Loss and Damage: the third controversial agenda item on the list
Written by Yuv Sungkur
Developing countries have been advocating for concrete action around Loss & Damage (L&D) for years. But what is it really, and why is L&D so cherished by vulnerable nations like small island nations?
Taken from World War Zero
What is Loss and Damage
According to the United Nations, the term “loss and damage” refers to the permanent loss or repairable damage caused by climate change, including both severe weather events like cyclones or droughts and slow-onset events, such as sea level rise and desertification. It can also refer to economic or noneconomic harm, such as loss of life, livelihoods, or cultural heritage.
The fight of small island nations
For a long time, the thematic has been omitted by climate negotiators, mainly because of the focus on mitigation and adaptation. But as time passes, an increasing number of vulnerable states, majoritarily small island nations, are starting to feel the effects of climate change beyond adaptation measures.
For example, in 2017, Hurricane Maria resulted in damages of more than 225% of the annual GDP of Dominica. Another striking country-specific example would be Vanuatu, which lost 64% of its GDP in 2015 after a single cyclone caused approximately 450 million USD of economic loss .
As voiced by PM Browne, the topic of 'Loss and Damage' has been embedded in AOSIS's demands since the creation of the Alliance. In his words, "trust has been eroded, and islands can no longer afford to be naïve – loss and damage must have real teeth to force restitution". As a result, the AOSIS' demands regarding this topic are clear and ambitious. Indeed, the AOSIS called for direct attention to the topic at this COP and pushed for loss and damage to be seen as a separate issue rather than a consequence of adaptation.
To materialize this thought, the Alliance of Small Island States (AOSIS) pushed for establishing a Committee to undertake the work to adopt terms of reference for a Loss and Damage Finance Facility. Financially, the Alliance demanded separate and additional support for the annual USD 100 billion pledge for loss and damage response and the clear outline of loss and damage finance on the new collective finance goal. Finally, the AOSIS strongly supports the Santiago Network on Loss and Damage (SNLD). The Alliance reiterated during COP26 the importance of the network to provide technical assistance for developing countries. As PM Browne stated during his statement at the closing ceremony:
“When the few hectares of an island’s arable land are lost to seawater intrusion, imported food now costs five times as much; what next? When a hurricane destroys hospitals and schools, what next? [...] When elephants fight, it is the grass that gets trampled”
COP27 and the creation of the Loss & Damage Fund
After years of advocacy, countries agreed to establish a Loss and Damage fund at COP27, in Sharm-el-Sheik.
One needs to understand two aspects of the Loss and Damage Fund.
Firstly, it is not because governments agreed to gather some money that it is already here. A committee - called the Transitional Committee for the Loss and Damage Fund - has been created to work out the details and operationalize this fund. The committee comprises 24 members - of which 14 are from developing countries and 10 from developed countries. The Transitional Committee will need to think about how the funds will flow for both slow onset climatic processes like sea level rise and extreme weather events like storms and droughts. The Committee will report to this year's COP28 in Dubai on fund operationalizing.
Secondly, money is worthless if there are no rules on how to use it. This is where the Santiago Network comes along. It is a set of rules that will tell us how to use the financial facility. The Santiago Network aims to provide reliable support for the most vulnerable countries while empowering the frontline communities affected by loss and damage. The good news is that COP27 negotiators agreed upon the mechanisms to operationalize the network. The bad news is that little finance has been committed to support the operation.
There is still room for improvement…
Unfortunately, a regrettable aspect is that COP27 failed to deliver on implementing Loss and Damage as a separate element within the new collective oal on climate finance.
The 100 billion USD promise of developed countries to developing countries does not encompass loss and damage, it only considers adaptation (adapting to the consequences of climate change) and mitigation (reducing the effects of climate change). Developing countries made it clear from the start that they wanted the new climate finance goal to include this third pillar of loss and damage into the new climate finance goal. Having this new pillar would ensure that any financial commitments to handle loss and damage are aligned with the UNFCCC principles of equity, the historical responsibilities of developed countries, and the common but differentiated responsibilities of all nations (CBDR). In other words, implementing Loss and Damage as a separate element within the new collective goal on climate finance ensures that the topic is automatically considered when discussing climate finance.
However, developed countries refused, and vigorously opposed any efforts to expand the mandate of the new climate finance goal beyond adaptation and mitigation. Because of this opposition, no decisions on the scale, scope, quality, and access to the Loss and Damage Fund were made.
