‘Loss and Damage’ emerges as crunch item at COP24

Hurricane Matthew over Haiti on October 5th. [NASA/Flickr]

This article is part of our special report Decoupling economic growth from greenhouse gas emissions.

There is still no clear picture in Katowice on how to provide a readily available funding mechanism for developing countries affected by extreme weather events.

“Loss and Damage” is turning into one of the most intensively negotiated agenda items in Katowice, said Reinhard Mechler, deputy director of the Risk and Resilience (RISK) research program at the International Institute for Applied Systems Analysis (IIASA).

“Nothing is clear at this stage of the negotiations,” he told EURACTIV. 

A perennial issue in global climate talks, loss and damage is an item that divides rich and poor nations the most.

The core of the question is how to provide financial support to countries whose economies are too vulnerable to cope with the impact of climate change. In other words, how to finance and compensate the losses and damages that already occur and are irreversible.

One of the different financial structures discussed around ‘Loss and Damage‘ is the idea of setting up climate insurances, explained Colin McQuistan, climate change and disaster risk reduction senior adviser at Practical Action, a development charity based in the UK.

“The question is how vulnerable people can afford to pay premiums,” he said. 

Climate finance, the sticking point in COP23

Rich countries had pledged to raise $100 billion each year in climate finance for developing countries by 2020. As of September 2017, they had pledged just $10.3 billion. And the question of who should pay remains unanswered. EURACTIV reports from the COP23 in Bonn.

At the COP21 in 2015, developing countries successfully fought to integrate loss and damage as a stand-alone item in the Paris Agreement, in article 8 of the text.

The article addresses concrete areas of cooperation and facilitation between developing and developed countries such as early warning systems, emergency preparedness, comprehensive risk assessment and management or risk insurance facilities, climate risk pooling and “other insurance solutions”.

“Loss and damage is currently being bracketed in most of the negotiations items related to the Paris Rulebook because developed countries are pushing back on this issue,” said Saleemul Huq, from the International Institute for Environment and Development.

The parties agreed to give the item a separate Article in the Paris Agreement, thus recognising its importance and making the issue independent from talks on adaptation to climate change, Huq told EURACTIV..

In Katowice, developing countries are now trying to prevent ‘Loss and Damage’ from being merged with adaptation. “Loss and damage must be reflected separately throughout the Paris Rulebook: in finance, accounting, transparency and the global stocktake,” he said.

“At COP24, the main agenda is the rulebook for the Paris Agreement with measures, reporting and verification (or MRV) being discussed on every negotiating items,” he continued.

“What developing countries are trying to do is to include ‘Loss and Damage’ in every of these negotiating items,” Huq said.

“This is because you cannot talk transparency without loss and damage, you cannot talk finance without loss and damage, you cannot talk mitigation without loss and damage, you cannot talk adaptation without loss and damage,” he explained. “So the developing countries’ negotiators are pushing for loss and damage to become integrated into every agenda item and they are getting pushed back”.

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But the US and Europe “have refused to talk about ‘Loss and Damage’ on finance, arguing that the financial support issue should be focused on mitigation and adaptation only,” Huq said.

The topic will be discussed by the ministers who arrived in Katowice on 10 December for the high-level segment of the COP24.

“This is a very bad sign,” said Marie-Lena Hutfils, a policy advisor on climate risk management at German NGO Germanwatch. “It denies the reality of vulnerable countries who are already facing the worst impacts of climate change, which go beyond their capacity to adapt,” she said.

“We already see the devastating impacts of climate change today. It will therefore be crucial that loss and damage be significantly represented in the rulebook,” she said.

“The risks of future climate-related loss and damage for particularly vulnerable people and communities are far too severe to simply use loss and damage as a negotiation chip,” she added.

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Climate change affects developing countries more heavily, with broad impacts on the environment and the economy, insurers say, highlighting the need to act before damage is done.

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