/ 17 November 2022

COP27 will be a failure if reparations for loss and damage are not properly addressed

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Pakistani people move to a safer place for a flooded water due to the flood situation in Tando Jam city of Sindh. (Photo by Jan Ali Laghari/Anadolu Agency via Getty Images)

Developing nations have pinned the success of the 27th Conference of the Parties (COP27) underway in Egypt on the outcomes of talks on climate liability and reparations, officially regarded as “loss and damage”. Off the back of accelerating global climate impacts and devastating floods in Pakistan and South Africa, vulnerable countries came to COP27 demanding a deal on loss and damage. There is no finance under the current UN framework to address loss and damage.

Following COP26 in Glasgow, Scotland last year, broad agreement was reached among developing nations that COP27 in 2022 was the moment to resolve issues around loss and damage. Despite this, loss and damage was almost kicked to the curb entirely as an official agenda item for this year’s COP during the “Glasgow Dialogues” that took place in June 2022 when parties convened in Bonn, Germany. Delaying, derailing and stalling loss and damage discussions has been a long-standing position by countries like the United States and the European Union who share the bulk of liability for present, past and future climate-related disasters.

“The successful outcome of the loss and damage does have a strong bearing on the outcome and credibility of this COP. It is widely understood that mistrust between developed and developing nations are at an all-time high. Good progress on loss and damage would restore some of that trust if it is pushed out without tangible outcomes that mistrust is going to grow,” said Brandon Abdinor, climate advocacy lawyer at the Centre for Environmental Rights (CER). Abdinor added that a poor outcome will cause developing countries to possibly use sound climate action as a bargaining chip.

“We end up in a stalemate with the loser being sound climate response,” he said. 

Finally on the agenda

On 13 June 2022, China and a negotiating bloc of developing countries wrote to the United Nations Framework Convention on Climate Change (UNFCCC) secretariat demanding that loss and damage must be an official agenda item for COP27. The request was accepted and signified an enormous victory for those suffering the worst effects of climate change. It is widely believed that the horrific floods in Pakistan accelerated political pressure behind this campaign, forcing it onto the main agenda for the first time at COP27.

The torrential downpours in Pakistan earlier this year affected 33 million people, with more than 1,730 losing their lives. The economic losses are estimated at USD 30-35 billion. In an open letter, Climate Action Network explained that “such finance for activities such as relief, rehabilitation, reconstruction, and unavoidable relocation, is currently missing from the financial architecture of the UNFCCC.”

Small victories on climate liability finance dimmed by contentious Paris clause 

It has been eight years after the creation of the Warsaw International Mechanism on Loss and Damage (WIM) at COP 19, and three years after the establishment of the Santiago Network for Loss and Damage at COP 25, yet affected communities are still getting only minimal help, mainly as post-disaster humanitarian aid.

So far nearly $300m has been pledged on loss and damage before and during COP27, another sign that some countries are ready to take the issue seriously. Scotland took the lead on this issue, pledging £2 million to address loss and damage at COP26. This was later followed by a commitment by five philanthropic foundations to dedicate 3 million USD, and a pledge by the government of Wallonia, a region of Belgium, of €1million. But not the US, which carries the lion’s share of responsibility for historical emissions (a quarter of all emissions to date) that are currently warming the planet. 

The Paris Agreement, signed in 2015 by 196 parties to the UNFCCC includes provisions for loss and damage under Article 8. However, the US and other developing countries ensured that this was accompanied by a clause that compromised the decision. That clause states that Article 8 does not, “involve or provide a basis for any liability or compensation” (paragraph 51 of Decision 1/CP.21), suggesting that any support for loss and damage would be cooperative and voluntary. 

The G77 have come a long way since loss and damage was first mentioned in the international arena in 1991 when the Alliance of Small Island States proposed an insurance pool that would compensate low-lying islands for loss and damage associated with sea-level rise. But, as with the last three decades of climate diplomacy, that victory was only the beginning of another long drawn out battle between the world’s historical polluters and those least responsible, but worst affected. 

At present, the talks remain split between those responsible for the climate disaster and those worst affected. But activists have stressed that the fact that the loss and damage issue has even made it onto the agenda presents an enormous breakthrough. The G77 and China have finalised a document on their expectations on loss and damage which has been submitted to the COP. 

The make-or-break moments begin 

On Wednesday at noon informal discussions began on the Santiago Network which was established in 2019 to catalyse the technical assistance of relevant organisations, bodies, networks and experts on loss and damage. During the establishment of the functions of the Santiago Network last year, the G77 and China again called for a finance facility on loss and damage which was rejected and replaced with the Glasgow Dialogues which are set to continue until 2024. At the same time, the ministers appointed to coordinate the discussions on loss and damage proposed a process for a way forward under this agenda item.

“Loss and damage is so contentious because this is where the issue of liability comes up. If we look at it from a pure polluter pays principle, the emissions from the developed world which caused the impacts are directly responsible for the damages suffered and technically speaking those who caused the harm should pay for the damages and this is what is being avoided at all costs,” said Abdinor.

Countries like Bangladesh who are speaking on behalf of lower developing countries, have stressed that whether or not this COP is seen as successful will to a large extent depend on the outcome on loss and damage. In a regularly updated observers notice, Sherry Rehman, Minister of Climate Change of Pakistan, was quoted reminding the room that there are high expectations to establish and announce a loss and damage facility at COP 27. 

“Don’t tell us to go to private investors, there has to be a transformational decision here for countries that … are groaning under the yoke of debts,” she said, emphasising that this decade is both devastating and decisive, “but we do not want to survive this difficult decade on our own, we do not expect to.”

At present, the focus on insurance for loss and damage by developed nations is worrying for other parties. The G7 has proposed a Global Shield “an offer to the UNFCCC discussions in light of loss and damage”. Civil society organisations and developing countries are sceptical that the Glasgow Dialogue will result in any real action to address loss and damage by developed countries over the next two years. It is not the first dialogue to be held on loss and damage finance and may not be the last. 

In the meantime, the globe’s most vulnerable and poor continue to suffer the impacts of a crisis they did not create. All while living at the whim of conference texts that will decide whether they survive future climate shocks, or not.