What is loss and damage again?
Climate-induced loss and damage refers to the losses and damages that result from climate disasters. Disasters can be “sudden-onset”, such as cyclones in Vanuatu or floods in Australia, or “slow onset”, such as the drought in the Horn of Africa, where countries have experienced four consecutive failed rainy seasons.
There is currently no international funding mechanism for climate-induced loss and damage.
Funding for loss and damage is needed to cover costs to rebuild and recover from climate disasters. This could involve compensating farmers who have no income because their crops have failed or reconstructing homes and even entire cities in the aftermath of a climate disaster.
Pakistan’s devastating floods impacted 33 million people and has caused US$30 billion in damage. The economic costs of loss and damage in developing countries alone could be as high as US$580 billion per year by 2030. Leaving developing countries to pay for these costs alone will push them deeper into poverty and debt, and marginalised groups like women, girls and women with disability will feel the brunt of the impacts.
The scale of the losses and damages being experienced in developing countries are rapidly expanding as global warming increases. Meanwhile, rich and high emitting countries like Australia continue to approve new oil and gas projects and delay climate action. The costs of wealthy countries’ inaction should not be borne by the world’s poorest communities – countries like Australia have a moral obligation to step up and pay up for the climate impacts they have caused.
What are countries saying in the loss and damage negotiations?
Developing countries first called for compensation for loss and damage back in 1991, but rich countries have consistently stalled progress and sidestepped their responsibility to pay for the impacts of their climate inaction.
Now after 30 years of advocacy from developing countries and civil society, loss and damage is finally on the agenda at COP27 and negotiators from developing and developed countries have acknowledged the loss and damage funding gap and the need for new funding to support developing countries to respond to climate-induced disasters.
Developing countries are united in their call for a loss and damage financing facility to be established by the end of this COP. The impacts of climate change are being felt now and there can be no more delay on loss and damage funding. They are also clear that rich countries can’t just recycle old money – international aid and climate change funding for adaptation and mitigation are already falling well short of global need and rich countries’ obligations. For example, Australia is currently providing just one-tenth of its international climate finance fair share. Funding for developing countries to address climate-induced loss and damage must be new and come on top of existing aid and climate finance contributions.
Most rich countries – including the US, UK, Australia, and the EU – have strongly welcomed the discussion on loss and damage, but have stopped short of supporting a dedicated fund for loss and damage. Tried and tested delay tactics are once again on display, as those countries that are most responsible for the climate crisis delay decisive action, by calling for a more specific understanding of how loss and damage occurs and proposing a review of funding sources and bodies outside of the UN.
We have one week left at COP27 and loss and damage will continue to dominate discussions at the conference. It will be a great moral failure on the part of rich countries if we leave the UN Climate Conference without a loss and damage financing facility.