Photo: Young activists demand a Loss and Damage Fund to compensate developing countries for the impacts of climate change at the COP27 UN Climate Change Conference in Sharm El-Sheikh, Egypt. (Dominika Zarzycka / NurPhoto via Getty Images)
Small island states and developing countries have successfully placed “Loss and Damage” on the COP27 agenda, but pushback from the US and EU will result in more delays to the creation of a dedicated fund to address impacts from climate-related disasters in vulnerable nations.
by Marco Lopez
SHARM EL-SHEIKH, EGYPT, Mon. Nov. 14, 2022
The creation of a climate finance facility to address loss and damage brought on by severe weather that has become more frequent and more forceful as a result of manmade climate change is a key goal for small islands and developing states at this year’s COP27. Those countries have successfully put the issue of loss and damage on the formal agenda of the summit—a step forward in the creation of a new fund focused on compensation for the loss and damage caused by unpredictable and unstoppable catastrophes that are occurring on a more frequent basis across the world.
The United States and European Union (EU), two of the largest traditional greenhouse gas emitters, have, however, pushed for more dialogue without outlining any clear end goal following those discussions. Last year, when COP 26 was held in Glasglow, the two also blocked the proposal to create a dedicated fund for loss and damage and opted for further discussion. The new agenda item has now been agreed upon under certain conditions, with the issues of liability and compensation not being included in the discussion, according to the EU’s chief advisor on international climate relations, Jacob Werksman.
While the EU has welcomed the increased support for addressing the challenge of loss and damage and has said that they are prepared to address the issues with more seriousness, they insisted that the process will not be focused on a single solution—which is largely considered to be the creation of a compensatory facility at this COP. Instead, discussions leading up to 2024 will involve “broad conversations,” Werksman said.
US officials suggested mobilizing funds already given to multilateral banks and facilities such as the Green Climate Fund. Monica Medina, the US Assistant Secretary of State for Oceans and International Environmental and Scientific Affairs, suggested that the focus should be “getting some of that funding to where it’s needed rather than trying to create another fund.”
Loss and Damage, however, refers to the destruction caused by the impacts of anthropogenic climate change that cannot be avoided by either mitigation or adaptation, which is largely the focus area of multilateral banks and funds when allocating climate finance. The irreversible loss and damage caused by historic flooding, unprecedented periods of droughts, storms of record strength, fires, and extreme heat have resulted in the displacement of people and destruction of property, and it is being argued that the onus falls on the richest countries, with the largest share in carbon pollution, to provide finance to help those countries recover from the losses linked to climate change.
But whether this funding will come in the form of a compensatory fund, or be seen as reparation or even as a basis for liability, is yet to be determined. Large emitters have pushed back on the creation of the loss and damage fund with fears that any agreement and payment of funds would amount to an admission of guilt and open the door for legal liability.
Countries on the frontline are experiencing direct impacts and are acutely aware of the need for funds to address the issues of loss and damage, as the traditional loans and grant funding that trickle in following disasters in climate-vulnerable nations become more and more inadequate to execute recovery.