Counting the Climate Debt: Loss and Damage in an Age of Extremes

The issue of loss and damage is intricately tied to the principles of climate justice and fairness, as it disproportionately affects developing nations and marginalized communities, including those with lower socio-economic status, migrant populations, the elderly, women, and children. Loss and damage can manifest through sudden extreme events such as heatwaves and storms, as well as gradual phenomena like rising sea levels and ocean acidification.

Additionally, global efforts to curb greenhouse gas emissions and adapt to climate change are falling short. The Intergovernmental Panel on Climate Change (IPCC) has issued a stark warning: even if measures are taken to limit global temperature rise to 1.5°C, the impacts of climate change will still result in unavoidable losses and damages. This is because there exists a “locked-in” level of warming that has already set in motion irreversible consequences.

What is Loss and Damage?

The term ‘loss and damage’ gained formal recognition in 2013 during the 19th Conference of the Parties (COP19) in Warsaw, marking the establishment of the Warsaw International Mechanism for Loss and Damage. Since then, interest in this area has steadily grown, with an increasing number of countries incorporating discussions on loss and damage into their Nationally Determined Contributions.

Despite its significance, there remains a lack of consensus on the definition of ‘loss and damage’ within the UN Framework Convention on Climate Change (UNFCCC). Various stakeholders perceive it differently. Nevertheless, ‘loss and damage’ generally refers to the adverse effects of climate change that persist despite efforts at mitigation and adaptation.

Categories of Loss and Damage

Loss and damage are commonly classified into two categories: economic and non-economic. Economic loss and damage refer to negative impacts that can be quantified in monetary terms. Examples include the expenses incurred in rebuilding infrastructure damaged by floods or the financial losses resulting from destroyed agricultural crops due to drought. On the other hand, non-economic loss and damage encompass adverse effects for which it’s challenging or impossible to determine a monetary value. These may include psychological trauma following a tropical cyclone, the disintegration of community cohesion due to displacement, or the depletion of biodiversity.

A study conducted in 2023 revealed that between 2000 and 2019, the world endured a minimum of $2.8 trillion in loss and damage caused by climate change, translating to approximately $16 million per hour.

Loss and Damage Fund

During COP27, the UN Climate Change Conference held in Egypt in November 2022, countries achieved a significant breakthrough after rigorous negotiations by agreeing to establish a fund aimed at compensating vulnerable nations for the ‘loss and damage’ inflicted by climate-induced disasters. The momentum continued into COP28, where on the first day, following months of intense and contentious discussions, countries took decisive action to set the loss and damage fund in motion. Crucial details, such as appointing the World Bank as its host, were finalized. Subsequently, over the course of the ensuing two weeks, countries collectively pledged nearly $700 million to initiate funding for the fund.

Moreover, the Santiago Network on Loss and Damage was activated during this period, with the UN Office of Disaster Risk Reduction and the UN Office for Project Services serving as its hosts. Additionally, the United States demonstrated its commitment by pledging an extra $2.5 million. This landmark moment in loss and damage negotiations represents a significant step forward, yet there is much work left to be done.

In conclusion, the reality of losses and damages caused by climate change underscores the urgent need for robust financial, governance, and institutional frameworks at various levels to address these challenges. Delays in enhancing these frameworks will only exacerbate the negative impacts of climate change, disproportionately affecting those who are already most vulnerable and experiencing loss and damage.

References

1. Bhandari, P., Warszawski, N., Cogan, D., & Gerholdt, R. (2024). What Is “Loss and Damage” from Climate Change? 8 Key Questions, Answered.

2. MIT Climate Portal. Loss and Damage | MIT Climate Portal.

3. UNEP. (2022, November 29). What you need to know about the COP27 Loss and Damage Fund.

4. UNEP. (2023, October 31). About Loss and damage.

5. UNFCCC. Approaches to address Loss and Damage associated with Climate Change impacts in developing countries

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