Estimations of loss and damage after weather events do not account for non-economic consequences
“For 40 days and 40 nights a biblical flood poured down on us, smashing centuries of weather records, challenging everything we knew about disaster, and how to manage it,” Pakistan Prime Minister Muhammad Shehbaz Sharif told the UN General Assembly on September 23, describing the incessant rainfall the country received throughout the monsoon months from June to September.
In July and August, Pakistan recorded 391 mm rainfall — nearly 190 per cent more than the 30-year average — triggering flash floods and landslides, and inundating one-third of the country.
The southern province of Sindh received 466 per cent more rain than average. “When we have a 100 km lake that has developed in the middle of Pakistan, tell me how big of a drain can I build to manage this? There is no man-made structure that can evacuate this water,” said Pakistan’s foreign minister Bilawal Bhutto-Zardari at a news conference.
Rising waters forced temporary displacement of 7.9 million people, as per a recent report by the UN Office for the Coordination of Humanitarian Affairs (OCHA). The agency said as of October 1, some 1,700 people had died. Over 33 million people — more than the population of Australia — were affected by floods.
Just as the water began to recede in Pakistan, Nigeria too reported one of the worst flooding events it has seen in recent history. Death toll in the West African nation has crossed the 600-mark, the country’s humanitarian affairs ministry tweeted on October 16.
The flood, which has spread across all the 36 states, has affected 2.5 million people and destroyed more than 200,000 homes. Large swathes of farmland have also been destroyed, the ministry said.
Nigeria’s meteorological agency has warned flooding could continue until the end of November in some states. Although the country is used to seasonal flooding, this year has been significantly worse and the government has said unusually heavy rains and climate change are to blame.
An analysis of Down To Earth (DTE) shows that every month of 2022 so far has seen at least one record-breaking disaster and all continents have been affected by such unprecedented extreme weather events.
These have revived calls for climate reparations as climate negotiators prepare for the 27th Conference of the Parties (COP27) to the UN Framework Convention on Climate Change (UNFCCC) in Sharm el-Shaikh, Egypt.
Islamabad, for instance, has put the preliminary estimates for flood-related damage at $30 billion, and its climate minister, Sherry Rehman, is calling not only for immediate aid, but for compensation by rich industrialised countries for the damage caused by their greenhouse gas emissions.
At a high-level event on the sidelines of a UN General Assembly session in September, Zardari highlighted a proposal to include discussions on loss and damage finance in the agenda of COP27. UN Secretary General Antonio Guterres, during his visit to Pakistan earlier that month, also urged governments to discuss loss and damage at COP27 with the seriousness it deserves.
Since the formation of UNFCCC, vulnerable countries have demanded a global agreement on loss and damage with rich nations, which have historically emitted more greenhouse gasses, to pay for destructions caused by climate change impacts. But their proposals have been rebuffed.
Though climate impacts are happening all over the world and are felt by both rich and poor countries, the logic underpinning loss and damage payments by rich countries is straightforward.
The World Weather Attribution (WWA), a global consortium of climate scientists who work to assess the role climate change plays in the intensity of extreme weather events, attributes the excessive monsoon rainfall over Pakistan to global warming, especially for Sindh and Balochistan.
Both the provinces received seven and eight times more rainfall than normal in August; warming made the downpour 75 per cent more intense. This means climate change worsened the flooding in Pakistan despite the fact that the country accounts for 0.7 per cent of global carbon emissions.
By comparison, the US is responsible for 25 per cent of historical emissions (1870-2019), followed by the EU, which accounts for more than 17 per cent of emissions.
These rich polluters are also not anywhere near as vulnerable as developing nations. DTE analysis also shows that in just nine months of 2022, extreme weather events have caused more than 10,000 deaths and affected over 75 million people across the globe. Neither the US nor the EU are part of the 10 worst affected countries, in terms of both population and deaths.
Besides, climate-vulnerable low-income countries lack the safety nets and resources to cope, compared with rich countries. A report by international non-profit Oxfam, “Footing the Bill”, released in September, explains this:
Former German Chancellor Angela Merkel announced a reconstruction fund of €30 billion ($29.5 billion) just weeks after the 2021 summer floods. By contrast, the Pacific island nation of Vanuatu, which is highly vulnerable to extreme weather events, has seen its public debt double in recent years, largely due to rebuilding after cyclone Pam in 2015.
There is enough evidence by now that losses and damages are unavoidable despite collective measures to curb greenhouse gas emissions and building resilience against climate change impacts.
It is therefore critical for countries to include loss and damage in the national climate plans (Nationally Determined Contributions or NDCs) of individual countries to assess the costs of disasters and document responses to address it.
Loss and damage, however, does not feature in the NDC targets of most developing countries. A study by the International Institute for Environment and Development, an independent policy research institute in the UK, released in August 2022, shows that just 10 of 46 least developed countries mention “loss and damage” in their document. Another 35 countries’ Nationally Determined Contributions only make indirect references to loss and damage.
A 2018 estimate by researchers at the Basque Centre for Climate Change, Leioa, Spain, by 2030, shows that the total annual estimate of loss and damage for developing countries could be between $290 billion and $580 billion. Without political intervention, this cost will continue to be borne by populations that emitted the least.
Currently, developing countries deal with climate catastrophes either by paying from their own coffers or in an ad hoc way: by holding emergency appeals for aid. These are highly inadequate to meet the losses and damages, which can be economic as well as non-economic.
The UN, for instance, is coordinating for Pakistan, by asking for $160 million. So far, the US had pledged $30 million, the UK roughly $17.3 million and Canada $3.8 million. World Bank has also assured $2 billion, while Asian Development Bank has promised $2.5 billion to Pakistan.
