COP27: progress on Loss and Damage, but many challenges ahead

Monday, November 21, 2022

Now that the so-called ‘Implementation COP’ has concluded – once again coming down to a last-minute push for agreement – experts from across the Zurich Flood Resilience Alliance reflect on what was achieved in Sharm El-Sheikh, and what needs to happen next.  

Alliance partners IFRC, Concern Worldwide, Mercy Corps, Plan International, Practical Action and Zurich Insurance Group were present at COP27, hosting side events and sharing our latest research.

The agreement to establish a Loss and Damage fund to assist communities that contribute the least to carbon emissions but bear the brunt of climate change is a huge achievement at COP27. Anything less than this would have jeopardized trust in the climate negotiations. There is now much to do to agree on the details – including the need for both additional public funding and innovative sources of finance – and the real work to operationalize the fund now begins.

This genuine achievement on the new Loss and Damage fund unfortunately comes against a backdrop of only small progress elsewhere, and major disappointment about the lack of a roadmap for rich countries to provide climate finance already promised.

Debbie Hillier, Mercy Corps

An 11th hour deal on Loss and Damage

In the build-up to COP27, the expectation was that the issue of Loss and Damage would continue to be highly contentious – but as negotiators descended on Sharm El-Sheikh, sustained pressure from a united block of developing countries had a significant impact on moving the discussion forward.

The inclusion of Loss and Damage on the official agenda was a welcome early sign, as were unexpected pledges of dedicated funding from Austria, Belgium, New Zealand and others (albeit these were millions, when what is needed is billions, and most – if not all – funding was not new). Later in the first week, a welcome agreement was reached to establish the Santiago Network, designed to provide technical support to developing countries on Loss and Damage.

After tense negotiations, news of agreement to establish a fund for Loss and Damage finally emerged. Small Island States, who were instrumental in kickstarting the Loss and Damage conversation over three decades ago, were among those celebrating the achievement.

The process of turning the plan into tangible financial support will be extremely challenging. The Alliance will be closely following the next steps, and continuing to call for the needs of climate-vulnerable communities to be at the heart of the process.

The establishment of the Santiago Network at COP27 sends a positive signal that support is needed. It’s not just about finance, but finance delivered with technical capacity. The Zurich Flood Resilience Alliance is well placed to help communities respond to increased climate-induced flooding.

Colin McQuistan, Practical Action

Adaptation and mitigation must not be sidelined

There was precious little progress on curbing the emissions that are a principal cause of climate-related losses and damages. The final text referred to “low emissions” instead of renewables, while calls for a peak in emissions by 2025 went unheeded. 

A global climate policy framework on Loss and Damage
Failures to address mitigation and adaptation will lead directly to more losses and damages

It was also concerning to note the gulf between how prominently the topic of climate adaptation featured in COP27’s side events, and the lack of ambition and clear progress in the negotiations themselves. The agreement made at COP26 to double adaptation finance by 2025 (based on 2019 levels) failed to make it onto this year’s agenda or be followed through with concrete plans for action.

Where adaptation was the focus, it was consumed by debates – especially under the Global Goal on Adaptation (GGA) – about how adaptation progress would be measured, and whether resources are flowing to the key priorities and having the desired impact. The final text was missing some key details concerning human rights, locally-led adaptation and others, but the plans to develop a framework for the GGA are now in place.

Elsewhere, there was a useful inclusion of the importance of early warning systems in the final implementation plan, an agreement on the importance of food systems and agriculture in the Koronivia joint work, and the launch of the Sharm El-Sheikh Adaptation Agenda (an initiative of the High-level Champions).

However, the evidence makes it clear that much more needs to be done. Without a concerted effort to realign ambitions on mitigation and adaptation and pursue climate adaptation through effective, data-driven policies and programmes, losses and damages will continue to rack up and wreak havoc in the most vulnerable communities.

Global climate finance must lead to action that actually supports the most vulnerable.

Michael Szönyi, Zurich Insurance Group

Where is the money going?

In general, outcomes on climate finance were very disappointing, with few reassurances on scaling-up climate finance and no clear roadmap to deliver the $600 billion promised between 2020 and 2025.

One of the biggest single financial commitments was from Germany to the Global Shield Against Climate Risks – a predominantly insurance-based initiative announced by G7 and V20 countries during COP27. This was welcomed in some quarters but it remains unclear as to how it will function and of course insurance can only cover a small part of climate-induced losses and damages – for example, it cannot address non-economic losses and damages such as losses of life, culture and ecosystems.

This is another example of finance being assigned to highly ambitious initiatives that are concentrated at the global level. It is imperative that a larger share of climate finance is targeted and decentralized to reach the local level, where it can more effectively support those who have been impacted by the climate crisis.

We need to be investing now to help people adapt to climate change, to avert future losses and damages. The adaptation gap must be urgently addressed.

Sally Tyldesley, Concern Worldwide
Time will tell if the decisions taken at COP27 translate to tangible support for climate-vulnerable communities. Photo: Senegalese Red Cross

Beyond COP27: next steps

The unexpected agreement on a Loss and Damage fund will be what COP27 is remembered for, but with stalled progress on adaptation, as well as backward steps on mitigation, the event as a whole fell short on what is needed to close the gaps that are leading to disasters of the kind experienced by Pakistan earlier in the year.

It’s clear that these issues will remain highly contested in the years to come, in no small part due to the complicated nature of the problems needing to be solved. However, it’s important that we do not shy away from tackling these issues because of their complexity.

While mitigation efforts are often informed and assessed using relatively simple metrics, the impact of funding for adaptation and Loss and Damage is much harder to quantify. Measuring the benefits of resilience-building is therefore a taller order, but one to which the international community must rise. If an impactful path forward is to be found, effective frameworks for measuring resilience, combined with robust data-gathering and knowledge-sharing processes, will be crucial. This where the discussions around the GGA will be critical over the coming year.

The Zurich Flood Resilience Alliance remains committed to working alongside flood-prone communities around the world as they build resilience to the increasingly perilous conditions brought about by climate change. Find out more here.

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