- Vulnerable communities in the least developed countries, small island nations and developing countries, increasingly face climate impacts that are too severe to adapt to. They are now demanding a separate financial facility to meet the loss and damage caused by climate change.
- The ambiguity surrounding what disasters can be linked to climate change intensified by historical emissions and who pays for it, has been a reason cited by industrialised nations for the delay in response.
- The progress in establishing a Loss and Damage Finance Facility (LDFF) has been slow over the years, but experts say that the UNFCCC COP27 this year might be different, as the Glasgow Dialogue has initiated important conversations on loss and damage.
“With the increase in frequency and intensity of cyclones, and the seas getting rougher, the fishing time has reduced, thereby reducing profits,” says Pradip Chatterjee, national convenor of the National Platform for Small Scale Fish Workers. He is talking about the challenges faced by the coastal communities in West Bengal, who fish from the Bay of Bengal.
“Nowadays, the species usually present in a particular area of the sea, are also changing due to increasing cyclones, which is altering our fishing practices. The traditional knowledge is getting lost. And we can’t even dry the fish by the beach anymore, with unpredictable weather and erosion. The fish rots if it can’t be dried. It’s getting increasingly difficult for the communities to stay on the coast,” he continues.
In the year 2022 alone, India has faced extreme heatwave, unprecedented floods and excess and unprecedented rainfall. These extreme weather events led to deaths, huge economic losses, health impacts, impact on food and water security. Slow onset events like sea-level rise, coastal erosion and glacier melting have led to temporary and permanent relocation for several communities, loss of biodiversity and loss of livelihoods.
In different parts of the world the extreme weather events, over the last year, have put a spotlight on the economic and non-economic losses intensified due to climate change. However, for the small island developing nations, the Least Developed Countries and other vulnerable nations, the losses and damages occurred have been reported to be far more than the industrialised nations, due to the disproportionate impacts of climate change.
In this scenario, there has been advocacy for strong action to address loss and damage where vulnerable nations are demanding the industrialised nations to provide financial compensation by establishing a separate Loss and Damage Finance Facility (LDFF), which would be used to manage the losses that go beyond ‘adaptation’. Countries have already acknowledged the significance of “averting, minimizing and addressing” loss and damage as part of the Paris Agreement, the legally binding treaty on climate change adopted in 2015. Additionally, the rise in weather and climate extremes has led to some irreversible impacts as natural and human systems are pushed beyond their ability to ‘adapt’, noted the IPCC Assessment Report 6, released earlier this year.
Detailing the need for a Loss and Damage Finance Facility (LDFF), Harjeet Singh, Head of Global Political Strategy, Climate Action Network International, shares, “The UNFCCC has an important role to play in the finance for L&D. Vulnerable communities are suffering because of the historical pollution – this becomes an issue of climate justice, which is why historical emitters need to fund the LDFF. The humanitarian aid that developing and vulnerable countries receive is not enough, as it is inadequate and is not based on an obligation. If the fund comes through a United Nations framework, every vulnerable country will be prioritised without bias. Therefore, L&D should be an important agenda point at the COP negotiations.”
Singh is also the co-author of a discussion paper titled, The Loss and Damage Finance Facility – Why and How. This paper cites the Global Assessment Report on Disaster Risk Reduction, and notes that the report warns of a projected increase in disasters, from 400 in 2015 to 560 per year by 2030. The dollar value economic loss associated with geophysical, climate and weather-related disasters averaged approximately US$170 billion per year between 2010 and 2020 with economic losses predominantly from climate and weather events. The discussion paper also states that without an LDFF, the global economy will be affected, trust in global solidarity will erode and climate action for mitigation and adaptation would get delayed.
The need for an institutional response for Loss and Damage
An important fund established within the framework of the UNFCCC, is the Green Climate Fund (GCF). It was created to support the efforts of developing countries, meet the challenges of climate change. However, there are complaints about delays in disbursement of funds for urgent issues. The projects dashboard of the GCF website says that out of the committed $10.8 billion, only $2.7 billion has been disbursed. Whether the urgent funds needed specifically to meet loss and damage arising from extreme events, can be met by the GCF, is still uncertain.
India specifically, has the National Adaptation Fund for Climate Change (NAFCC), to meet the cost of adaptation to climate change. The projects sanctioned under the NAFCC, address many ‘mitigation’ and ‘adaptation’ challenges. However, these also don’t address the need for funds in case of events that go beyond the scope of adaptation.
Taking the example of the fishing communities in Odisha, a coastal state in eastern India, environmental activist Ranjan K. Panda outlines the impact of climate change beyond what people can adapt to, saying, “In Odisha, there is already a relocation colony created by the government for the people who had to permanently relocate, due to sea-level rise. The cost for this is borne by the government. There’s also temporary relocation done annually when cyclones affect some villages. And in this case also, the infrastructure damaged, must be restored by the government.”
