Loss and Damage

Addressing the unavoidable impacts of climate change

‘Loss and damage’ is a fairly precise technical term used in international climate negotiations. It fundamentally refers to climate impacts that exceed the adaptive capacity of countries, communities and ecosystems. This term is used to describe how people – particularly the poor and vulnerable – are reeling from the impacts of human-caused climate change, which is predominantly driven by the emissions of a wealthy minority. Recent examples of these cataclysmic events include the death of around 2000 people, besides a loss of around forty billion US dollars in terms of infrastructure and property, in a run of unprecedented extreme weather events in Pakistan. On the other hand, record heat has blighted much of the globe – for example, killing 1,000 people in Portugal and Spain in July. This is what is giving rise to demands for loss and damage compensation. Countries that have had negligible contributions to historical emissions and have severe limitations of resources are the ones that face the most devastating impacts of climate change.

Currently, because climate change is caused by greenhouse gases already in the atmosphere, rich industrialised countries are responsible for most of the emissions causing these phenomena. Poor countries often feel the effects first; for example, Pakistan contributes less than 1 percent of the world’s greenhouse gases blamed for causing global warming, yet it is among the countries most vulnerable to the growing consequences of climate change. According to the long-term German Watch index, Pakistan is constantly among top 10 climate vulnerable countries. The nation faces ever-rising temperatures, drought and flooding that threaten health, agriculture, water supplies and hopes for development of a society that ranks in the bottom quarter of nations, based on income per person.

Providing help to the affected countries and peoples after a cataclysmic climate event might sound like fairly standard foreign aid. But when recast as a matter of liability and compensation, rather than a gift, it becomes much more controversial. Computer models allow scientists to quantify the role that greenhouse-gas emissions play in a given disaster—and therefore the enormous sums that big emitters could be on the hook for.

Unsurprisingly, developed countries have pushed back against this reasoning since it emerged in the early 1990s, when the text of the UN Framework Convention on Climate Change (UNFCC) was being drawn up. A group of island countries had proposed that an international insurance fund be created to compensate low-lying countries for the damage caused by rising sea-levels. The suggestion was not included in the final text, but the idea has persisted.

In 2013, however, the Warsaw International Mechanism (WIM) for Loss and Damages was set up as the first formal acknowledgment of the need to compensate developing countries struck by climate disasters. The Mechanism’s role was recognised in 2015 in Article 8 of the Paris Agreement and it was reviewed in 2019 at COP25, during which developing countries demanded that it be enhanced and strengthened to include additional finance from developed countries.

In recent years, an additional finance need for loss and damage has increasingly come to the fore. At COP26 in Glasgow, developing nations argued strongly that developed countries owe them funding in this area.

However, that COP ended with developed countries blocking attempts to provide a financial facility for loss and damage, instead setting up a “dialogue” to allow formal discussions on the topic to continue. The COP27 presidency vision highlights the need to address loss and damage by “finding a balanced solution to the funding issue”.

As mentioned earlier, in this piece, the term “loss and damage” describes how climate change is already causing serious and, in many cases, irreversible impacts around the world – particularly in vulnerable communities. It is sometimes called the “third pillar” of climate politicking, after mitigation (tackling the root cause of the problem by reducing emissions) and adaptation (preparing for current and future impacts). According to Prof Saleemul Huq, the director of the International Centre for Climate Change and Development (ICCCAD) and a pioneer of loss and damage research and advocacy, “The term loss and damage means the impacts of human-induced climate change affecting people around the world. Damage refers to things that can be repaired, like damaged houses, and losses refer to things that have been lost completely and won’t come back – like human lives.”

At UN climate talks, the term is used by nations and organisations arguing for developed, high-emitting nations to be held responsible for losses incurred in poorer regions, which are least responsible for climate change.

According to the IPCC, loss and damage can broadly be split into two categories:
1. Economic losses involving “income and physical assets”
2. Non-economic losses, which include but are not limited to “mortality, mobility and mental well-being losses”
It says that the “overall adverse economic impacts” of extreme weather events and slow-onset events, such as sea level rise and glacier loss, have so far been detected in industries including agriculture, forestry, fishery, energy and tourism – and through the loss of outdoor labour during climate extremes.

A separate UN report from the World Meteorological Organization published in 2021 found that economic losses from climate and weather disasters have increased sevenfold over the past five decades.

If we take the case of Pakistan, we see that recent flood disaster has triggered an unprecedented interest in the country’s climate crisis and global climate injustice. It is now commonly said that whereas Pakistan’s share in global carbon emissions is miniscule, an unfair burden has fallen on the country’s economy and poor population. The scale and magnitude of economic and non-economic losses, two core concerns of the ‘loss and damage’ concept, have brought to the forefront the demand for reparations. In this situation, Pakistan needs climate funds that are easy to access with predictable transfers.

The writer is a member of staff.