Wealthier, long-polluting countries globally are failing to meet their commitments to fight climate change and, specifically, falling short of arming developing nations to recover from the fallout of unfolding climate disasters. Climate reparations, or "Loss and Damage" payments, are set to dominate the conversation at COP27.
What is "Loss and Damage"?
The term refers to the irreversible economic and non-economic costs of extreme weather events and slow onset climate disasters such as sea-level rise and melting glaciers. The "loss" refers to things that are irreversibly lost, while "damage" refers to things that can't be repaired or recovered.
Economic costs include lives, jobs, property, food systems, and territory irreversibly lost. In contrast, the harder-to-quantify non-economic costs refer to the loss of culture, identity, sovereignty, human dignity, biodiversity, and psychological well-being.
Ultimately, these funds are meant to be used for finding shelter for the thousands displaced by catastrophic hurricanes like 2019's Dorian in the Bahamas, 2017's Irma in Barbuda, or 2017's Maria, which devastated Dominica and Puerto Rico. It is also meant for relocating coastal communities that are already or nearly underwater because of rising seas.
A brief history of "Loss and Damage"
"Loss and Damage" is far from a recent issue in the climate world. In fact, from the early 1990s, when world leaders and diplomats gathered at the United Nations, small islands began asking for help to deal with climate-related impacts. However, wealthier nations resist these talks as they avoid becoming legally or financially responsible for the unfolding climate impacts.
With shared climate challenges, small islands formed the Alliance of Small Island States (AOSIS) in 1990 at the Second World Climate Conference in Geneva. Trinidad and Tobago was a founding member, and AOSIS, a critical negotiating alliance at COP, is now 39 members strong.
"Loss and Damage" formally entered the negotiations in 1991 with a proposal from AOSIS for the UN Framework Convention on Climate Change (UNFCCC). It included a particular request for "industrialized" nations to pay for the "loss and damage" that would harm vulnerable small island nations due to rising sea levels. Ultimately, the proposal did not make it into the UNFCCC, but the nearly three-decades-long negotiations began.
It took until 2015 at COP21 for "Loss and Damage" to be formalized within Article 8 of the Paris Agreement, distinct from previous references to adaptation. Successive COPs included more debates, negotiations, and work plans, but there was little progress on providing financing for "Loss and Damage."
At COP26 in Glasgow last year, G77 plus China, a negotiating block at the United Nations representing six out of seven people in the world, called on wealthy countries with the largest greenhouse gas emissions to pledge money for loss and damage. It was opposed by the United States, the European Union, Australia, and others. Instead, the Glasgow Climate Pact and the Glasgow Dialogue were formed to move forward on a path and process for "Loss and Damage" financing.
55 vulnerable countries estimated their combined climate-linked losses over the last two decades totalled about $525 billion, or about 20% of their collective GDP, based on a report in June 2022. Some research suggests that by 2030 such losses could reach $580 billion per year.
Delegates gather for the opening plenary of COP27 (UNFCCC, Simon Stiel, Kiara Worth)
What happens at COP27?
After three decades of making the first call for "Loss and Damage," United Nations parties agreed at Sharm el-Sheikh, Egypt, to include it in the formal COP27 agenda on Sunday evening. In the coming days, world leaders and representatives will discuss the "funding arrangements responding to loss and damage associated with the adverse effects of climate change."
AOSIS, with a renewed proposal this year, is heading into climate negotiations with a renewed call to close the existing loss and damage financing gaps. AOSIS adds that these funds should also be used for health and education relief, culture, heritage, and ecosystem restoration, debt relief, insurance, and catastrophe bond support with long-term capacity building, systematic observation, and data collection.
According to Racquel Moses, the CEO of the Caribbean Climate-Smart Accelerator, US $20 million has been pledged to date for Loss and Damage. The scale of disasters, however, pales compared to the current total pledge.
"If you're looking at US $20 million, Hurricane Ian just passed. That was US $60 billion," she said.
She noted that there is no proper facility to administer the funding.
AOSIS and the G77 plus China are attempting to solve this problem. AOSIS says their leaders, chaired by Antigua and Barbuda Prime Minister Gaston Browne until the end of 2022, have endorsed an agreement to establish and operationalize a new, fit-for-purpose multilateral fund for Loss and Damage. It will be designated as an operating entity of the United Nations Framework Convention on Climate Change (UNFCCC) Financial Mechanism. AOSIS added that they hope the fund's design and operationalization will be completed by COP28 in 2023.
According to AOSIS, the proposed fund "will enjoy multilateral, consensus-based legitimacy as an operating entity; and be required to have an equitable and balanced representation of all Parties within a transparent system of governance, which is not guaranteed outside of the UNFCCC."
T&T's Position on Loss and Damage
Though not in attendance at COP27, Trinidad and Tobago's Minister of Foreign and CARICOM Affairs, Senator Dr Amery Browne, also reaffirmed the Secretary-General's statement at the 77th session of the United Nations General Assembly, earlier this year:
"Droughts, wildfires, floods, and cataclysmic hurricanes and typhoons are realities that small island states know all too well. At the same time, slow-onset events such as the deterioration of coral reefs and the influx of sargassum seaweed threaten our fragile ecosystems and the livelihoods of our people, especially our fisherfolk and those dependent on tourism."
Minister Browne added: "Accordingly, Trinidad and Tobago calls for the full and effective implementation of the Paris Agreement. A dedicated facility to address Loss and Damage under the UNFCCC Financial Mechanism is an absolute necessity. These actions must be prioritized because what is at stake is the very existence and viability of small island States."
This story was produced as part of the 2022 Climate Change Media Partnership, a journalism fellowship organized by Internews' Earth Journalism Network and the Stanley Center for Peace and Security.