveloped countries affected by climate disaster. This agreement on the Fund was unexpected for several reasons. First, COP27 was thought to be a "transitional" conference in a particularly fragile political and geopolitical context after two years of the pandemic and the war in Ukraine (with consequent energy crisis). Second, despite the premises and promises made at COP26, the first two weeks of negotiations advanced slowly about the creation of the Fund, with no particular concrete results until the very end of the summit.
At the opening of the conference, for the first time, all countries agreed to discuss "funding arrangements" for loss and damage on the official agenda. During the "Opening Statemets", on behalf of G-77 + China, Pakistan argued that addressing loss and damage "is not charity; it is climate justice,". Pakistan outlined several priorities, such as understanding the institutional framework and operational modalities for loss and damage assistance, fulfilling the USD 100 billion pledge to restore trust, progressing with the goal on climate finance, and the Global Goal on Adaptation (GGA). Discussions continued throughout the two weeks, with countries such developing countries pressing ever harder for the creation of the Fund and others, such as the United States, trying to put the brakes on the process. On Thursday, November 17, the first extended draft of the so-called cover decision circulated. Climate finance is discussed extensively in the draft, although the most sensitive COP27 decisions still needed to be taken. Indeed, the text was full of the so-called placeholders, where decisions were to be inserted. Loss and damage issues appear in the draft decision's financial section. Loss and damage appear to have their separate paragraph in the final judgment. Despite the lack of concrete choices on this matter, the COP "emphasizes" the significance of financial support under the Paris Agreement for the three strands of mitigation, adaptation, and loss and damage in the draft's financial section. These steps forward on the finance issue and Loss and Damage continued as early as the second draft decision circulated on Friday, November 19, after intense negotiations until 3 a.m. It was affirmed that the COP decision would reflect a "broad global consensus on the serious situation regarding loss and damage and the need for financial instruments," a relatively strong wording considering that the topic has been treated with inadequacy for nearly 30 years. At the dawn of the second draft, it was still too early to have any certainty about the final outcome on Loss and Damage, but the wording of the paragraphs hinted at some concession to emerging country requests - at least in words. Words turned into deeds when on November 20, the decision to create the Fund on Loss and Damage was taken. The creation of a Fund for Losses and Damages under the Paris Agreement is established to be operational by COP28 with the help of a Transition Committee composed of a majority (14 out of 24) members from the Global South.
The Committee will be tasked with setting up the work to create a taxonomy of Compensable Losses and Damages. Arduous task and a tight timetable, but the Fund is now there, and there will be no turning back. In addition to mitigation and adaptation, a third pillar is added to the Paris Agreement. Among the "challenges" consequent to Losses and Damages to be responded to collectively is included migration. The two-week conference in Sharm El-Sheikh, which extended more than 36 hours over its "official" conclusion on Friday night, was characterized by a pronounced divide and acrimonious exchanges between the Global North and the Global South. Many believed that the accord fell far short on crucial topics. Vice-President of the European Commission Frans Timmermans remarked on the complex negotiations and emphasized that "too many parties are not prepared to make additional strides today in the struggle against the climate issue."
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