This is pittance when compared with the Pakistan’s initial estimate of $30 billion — a figure that could rise based on results from rapid needs assessments being led by the government in at least three provinces — Balochistan, Sindh and Khyber Pakhtunkhwa, as per OCHA.
To estimate the costs, countries usually follow two internationally accepted methodologies: rapid needs assessment and, the other being the more detailed post-disaster needs assessments. These are done by the affected countries’ governments, with support from global bodies.
Rapid needs assessments are conducted immediately after a disaster strikes.
“The purpose of the Rapid Needs Assessments is to perform a broad-based assessment that can help governments identify the critical impact and resulting priority needs and interventions in a matter of days instead of conducting a detailed analysis that might take months,” says a 2020 World Bank report. Post-disaster needs assessments, on the other hand, are conducted over a longer period.
The estimates provided by both assessments are often confused with finance for adaptation to future climate events.
In a 2022 discussion paper, a group of global non-profits led by Climate Action Network International, point out that loss and damage finance is “often wrongly conflated with adaptation finance which contributes to minimising L&D [loss and damage], and to some extent mitigation finance which can avert L&D”.
However, the fact is loss and damage compensation should be considered reparation for climate change impacts happening now, rather than to avert future impacts.
Moreover, the current methodology for both assessments, though accepted globally, does not account for the full scale of long-term damages such as displacement and unemployment.
While all climate impacts are a result of historical emissions, fixing accountability of disasters to historic polluters and calculating compensation remains a challenge.
There are also differences in loss and damage between developed and developing countries. In the former, economic losses are more from infrastructural damage and therefore the immediate figures are much higher than in developing countries.
In developing countries, losses are more in terms of human lives and livelihoods, like in Pakistan. In the recent floods, OCHA says, the country lost 1.2 million livestock, while prime minister Sharif has claimed that crops covering 1.6 million hectares have been washed away, leading to massive losses for agriculture.
Developed countries are also better equipped to assess loss and damage. In the EU, for example, continent-wide assessments of loss and damage from past and future events are done by ECHO and the European Environment Agency (EEA).
Wouter Vanneuville, climate change adaptation expert at EEA, tells DTE that loss and damage assessments require multi-decadal datasets of past events, which are only with the insurance industry in the developed countries. In developing countries, it will be difficult for the insurance sector to maintain such datasets as it is not as well entrenched.
In 2018, the World Bank, EU and the UN Development Programme highlighted the challenges in the current post-disaster needs assessment methodologies.
In a report that reviewed assessments being conducted since 2008, the organisations highlight that the current approaches need to be altered to be more suitable for smaller countries, smaller disasters and atypical recovery requirements, and mention the need for greater accountability to affected people and inclusion of the most vulnerable and socially marginalised groups to inform future loss and damage assessments.
A major limitation of current assessments is that they do not take into account losses accruing from large-scale environmental damage and non-economic impacts such as loss of cultures, traditions, languages and even of entire communities, which are irreplaceable and hence extremely difficult to estimate.
They also overlook historical socio-economic vulnerabilities already present in populations. Vanuatu may have made a start in correcting some of the inadequacies.
In 2020, following tropical cyclone Harold, Vanuatu created a new section to calculate the loss and damage to environment in the worst-hit areas. The prime minister’s office engaged with communities and visited key habitats to gauge impacts on forests and marine ecosystems.
It calculated economic effects by estimating the area affected and multiplying this by an economic value, including discounting for future effects. For example, for forests, it considered a value of $5,264 per hectare per year, based on findings of research from 2012.
Similarly, in marine ecosystems, economic value for coral reefs, mangroves and seagrass was considered at $352,915, $193,845 and $28,917, respectively, per hectare per year.
The country concluded that cyclone Harold led to loss and damage of $3.8 billion in the case of forests, and $8.2 billion in the case of marine ecosystems. The country’s official post-disaster needs assessment placed the total economic cost at $617 million, without the environmental damage.
Innovations are also going on to develop mechanisms for addressing loss and damage at the local, national and inter-governmental levels, according to a policy brief on loss and damage prepared by Brussels-based think tank Global Governance Institute in 2017.
At the national level, Bangladesh, under its Climate Change and Strategy and Action Plan, has established two funds to address various climate-related actions, including loss and damage.
In eight years till 2017, the country had allocated $0.5 billion for immediate disaster relief in the two funds and is implementing a national mechanism on loss and damage using these funds.
On the intergovernmental level, the Caribbean region in 2017 established Caribbean Catastrophe Risk Insurance Facility (CCRIF) to deal with loss and damage with help from the World Bank, Japan, EU and Canada.
CCRIF has 19 member countries from the Caribbean region, three from Central America and one electricity utility member. It has paid out 54 insurance claims till date worth $245 million.
There are international proposals for financing loss and damage outside the UNFCCC process such as an International solidarity fund proposed by international non-profit Heinrich Boell Foundation where it plans to bring together public, private and innovative ways of financing loss and damage.
Under this, the non-profit envisages $150 billion coming from developed countries by 2030. It predicts that the public fund would then mobilise additional funding from alternative and innovative sources of up to $150 billion every year.
Some of these alternative and innovative sources could be special drawing rights of the International Monetary Fund, reduction in fossil fuel subsidies by developed countries, financial transactions tax on financial instruments like stocks, bonds climate damages tax, air passenger levy and debt relief.
For other non-economic costs to cultural and social systems, methodologies are yet to be developed globally. But these examples do suggest the approaches that could be followed in future assessments.
(With inputs from Bennett Oghifo in Nigeria, Rivonala Razafison in Madagascar and Charles Mangwiro in Mozambique)
This was first published in the 1-15 November, 2022 edition of Down To Earth
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