Jarredine Morris, Senior Manager, Carbon Trust Africa
“Loss and damage” is a term that has become an integral part of discussions on climate change, and it has become so entrenched in the discussion that it has even been referred to by the short-hand term “L&D”. This article delves deeper into what loss and damage refers to, what the current dialogue is around this complex issue, and what options there are to deal with climate-related loss and damage.
What is loss and damage?
“Loss and damage” is commonly used to describe the destructive impacts of climate change that cannot be addressed by mitigation or adaptation efforts, but there is no internationally agreed definition for this term.
Loss and damage include slow-onset events such as increasing temperatures, biodiversity loss, desertification, and sea level rise. It also includes extreme events such as floods, storm surges, droughts, and cyclones. Generally, countries in the Global South, particularly Africa and small island states, are more vulnerable to the impacts of these events. Both slow onset and extreme events result in economic and non-economic losses. Economic losses are understood as the loss of resources, goods, and services, while non-economic losses include loss of life and health impacts; loss of cultural heritage and indigenous knowledge; as well as devastating environmental impacts such as biodiversity and ecosystem loss.
Source: UNFCCC, Overview of Loss and Damage, Online Guide (2018)
The debate around loss and damage is fundamentally rooted in Global North/South inequality. Many countries that are already exposed to the most severe events and impacts of climate change, and those that will be negatively impacted in future, are those that have contributed the least to causing climate change. The African continent is a good example – Africa has contributed less than 4% to global greenhouse gas (GHG) emissions, yet it is the most vulnerable to the impacts of climate change.
Many politicians and civil society actors have advocated for the historic responsibility of the Global North to be reflected in compensation for loss and damage in the Global South. Many developed countries have deferred discussions on loss and damage under the United Nations Framework Convention on Climate Change (UNFCCC) and they remain wary of any liability and compensation obligations.
A Loss and Damage Fund
A Loss and Damage Fund was established in 2023, but it was clear that the outcomes of this fund would be “based on cooperation and facilitation, and [would] not involve liability or compensation.” The fund would provide financial assistance to those most vulnerable to and impacted by climate change.
There are many aspects of this fund that have to be finalised, and it is expected that COP-28 will expand on discussions held at COP-27, which did not address the sources of financing of the fund, qualification/eligibility criteria, or the types of projects that would benefit from the fund. A key task of the fund is to develop a set of criteria for economic and non-economic losses and to put a structure in place for such a framework.
Many Developing countries argue that the fund should be set up as a distinct operating entity under the UNFCCC and that it should be funded by developed countries to deliver grants rather than loans. The severity of the impacts and fiscal constraints of impacted countries mean that developing countries often cannot pay for the damages caused by climate change-related events. There are also arguments that, given their limited contribution to the cause, it is perverse that vulnerable countries should incur more debt to deal with loss and damage caused by developed countries.
On the other hand, many developed countries argue that there are many financial solutions available, including finance from multilateral development banks, insurance schemes humanitarian aid, and taxes and levies. These topics will likely remain contentious in the upcoming negotiations while the impacts of slow-onset and extreme events will continue to be experienced globally, with developing countries struggling to deal with and build a stronger resilience to these impacts.
(See the text box below for more information on how loss and damage have been progressively integrated into the climate change conversation and led to the establishment of a loss and damage fund.)
What are the options to deal with loss and damage?
While high-level conversations about loss and damage continue, there are a number of practical options to consider when addressing loss and damage.
Advisory opinions and studies
An increasing number of advisory opinions and studies on the attribution and liability of state and non-state actors (corporations) about their contribution to climate change have underpinned several notable rulings, findings, and opinions from Human Rights Commissions, courts, and statutory commissions. While these findings and advisory opinions are not binding, or not binding outside of their jurisdictions, there is nevertheless a lot to be learned from them. It is also illustrative of the trend towards the need for accountability and action on climate change.
Additionally, there has been an exponential increase in climate litigation globally, notably in the US. The majority of these cases seek compensation for loss and damage from the so-called Carbon Majors (a list of 100 companies responsible for over 70% of global emissions since 1965). These
cases have been classified in the Grantham Institute Climate Litigation Global Trends Report (2023) as – ‘Retrospective’ polluter-pays cases; ‘Prospective’ cases seeking to limit future emissions; a combination of these two; Disinformation and Misrepresentation; and Director’s Liability cases. There have been cases in other countries, but no African cases yet seeking compensation from Carbon Majors or Global North countries. Litigation brings loss and damage into the sphere of justice – looking for reparations for harm done, rather than being viewed as an act of charity or aid. There are numerous litigation options, but this route is complex, expensive, and time-consuming and should be viewed as only one of a suite of options to deal with loss and damage. (See the text box below for more details on litigation options).
