- Developing nations face escalating loss and damage from extreme weather and from slow onset events such as melting glaciers, desertification and sea level rise.
- Loss and damage due to climate change could cost the global economy $19-$59 trillion a year by 2049, suggests recent research.
- Loss and damage funding is in addition to the climate finance needed by developing countries for mitigation.
Incessant monsoon rainfall on July 30 in Wayanad, a mountainous district in the Western Ghats, led to massive landslides that killed hundreds of people in Kerala and caused damage to property valued at over $140 million. The extreme rainfall of 140 mm in a single day, made more intense by human-induced climate change, severely impacted highly vulnerable communities, scientists said, in the aftermath of the disaster.
The increase in climate change-driven rainfall is likely to increase the potential number of landslides that could be triggered again, according to World Weather Attribution, an international scientific collective. There is an urgent need to adapt to climate change in the region in ways that include reinforcement of susceptible slopes, landslide early warning systems, and building retaining structures to protect vulnerable localities.
Read more: Wayanad landslide: Kerala needs disaster mitigation rather than management
The Wayanad disaster was one among many in 2024. Floods, heatwaves, droughts, storms and wildfires in just the first six months of the year claimed thousands of lives, threatened the health and livelihoods of millions of people, and caused tens of billions of dollars in damage.
For the first time this year, even the UN refugee agency said in a report released on November 12 that people forced to flee war, violence and persecution are increasingly finding themselves on the frontline of climate change, exposing them to a lethal combination of threats, but without the funding and support to adapt. Of the more than 120 million forcibly displaced people worldwide, three-quarters live in nations heavily impacted by rising emissions, the UN body said.
There’s little doubt then that the climate crisis is deepening and so is the associated loss and damage. In this context, this year’s UN climate summit in Baku, Azerbaijan assumes critical importance. This year’s meeting was aimed at agreeing on an updated spending target known as the New Collective Quantified Goal (NCQG) on climate finance.
Read more: [Explainer] What is Loss and Damage?
High cost of loss and damage
To be sure, mitigating and adapting to climate change are only part of the challenge. Developing nations also face escalating loss and damage, not only from extreme weather, but also from slow onset events like melting glaciers, desertification and sea level rise. These could cost them $447-894 billion per year by 2030, according to a discussion paper by Heinrich Boll Stiftung, a German philanthropic organisation.
Years of global discussions on loss and damage led to only frustration as the developed world rejected any obligation to compensate developing nations for loss and damage due to climate change. Although loss and damage was given its own article in the Paris climate agreement, it was left out of the financing commitments under the pact.
When a global loss and damage fund was ultimately created at the 2023 Dubai climate summit, it was seen as a big win for climate justice. The fund is managed by the United Nations and the World Bank serves as the financial trustee. But the early optimism could be misplaced as the fund has yet to deliver any of the support poor countries need to cope with loss and damage.
Sweden in November became the latest wealthy country to make a pledge to the fund, contributing $19 million and bringing total commitments to around $720 million. The funding includes just about a $17.5 million commitment from the U.S., the country that has historically emitted the most planet-warming gases. It is also much smaller than the fair share contribution by the U.S., which could amount to $340 billion annually for both adaptation and loss and damage support, according to one calculation.
But the small amount of funding mobilised can only go so far. Climate disasters are causing hundreds of billions of dollars’ worth of damage worldwide every year. Loss and damage due to climate change could cost the global economy between $19 trillion and $59 trillion per year by 2049, recent research suggested. “We need significant contributions flowing to the loss and damage fund so it can have a meaningful impact,” UN Secretary General António Guterres said during the Baku negotiations.
Read more: Finance and mitigation divide stalls progress at COP29 in Baku
Fund starts operations
Not all hope is lost. The Fund for Responding to Loss and Damage, as it is formally known, now has a board of directors and Ibrahima Cheikh Diong, a Senegalese-born U.S. citizen, as the first executive director of the initiative. The fund chief said he was hopeful that wealthy countries would increase their commitments.
“We’re focused on the fact that there’s a diversity of funders,” he told the New York Times in an interview last week. “This is about global solidarity. It’s not one country alone. Even though we have $720 million today, it needs to be in the billions.”
The mere setting up of the loss and damage fund could turn out to be a false dawn, not only failing to deliver the support developing economies need to cope with climate-related loss and damage, but also providing an excuse not to include such support in the NCQG, Liane Schalatek, associate director of Heinrich Boll Stiftung, wrote in an article on November 19. “It could even set the stage for other kinds of climate-finance contributions to be made voluntary for the foreseeable future,” she wrote.
As the Baku climate summit struggled with hammering out an agreement to ensure funding to address the climate crisis, there was increasing pressure on the developed world to commit around $1 trillion so that poorer countries are able to mitigate and adapt to the impacts of global warming.
Developing economies, which have been disproportionately impacted by the climate emergency despite having contributed much less to global warming, have spoken about the critical need to bridge the growing finance gap. Their demands for trillions of dollars in annual support have been met with reluctance from the developed world.
“While progress has been made in establishing the new fund, the funding secured remains alarmingly insufficient, falling short of even a billion dollars,” said Harjeet Singh, global engagement director for the Fossil Fuel Non-Proliferation Treaty Initiative. “This stands in stark contrast to the hundreds of billions needed annually in developing countries, as highlighted by numerous studies.”
It is also not just about the money. Building on a climate risk analytical perspective, scientists have proposed a climate policy framework for considering actions and gaps on climate mitigation, adaptation, protection, and response to help chart out the policy space for loss and damage.
Loss and damage estimates
Estimates of loss and damage funding needs for residual impacts for 2025 could amount to a range of $128-937 billion for total global economic climate impacts of $385-737 billion, according to an analysis by the International Institute for Applied Systems Analysis. A comparable study reported residual economic impact estimates for poorer nations in the range of $116-435 billion for 2020 and $290-580 billion for 2030.
These loss and damage estimates are additional to finance needs in developing countries for mitigation, estimated at more than $600 billion, and adaptation, estimated at $187 to 359 billion, as calculated by the institute in collaboration with the Euro-Mediterranean Center on Climate Change, which arrived at the numbers through analysis that has been made publicly available.
They together arrived at a median estimate of $395 billion, ranging from $128 billion to $937 billion, which needs to flow from high and upper-middle income to mid and low-income countries across various principles of historical responsibility.
Since the required funding is orders of magnitude higher than what has been made available, communities and countries on the front lines of climate change are being forced to deplete their limited resources to recover from climatic impacts and rebuild their lives. Before they can recover from one disaster, the next extreme weather event strikes harder. “This grave injustice stems from their undue suffering caused by climate impacts they did not create,” Singh pointed out.
In such a scenario, developing nations have no option but to persistently press wealthy countries to acknowledge their historical responsibilities. There is also a need for citizen action in affluent nations that urges their governments to accept accountability for perpetuating the fossil fuel-dependent development model that has driven the ongoing climate emergency.
“This collective global effort is essential to addressing deep inequities and providing support to those most at risk from climate-induced devastation,” Singh said.
Banner image: Rescue workers pass through Mundakai and Churalmala landslide area in Wayanad. Image by Ahamedhjewadh via Wikimedia Commons (CC0 1.0).
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