Loss and Damage: Now or Never

By Joy Reyes, Aya de Leon, and Niner Guiao

With the 27th Conference of Parties (COP) of the UN Framework Convention on Climate Change (UNFCCC) mere days away, it’s all systems go for developing countries and NGOs, who are waiting to see if this is the COP when actual, concrete action is made with regard to Loss and Damage (L&D) – and in particular, Loss and Damage finance. During a recent webinar, Prof. Saleem Huq, Executive Director of the International Centre for Climate Change and Development in Bangladesh, and an authority on Loss and Damage in the international negotiations, said in no uncertain terms that if L&D, and L&D finance, are not included in the COP27 agenda, the COP can be considered a failure before it even begins.

Why Loss and Damage financing matters

Loss and Damage financing matters simply – and precisely – because it is urgent. As of the time of this writing, Pakistan is still reeling from the effects of flooding that ravaged the country, leaving a third of its inhabitants underwater. These effects are exacerbated by the climate crisis, and are understood to continue if efforts to limit temperature rise are not taken seriously. Everywhere else in the world, myriad climate-related effects are witnessed, and these adverse impacts are starting to be felt by developed countries as well. China is facing an unprecedented heatwave, as did France and the United Kingdom at the height of the summer season; wildfires have been increasing in frequency across the western region of the United States; earlier this year, Brisbane in Australia experienced unprecedented flooding, which devastated thousands of homes. Since 2020, Australia has also experienced record-breaking flood events and bushfires that have claimed hundreds of lives.

Developing countries, undeniably, are most affected by an increasingly warming world. In addition to extreme weather events such as more frequent and intense typhoons, floods, and droughts, these countries – especially small island states – are also preparing for slow-onset events: sea-level rise, land subsidence, potential displacement, and resource insecurity, to name a few.

These realities drive home not only the need to support countries in responding to losses and damages, but also for a dedicated Loss and Damage financing facility. Defined under the Paris Agreement as the adverse impacts associated with slow-onset and extreme weather events, and considered in general as those climate impacts that communities and countries can no longer adapt to, losses and damages, of various types and degrees, are being felt everywhere in the world. There is therefore a clear necessity for talking about Loss and Damage financing, to underscore the fact that these losses and damages are happening right now, as well as to ensure that financial and other support are delivered to where they are needed the most.

Discussions at the international level

In an effort to move forward the discussions on Loss and Damage financing in the international negotiations, COP26 established the Glasgow Dialogue among Parties, relevant organizations and stakeholders to discuss arrangements for the funding of activities to avert, minimize and address loss and damage associated with the adverse impacts of climate change. The first session of the Dialogue was held in Bonn, Germany, during the meetings of the Subsidiary Bodies of the Convention in June 2022, and will run yearly until June 2024.

While the discussions are a good first step, many countries and organizations from the Global South think that a dialogue over a three-year period is remarkably insufficient in view of the urgency of the climate crisis. Developing countries are concerned that their push for the creation of a dedicated fund resulted instead in more talks, which criticism already embodies the climate negotiations as a whole, and that a prolonged discussion, with no assurance of  a concrete outcome, is too little and too late for those in urgent need of assistance.

At the dialogue in June, developing countries highlighted just why financing for Loss and Damage should be given more attention and space in the negotiations, and made the following calls: that the fund should not be loan-based, that the fund should make loss and damage finance additional to existing funding mechanisms for adaptation and mitigation, and that the fund should put at the forefront justice and human rights.

COP27 in Sharm El-Sheikh, therefore, will be critical for the discussion on Loss and Damage finance. Already, low-lying islands in the Pacific are stepping up their asks and demanding for nothing less than the creation of a loss and damage finance facility. UN Secretary General António Guterres also said that the world is in a life-or-death struggle for survival, and that “[f]ailure to act on loss and damage will lead to more loss and trust and more climate change.” The COP Presidency has already said that it is committed to move forward with this pressing issue and has already appointed ministers to facilitate discussions on this matter at COP27. While developing countries are hopeful that an agenda item on an L&D finance facility will be agreed, they also remain wary, and understandably so; after all, pushback is expected from the United States and the European Union.

Regardless, it will be interesting to see how governments will arrive at decisions this COP27, and whether this is the year that countries will finally put Loss and Damage high up in the agenda. In the face of other geopolitical issues, particularly the Russia-Ukraine war, the energy crisis, and global economic concerns, all eyes will be on governments and what they will do to avert the worst of the climate crisis.

Local calls

The Manila Observatory and Parabukas are in solidarity with countries, organizations, and individuals who are calling for the inclusion of Loss and Damage finance in the agenda. The Philippines is one of the countries most affected by rising global temperatures, as has been evinced by the increasing number of extreme weather events it has faced in the last 5 years, including destructive typhoons (such as Typhoon Ulysses (Vamco) in 2020, Supertyphoon Odette (Rai) in 2021, and Supertyphoon Karding (Noru) in 2022), intense drought, and extreme rainfall.

We are also one with those calling for the creation of a Loss and Damage finance facility. And while we are open to discussions on what this facility might look like, we echo existing demands that the facility should not be loan-based, should be in addition to existing funding mechanisms for adaptation and mitigation (as loss and damage is a separate issue altogether, and requires separate financing streams), and should put justice and human rights front and center. Moreover, the financing facility should be easily accessible to communities, especially those who live in far-flung areas, should be immediately obtainable, and should not impose additional burdens and barriers to access.

Two years into this critical decade for climate, and in the face of increasing adverse climate events, Loss and Damage should be a key priority for governments at COP27.

Joy Reyes is a legal and policy research associate at the Manila Observatory’s Klima Laboratory.

Aya de Leon and Niner Guiao are the co-founders of Parabukas Inc.
Parabukas envisions a world filled with societies that possess an earnest appreciation of the causes and impacts of climate change and environmental degradation – one where communities take concerted action to prevent and address these impacts, moving towards more sustainable development.

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