Diplomacy can be an effective driver of change across multiple areas. Bilateral diplomacy between individual sovereign states or even small groups of states can lead to worthwhile commitments and partnerships. The International Partnership Group (IPG), which is currently negotiating the Just Energy Transition Investment Plan (JET-IP) is such an example. Diplomacy is also core to the negotiation process under the UNFCCC. The Conference of the Parties (COP) is the highest decision-making body of the UNFCCC and meets annually, bringing representatives from all member countries to negotiate and make decisions on climate-related issues. Decisions within the UNFCCC are typically reached through consensus, meaning that all parties must agree to the outcome. This is one of the reasons that there is not much progress with loss and damage. This process is critical for coordinating global efforts to advance action on climate change but faces challenges balancing the interests and responsibilities of developed and developing countries.
Activism and advocacy
Similarly, social and shareholder activism is a critical tool for information sharing and ensuring that affected communities are informed and represented. Activism encourages change by highlighting the importance of dealing with climate change and its impacts, not only as statistics but in terms of the practical implications for real people. Often, the most critical changes required are at policy and regulatory level, and effective advocacy from affected groups and their representatives, can drive this change.
Evidence is key
The fundamental basis for all these drivers – activism, advocacy, and diplomacy, is a sound evidence base. Evidence and analysis are a critical foundation from which to influence, negotiate, and affect the change required to ensure the mitigation of climate change and to manage the impacts of climate change, such as loss and damage.
The impacts of climate change are being felt by more people, more frequently and more intensively than before – it impacts many aspects of our lives, particularly for those most vulnerable. Supporting research and analysis, activism, and advocacy, or directly supporting projects and programmes that inform, or can be leveraged to inform communities about climate change and its impacts – all contribute to building platforms for climate action and resilience building.
The author of this article would like to acknowledge Melissa Fourie and Chris McConnachie’s presentation on the ‘Opportunities for litigating claims of climate loss and damage suffered by African countries.’ This presentation was given in the Wits Pro-VC: Climate, Sustainability, and Inequality Seminar on 1 August 2023. The recording can be accessed here. This presentation succinctly frames the history and context for loss and damage and the possible approaches, including litigation. This article will not go into the same depth on litigation aspects as the presentation does; interested parties are encouraged to watch the webinar for more information on this area.
Discussions on Loss and Damage at Cop
- Starting as early as COP13 in 2007, there were various inputs and considerations on loss and damage.
- This led to the establishment of the Warsaw International Mechanism (for Loss and Damage) at COP19 in 2013.
- In 2015, at COP21, loss and damage became a distinct article (Article 8), but it wasn’t until COP27 in 2023 that there was an agreement to establish a Loss and Damage Fund.
- The outcomes from The Paris Agenda for People and the Planet held in June 2023 call for a transformation of the governance of the international finance architecture to make it more efficient and equitable to enable a world where vulnerable countries are better equipped to face, among others, the crises of climate change. There was also recognition of the need for a financial stimulus with more resources to support vulnerable economies and to scale up private capital flows.
 The outcomes and decisions of the COP meetings are recorded in official documents and agreements. These are divided into different sections or ‘articles’ which cover different thematic areas. These articles outline the general principles, objectives, and operational aspects of the Convention under the different agreements. They serve as the legal framework and guide the actions of the Parties in their efforts to address climate change and adapt to its impacts.
Sources and further reading
Loss and Damage
Loss & Damage; Online Guide https://unfccc.int/sites/default/files/resource/Online_guide_on_loss_and_damage-May_2018.pdf
Developing countries need a loss and damage fund for climate change. How can COP28 make it happen? https://www.atlanticcouncil.org/blogs/menasource/cop28-pakistan-uae-loss-and-damage/
What you need to know about the COP27 Loss and Damage Fund https://www.unep.org/news-and-stories/story/what-you-need-know-about-cop27-loss-and-damage-fund
The Paris [Agreement] Outcome on Loss and Damage https://unfccc.int/files/adaptation/groups_committees/loss_and_damage_executive_committee/application/pdf/ref_8_decision_xcp.21.pdf
Climate Change Litigation Databases https://climatecasechart.com/
Global trends in climate change litigation: 2023 snapshot https://www.lse.ac.uk/granthaminstitute/publication/global-trends-in-climate-change-litigation-2023-snapshot/
Sabin Center & UNEP release Global Climate Litigation Report: 2023 Status Review https://climate.law.columbia.edu/news/sabin-center-unep-release-global-climate-litigation-report-2023-status-review
The Australian Climate Case https://australianclimatecase.org.au/
Tracing anthropogenic carbon dioxide and methane emissions to fossil fuel and cement producers, 1854–2010 https://link.springer.com/article/10.1007/s10584-013-0986-y
The Carbon Majors Database https://cdn.cdp.net/cdp-production/cms/reports/documents/000/002/327/original/Carbon-Majors-Report-2017.pdf?1501833772 Climate Accountability Institute https://climateaccountability.org/carbonmajors.html