“Apart from this, the sea is also eroding the beaches and the water is entering coastal villages, due to which the communities move further inwards. Governments are doing what they can with the limited, allocated budgets to handle relocation and restoring the infrastructure. But the vulnerable communities deserve a defined finance mechanism to deal with such disasters intensified by climate change. If there is a separate Loss and Damage finance mechanism, the management of losses that go beyond ‘adaptation’, would be easier,” he adds.
The progress has remained slow
Years after the first conversation about addressing Loss and Damage began in 1992, with the island nation Vanuatu, spearheading the theme, the progress has remained slow. Action on the theme has become tangible only last year, in COP26 at Glasgow, with the establishment of the Glasgow Dialogue. This enables conversation among Parties, relevant organisations and stakeholders to discuss the arrangements for the funding of loss and damage.
“Glasgow’s announcement regarding a loss and damage facility, sparked the interest of philanthropies that immediately offered to contribute an aligned kick-start finance of three million USD, if the facility is agreed. It was a very important gesture for Scotland to recognise the significance of an LDFF. However, loss and damage should become the most urgent part of the negotiations, as the effects of climate change are explicitly visible on vulnerable communities like small island nations and urgent action is needed,” stressed Ulka Kelkar, Director of Climate Program, World Resources Institute, India.
Read more: Climate negotiators must wake up to loss and damage as disasters multiply
The reasons for delay
Compensation in the context of L&D has been debated through the years, in many international conventions, and the major reason for this delay is the ambiguity about what constitutes as loss and damage arising from climate change and who pays for it. How do we know which cyclone is caused by climate change?
“Attribution science has improved a lot and it is improving every day,” shares Singh. “Slow-onset events like sea-level rise have been caused by historical anthropogenic activities. And in the case of extreme weather events and disasters, scientists are now able to calculate what percentage of the event has been intensified by climate change. This data will help us understand what events require L&D finance and how much is needed,” he continues.
World Meteorological Organization’s Cataloguing of Hazardous Weather, Climate, Water and Space Weather Events (WMO-CHE), helps in loss and damage accounting by observing and monitoring the Earth’s atmosphere, weather, climate, water and space weather events. “Linking heavy rain, strong winds, storm surge flooding and landslides to a tropical cyclone (is possible), as well as the linking of cascading events. The linking feature makes this methodology scalable from local (micro events) to larger phenomena, including climate time scales, enabling loss and damage data to be disaggregated at the small or micro level hazard, such as a storm surge, or aggregated to the larger scale such as a tropical cyclone,” reads the WMO’s Atlas of Mortality and Economic Losses from Weather, Climate
and Water Extremes (1970–2019).
However, attribution of events to climate change is not the only challenge that has slowed the industrialised countries’ response in the matter of L&D. “A bigger concern that the industrialised countries have is that, once you make a link between the loss of lives and damage to property, and the historical emission of the industrialised countries, the issue of legal liability can be debated in other courts outside of the UNFCCC. There is litigation happening already, with a lot of young people saying that their future is threatened by fossil fuel companies or that governments are not doing enough to stop global warming or meeting climate targets. This linking and taking responsibility for historical emissions leading to loss and damage, opens the possibility of legal redress outside the UNFCCC framework,” explains Kelkar.
A renewed determination for COP27
Despite the slow progress and several challenges that are yet to be tackled, the experts say that the negotiations surrounding the L&D seem promising this year. The COP27 Presidency has planned to convene an informal Heads of Delegation meeting from September 10-11 in Cairo, Egypt, specifically to discuss Loss and Damage, which has increased the hopes of those working to get L&D as part of the main agenda at the negotiations. The Conference of Parties, or COP, the UN’s annual climate change conference, will be held in Sharm el-Sheikh, Egypt this year from November 6 to 18.
Singh says that the Climate Action Network has been working with negotiators in different countries to raise the issue of Loss and Damage. “Many countries (especially industrialised nations) are now recognising the need for L&D finance. At COP27, we are working to keep L&D at the top of the agenda – it can’t be ignored anymore. We will see more discussions in Egypt,” he says.
Citing the discussion paper on L&D, Singh recommends the next steps and timelines for an LDFF and concludes, “This year, we must decide (at COP27) to establish an LDFF by defining its functions, core institutional arrangements and a mandate to respective bodies. This will be followed by how the operationalisation would work, in the next year. And by 2024 the funds should start flowing and the money should be dispersed to the vulnerable communities that urgently need them.”
Read more: Extreme flooding from intense cyclones to affect more people in India, Bangladesh
Banner image: Deshbandhu Park in Kolkata, West Bengal, post cyclone Amphan. Photo by Indrajit Das/Wikimedia Commons.
