It is different from mitigation and adaptation, and it needs finance
Loss and damage has a specific meaning in climate policy. It deals with unavoidable and irreversible impacts of climate change, where mitigation has failed, and adaptation is not possible.
Six years ago, at COP 19, the ‘Warsaw International Mechanism on Loss and Damage’ (WIM) was set up to “address loss and damage associated with impacts of climate change, including extreme events and slow onset events in developing countries that are particularly vulnerable to the adverse effects of climate change”.
Two years later, in 2015, Article 8 of the Paris Agreement installed loss and damage as a third pillar of climate policy (with mitigation and adaptation being the first two). The Agreement committed parties to “enhance understanding, action and support, including through the Warsaw International Mechanism, as appropriate, on a cooperative and facilitative basis with respect to loss and damage associated with the adverse effects of climate change”.
The key is the commitment to enhance support, which can be interpreted as finance, or technology, or capacity building, but has to involve some material transfer of resources to those who are already being hit by irreversible impacts.
This requirement is most stark in the case of small island states, who are losing their land to the climate crisis, and who were at the forefront of the push for loss and damage to be included in the Agreement. However, the demand for support is much larger than island states — some climate-economy models indicate $1.1-1.7 trillion each year of damage in developing countries by 2050.
When we think of farmers whose crops are destroyed by unseasonal weather, or coastal communities devastated by cyclones of unprecedented intensity, we are (in some part) thinking of climate-induced loss and damage. These losses are somewhat compensated through national funds, and some international aid. To the extent they are caused or worsened by climate change, we need to move beyond this kind of ad hoc compensation, and toward an equitable compensation mechanism, hence the WIM.
However, WIM has no finance arm. This is a result of developed countries’ paranoia that accepting the need for loss and damage finance amounts to an admission of legal liability. To drive home the point, a paragraph on loss and damage was added to the Decision of the Conference of the Parties in Paris stating that “Article 8 of the Agreement [which deals with loss and damage] does not involve or provide a basis for any liability or compensation”.
The legal implications of this sentence are uncertain because it is in the Paris Decision, which accompanied the Paris Agreement, but does not share its legal status. In any case, all the legal hair-splitting in the world will not remove the need to compensate for climate-induced loss and damage.
On December 2, a meeting was held in Madrid to review the performance of WIM. Delegates from particularly vulnerable countries pressed for direct answers: Where was WIM when their country was being torn apart by a climate-exacerbated natural disaster? Why has WIM’s work been so slow? And what is being delivered on finance?
There were no answers forthcoming. As a somewhat conciliatory gesture, some delegates from developed nations suggested that the way forward for WIM would be to develop the scientific basis for loss and damage, by commissioning technical reports or papers.
Delegates from vulnerable countries responded that their previous efforts to include science-based language on loss and damage in past decisions were consistently blocked on political grounds. Even the existing technical papers which have been submitted to WIM (on issues such as climate-induced displacement) have not resulted in any impactful activities in the countries affected.
Some developed country stakeholders have shown signs of taking loss and damage finance seriously — a Resolution by the European Parliament regarding this CoP calls for the EU Commission and Member States to “provide climate finance for loss and damage” and “recognises the need for progress on the issue of loss and damage, for which additional resources should be raised through innovative sources of public finance under the Warsaw International Mechanism”.
The Resolution is not binding. It reflects the position of one of the EU institutions, not necessarily the EU as a whole or its member states. However, it is a significant acknowledgment that compensation for climate impacts is distinct from mitigation and adaptation, and is a necessity in its own right.
The acknowledgement comes not a moment too soon. The frustration among the most vulnerable countries is at a boil; at least one delegate in Madrid referenced the possibility of international litigation, if the Madrid CoP does not deliver agreement on a finance facility for loss and damage.
Some developing country delegates had a different view. They considered that it would be impossible to obtain finance to compensate for loss and damage, but that it might be possible to reach compromise on obtaining finance to prevent loss and damage.
This may look like nuance, but it will, in all likelihood, backfire. Preventing loss and damage is achieved either through mitigation and adaptation. The very fact that loss and damage finance is needed is proof that prevention is not enough. This kind of compromise will play into the worst instincts of those who would look the other way as climate change takes apart communities.
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