Loss and Damage waits for climate Justice in COP27

In the face of the 27th Conference of Parties (COP27) going to be held in Sharm El Sheikh, Egypt from 6 to 18 November this year, ‘Loss and Damage (L&D)’ has become most important catchphrase. Youths around the world have started raising their voice to ensure compensation for loss and damage caused by climate-induced disasters.

However, L&D is not a new phenomenon in the climate change discourse. It has a 30-year-long history. The Loss and Damage debate started at the formation stage of the United Nations Framework Convention on Climate Change (UNFCCC) in 1991. But, over the ensuing years, it remained completely unnoticed, while the UNFCCC concentrated mostly on the mitigation strategy.

L&D started to gain traction in 2007 when Intergovernmental Panel on Climate Change (IPCC) published its Fourth Assessment Report, which emphasized simultaneously the need for adaptation and those ‘already under way’. In line with this IPCC statement, ‘Bali Action Plan’, adopted at the COP13 held in December 2007 in Bali of Indonesia, adverted to ‘disaster risk reduction strategies and means to address loss and damage.’ It was for the first time the term L&D was used in a negotiated UNFCCC decision.

With the continuous pressure from the least developed countries and the Alliance of Small Island States (AOSIS), the Warsaw International Mechanism on Loss and Damage (WIM) -- a dedicated policy mechanism for L&D -- was established to ‘address loss and damage associated with the impacts of climate change, including extreme and slow onset events, in developing countries that are particularly vulnerable to the adverse impacts of climate change’ at COP-19 held in Warsaw, though a number of developed countries were against a new institution within UNFCCC. WIM was formed based on three major functions: (i) enhancing knowledge and understanding loss and damage and how to address it; (ii) strengthen dialogue among relevant stakeholders; and (ii) enhancing action and support on loss and damage, including in the areas of finance, technology and capacity building.

Article 8 of the Paris Agreement has given a distinct recognition of L&D, still ‘Loss and Damage’ is a vague term. There is no official definition of L&D. It generally refers to the ‘residual effects’ of climate change that are beyond the adaptation and mitigation capability. This can occur both from extreme weather events such as flooding, droughts, and cyclones and slow onset events such as sea level rise, desertification, and melting glaciers. A significant portion of L&D can be measured in financial terms, but there are non-economic losses that cannot be measured or are difficult to quantify in financial terms.

It is a matter of regret that in 9 years time span, the UNFCCC’s L&D mechanism sees little progress in implementation. No money has been provided by the developed countries following the WIM. In the COP26 held in Glasgow last year, developing countries called for establishing an L&D Finance Facility. But this was rejected by the developed countries.

‘Climate Vulnerable Economies Loss Report: Economic Losses Attributable to climate change in V20 economies over the last two decades (2000-2019)’ Published by Vulnerable Twenty Group (V20) in June 2022 showed that 55 member countries of V20 have lost USD 525 billion owing to climate change that affecting temperature and precipitation pattern. In terms of the current value of the US Dollar, this loss amounts to 22 per cent of the global GDP of 2019. Bangladesh is at the top of the climate-attributable economic losses, share is 19 per cent considering its population size and level of economic development. Three countries such as Bangladesh, the Philippines, and Vietnam consist of about half of the total loss (44%). V20 countries would have been 20 per cent wealthier if they did not face climate challenges.

A report titled ‘Bangladesh Disaster-related Statistics (BDRS) 2021: Climate Change and Natural Disaster Perspectives’ published by the Bangladesh Bureau of Statistics (BBS) in May 2022 revealed that the total L&D in the disaster-affected areas of Bangladesh amount to TK 1,791,988 million during 2015-2020, which is ten times the amount of 2014-19. The average yearly economic loss was 1.32 per cent of the average GDP. Only floods accounted for 56.4 per cent of the total loss and damage, while river or coastal erosion and cyclones were responsible for 14.99 per cent and 14.25 per cent of the total loss and damage.

Rich nations’ attitudes towards climate actions termed as an oxymoron, mismatches between their speeches in the climate talks and real contribution, failed to maintain their commitment to formulating an annual USD 100 billion Green Climate Fund (GCF) from 2009 to 2022. Initially, GCF was supposed to be split equally between mitigation and adaptation finance, but GCF is completely biased toward mitigation financing. The ultimate beneficiaries are getting little support from the GCF.

A recent article by Camilla Hodgson published in Financial Times (FT) on October 10, 2022, says that the possibility of considering an L&D facility by the rich nations in forthcoming COP27 is very low, as the richer countries are stressed by the pandemic measures and the Russia-Ukraine war. However, a recent declaration by Denmark proves this opinion slightly wrong. In the UN General Assembly, Denmark announced that it would provide 12 million euros; especially for the loss and damage caused by climate change- is the first central government to announce this type of fund. The size of the amount may be too tiny in terms of the billions of dollars of L&D due to climatic devastation. Still, it sends a positive message to the rich nations.

In his first book ‘The Theory of Moral Sentiments’, Adam Smith introduced his famous metaphor ‘the invisible hand’, which reappeared in his well-known book ‘The Wealth of Nation’. According to Smith, an invisible hand guides the distribution of resources, for which the pursuit of self-interest of rich people ends up supporting everyone. Riches can consume as much as a human can consume. The remaining portion of their wealth ends up being distributed among those who help them to gain their wealth. According to Smith, people who run after their own interest care about leaving others safe and secure. It was the duty of the riches to shoulder the responsibilities of the L&D caused in developing countries due to climate change, as they are mainly responsible for their vulnerability.

In the chapter titled ‘Of the Conduct of the Understanding’ of Book IV of ‘Essay Concerning Human Understanding’, John Locke wrote: ‘Our Savior’s great rule, that, we should love our neighbors as ourselves, is such a fundamental truth for the regulating human society, that, I think, by that alone, one might without difficulty determine all the cases and doubts in social morality. These, such as these, are the truths we should endeavor to find out, and store our minds with.’

If we consider the whole world a single unit, then a global morality can be established with the love of all nations for other nations. Being in a good situation without keeping others in mind will take the world towards global injustice. If COP27 reaches a consensus regarding the implementation of the loss and damage mechanism, rich nations may face huge amounts of bills. But it will finally establish climate justice in the world.

Ferdaus Ara Begum, CEO and Mehedi Hasan, Sr. Research Associate, BUILD a Public Private Dialogue Platform