It’s time for action, not just dialogue, on Loss and Damage finance

Monday, November 14, 2022

As we go into the second week of COP27, the pressure is on developed countries to step up to heed the moral imperative and provide real solutions on loss and damage funding. So far it’s mostly been warm words, and a call for more workshops and meetings, but surely this is untenable in the context of worsening climate impacts?

How did we get here?

Global failures to mitigate emissions and adapt to climate change are causing losses and damages to lives, livelihoods, and futures of communities [see Figure 1, explained in more depth in the latest policy brief from the Flood Resilience Alliance]. They are inevitable and are happening now across the world, as we are seeing so vividly – and with such human cost – in Pakistan and the Horn of Africa.

Loss & Damage (L&D) is not a new issue for the COPs. It’s been on the table in some form for decades, but getting agreement on new L&D funding has never been successful. Last year at COP26 in Glasgow, developing countries got closest, pushing for a dedicated finance facility to address climate-induced losses and damages; this was blocked by countries in the global north. Instead there was only an agreement to further talks, through the Glasgow Dialogue.

This year, developing countries are again working together to push for a new L&D fund.

A global climate policy framework on Loss and Damage
Figure 1: A global climate policy framework on Loss and Damage

The response from developed countries

While speeches at the Leaders Summit acknowledged the importance of Loss and Damage, this has barely translated into funding commitments. A few millions have been pledged – including from Belgium, Canada, New Zealand, the UK and Scotland – when what is needed is billions.

Developed countries have shown far more interest in the Global Shield, officially launched today at COP, even though details of how it will actually work are extremely sketchy; Joe Biden even mentioned this in his speech to COP. An initiative of the G7 and V20, driven by Germany, the Global Shield is a development of InsuResilience, and is thus expected to focus primarily on insurance and other forms of financial protection.

While this is one part of the solution, insurance is not a cheap approach; it cannot address losses and damages resulting from slow-onset events (such as desertification, salinisation and sea-level rise), nor can it address non-economic losses and damages such as loss of lives and cultural heritage. Also, evidence of its success to date has been mixed.

Developing countries call for a new fund

While there is agreement on a loss and damage finance gap, developed countries do not agree to set up a new fund. They are calling for more data, more research, more workshops, more reports, before anything can be concretely taken forward. This is despite significant technical work already been undertaken on L&D – through the Warsaw International Mechanism, the Suva Expert Dialogue, the Glasgow Dialogue and a host of reports. Yes, there’s a need to develop the details, but developing countries want this to be with a clear view to the establishment of a new fund.

The climate crisis is a global problem, but not all communities are being affected equally – and those least responsible for climate change often experience the most significant impact.

The pressure’s on

Could it be that developed countries are pledging small sums to L&D to take the heat out of the call for a new Fund? Are they prioritising the Global Shield because it is outside the UNFCCC process, and thus avoids any uncomfortable questions about responsibility for causing climate change impacts? Is it a stalling tactic to propose only procedural outcomes for this COP?

With just a few days to go before this year’s COP closes, we look to developed countries to act boldly and in solidarity with those who are suffering now, and to develop an approach that will protect generations to come.

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