CoP and the Contentious Pillar of ‘Loss and Damage’

CoP and the Contentious Pillar of ‘Loss and Damage’


Sruthi Kalyani

“…as COP25 draws to a close and islands wade through and beyond the glitzy public relations and buzzwords, we are astounded. We are appalled and dismayed at the failure to come to a decision on critical issues, the scale of inaction, ineffective processes and some Parties’ yeoman commitment to obstruction and regressive anti-science positions.”

- AOSIS Closing Statement, COP 25

In a geopolitical stage pervaded by delayals and denials, commitment towards collective climate action is a distant dream. The new normal of ex-post-facto patchworks and postponements have made climate diplomacy to lag in meeting the urgency that science demands. The Conference of Parties (COP 25) held in Madrid, Spain is no exception to this reality. Despite the talks that spanned for more than 40 hours overtime, longest in the history of the COPs, the Parties failed to reach consensus on the majorly awaited decisions.

In addition to the major emitters withdrawing themselves from languages of commitment towards enhanced ambitions, several issues were stalled at Madrid, making decisions to wait for the next COP. These issues, to name a few, include - the decision on Article 6, mechanisms to safeguard indigenous communities in a scenario driven by projects run by new carbon market rules, and the review of the Warsaw International Mechanism to address the Loss and Damage of climate-related disasters in developing countries. This article confines itself to focus on the much-overlooked pillar of Loss and Damage, its history, mechanisms, and the path which the COP 25 set for the future.

The debates for addressing climate change-induced loss and damage are decades old. International Relations scholars view the evolution of ‘Loss and Damage’ discourses as the typical case of a structuralist paradox, where weaker states, (the Alliance of Small Island States (AOSIS) in this context), gain better pay-offs in negotiations with the contesting stronger states. In 1991, during the process of negotiations for the Framework of Convention on Climate Change (FCCC), the AOSIS called for the inclusion of insurance pools and technological solutions for addressing transboundary damages caused by climate-related disasters, asserting their view that the least polluters may need compensation from the developed economies for the damages happening in the Anthropocene. This being the start for the call for attention towards financing Loss and Damage, consequent years of climate negotiations saw progress in developing institutional mechanisms for the same. The United Nations Framework for the Convention on Climate Change (UNFCCC), in its Article 4.8, defined a commitment for Parties to take actions for the funding, insurance and technological transfers to countries that are vulnerable to the adverse effects of climate change. Despite efforts at various COPs of the first decade of climate negotiations post the UNFCCC, such as at COP 7 and COP 8 where the technicalities and tools to serve Loss and Damage finance were discussed, the Parties have always had more inclinations towards Adaptation and Mitigation, leaving lesser space for the third pillar. It was only in 2007, following the Bali Action Plan at COP 13, a working definition was laid out, conceptualising Loss and Damage beyond the constraints of adaptation and mitigation. At Bali, the AOSIS made a strong call for setting up a mechanism that would include the components of insurance, risk management and compensation. Following this, COP 16 in Cancun and COP 17 in Durban saw slow-paced materialisations of the demands by the AOSIS through a work programme to address loss and damage in developing countries. However, a major milestone was reached at COP 19 in 2013, where the Warsaw International Mechanism for Loss and Damage (WIM) was established under the Cancun Adaptation Framework (CAF) “ to address loss and damage associated with impacts of climate change, including extreme events and slow onset events, in developing countries that are particularly vulnerable to the adverse effects of climate change”, followed by an approval for a two-year working plan at COP 20. The COP 21 in Paris moved further to include an exclusive article relating to Loss and Damage. It also laid stones for the operationalisation of two entities established under the Executive Committee of the WIM (ExComm) – namely the Fiji Clearing House for Risk Transferand the Taskforce on Displacement. The first review of the WIM which was held at COP 22 recommended the Parties to organize technical workgroups to back WIM by the ‘best available science’ and initiated a call for Parties to explore the availability of financial resources and means of capacity-building.

For an issue whose underlying principle is rejected by stronger states like the US, the momentum and shape that the pillar of ‘Loss and Damage’ had taken up over the course of years is a powerful win for the weaker states. However, there remain issues which are unresolved in the existing framework. Firstly, the very establishment of the WIM under the CAF is contentious, as often debated by the vulnerable countries. Establishing WIM under the adaptation framework, while its operational substance is ‘beyond adaptation’ has resulted in climate financing having no concrete distinction between Adaptation funding and Loss and Damage funding. At present, the major funds under the UNFCCC that potentially address Loss and Damage are Adaptation Fund (AF), Least Developed Country Fund (LDCF), Green Climate Fund (GCF), and the Special Climate Fund (SCCF). All these funds are budgeted by assuming an ideal scenario of below 2°C level commitments of the Paris Agreement. However, the UN Production Gap Report of 2019paint a picture of stark reality where countries are failing in their commitments. Assuming a magnitude of 4°C, financing both climate adaptation and Loss and Damage from the same pool of resources would result in skewed allocation of the limited resources available. Hence, scaling up of new and alternative modes of finance and allocating a proportion for loss and damage in funds such as GCF are ways to consider to strengthen Loss and Damage finance.

The question of quantifying non-economic loss and damage (NELD) and measuring the impacts of slow-onset events are areas that need further scientific study. Most of the climate-vulnerable nations lack technologies that can gauge the magnitude, intensity and the certainty of climate hazards. Climate-related data sharing not only enables nations in anticipating the further onset of events but also facilitates in planning for suitable fund allocation and risk transfers. Establishing standalone finance and technical arms within the WIM can help to address these issues.

The second review of the WIM at COP 25 progressed in the following aspects. Firstly, it recognised the urgency and the need for enhanced action by including and inviting various stakeholders to support for loss and damage. Secondly, it provided for the establishment of the Santiago Network for technical assistance to developing countries. Setting up of working groups on assessing slow onset events and non-economic loss and damage were also discussed. However, the major drawback in the review lied in the failure of arriving at a consensus regarding the governance of the WIM. The stand of the developing countries for the dual governance of the WIM (governed by both the UNFCCC and the Paris Agreement) was contested by the delegates of the developed nations, deferring the issue to be discussed in the next COP.

The COP in Glasgow, UK has a lot on the table to resolve when it comes to WIM. Channelising finance and improving the governance of the WIM has been the reiterations of the vulnerable nations. Besides, decisions at COP 26 should address the following – (1) Reliable and adequate funds that would support not only the Loss and Damage needs, but also cater the research and technological needs (2) Standardised guidelines, timeframes and information sharing of climate vulnerabilities (3) A scientific approach towards slow onsets and uncertain climate events (4) Legality of compensation and liability related to Loss and Damage (5) Rehabilitation measures and quick response mechanisms, and (6) Recognition and establishment of a critical link between finance facilities and the working of WIM.

The path to comprehensive risk management and long-term resilience towards climate vulnerability lies in the evolution of WIM into a permanent agenda instead of merely being a series of expert dialogues and performance reviews. As a delegate from Columbia at COP 25 commented, “an outcome for the sake of outcome is not enough”. It should be inclusive, immediate and scientific in implementation.

The author is a Master's student at the School of International Studies, Jawaharlal Nehru University, New Delhi.