Loss and Damage: A Critical Conversation, in Three Acts

Loss and damage from climate change have been an ongoing concern for vulnerable developing countries. The evolution of the issue is very much tied to perceptions of the problem. The initial framing, or first phase, of the problem was that it was all about mitigation: burning fossil fuels are producing greenhouse gases, which have been accumulating in the atmosphere and causing global warming. The solution was to stop or reduce those emissions, which was agreed on in the UN Framework Convention on Climate Change back in 1992 in Rio de Janeiro. However, despite the agreement, little was done to put it into action.

Meanwhile, emissions continued to go up and global warming was no longer avoidable. The framing shifted, from mitigation to adaptation, with the latter message being that while all countries will eventually be affected, the poorest countries and the poorest people in those countries will be affected first, and they are the least prepared to deal with the problem. That was the second phase of the conversation.

The third phase started last year, when climate change losses and damages associated with those impacts have become more and more visible. The vulnerable developing countries have been raising this issue for some time now, and while it was taken up for discussion in COP26 in Glasgow, they were thwarted on the question of establishing a Loss and Damage fund. Only the then-First Minister of Scotland, Nicola Sturgeon, actually stepped up and put GBP two million towards a Fund, but the rest of the rich countries refused to make any commitments.

A breakthrough was finally achieved at COP27 in Sharm El-Sheikh. Three things made a difference this time: 1) the visibility of the problem, 2) a developing country chairing G 77 (Pakistan), and 3) strong solidarity among developing countries to finding a solution. On the side of the developed nations, more and more countries started to break ranks, and finally, the United States of America, which had earlier refused to sign up to a Loss and Damage fund, too agreed.

That’s how COP27 led to a landmark agreement to establish a loss and damage fund in 2022. The fund, created in a spirit of solidarity, aims to support those most affected by climate change impacts. Developing countries had to agree that the Fund would operate without invoking liability and compensation, focusing on the critical questions of funding sources, management, and eligibility.

Dr. Huq speaking at an internal ASI event, called Thought Leaders Forum. In this small snippet, Dr. Huq explains why current climate funds are not fit-for-purpose anymore.

The Urgency of Action

Climate change has already had devastating effects on countries such as Vanuatu, Malawi, and Mozambique. These events are examples of the new era of losses and damages from climate change, and we need to be better prepared. Loss and damage can manifest as rapid onset events, such as hurricanes and cyclones, or slow onset events, like sea level rise and long-term droughts as has been the case in the last few years in the Horn of Africa (Somalia, Kenya and Ethiopia).

To address these challenges, we must look to a mosaic of options, including existing funds and the creation of new funds to support those most in need.

It is crucial that we act now, as delays in funding assistance can have dire consequences for vulnerable populations. The Green Climate Fund, which is the world’s biggest climate change fund, has an average wait time of five years before any funding is released – it’s no longer fit-for-purpose given the scale and urgency of challenges facing the world.

This is why Sharm El Sheikh and the agreement to set up a new loss and damage fund is such a breakthrough moment in the history of climate change efforts. The analogy that experts are using is that countries have agreed to have a bucket for funds. The question is: how do we fill this bucket and make it an effective bucket as opposed to having different, isolated buckets doing uncoordinated things? Many options are being discussed: some to use existing funds in a different way, and others to create new funds altogether.

A new fund for a new crisis? Climate-induced displacement

An example of an issue that is not being addressed yet is that of climate migrants. In Bangladesh’s capital Dhaka, thousands arrive on rickshaws, bicycles, busses or boats, and are then disappearing into the slums of Dhaka. These are migrants who were displaced because of climate change effects and who go under the radar of international charities and even the Red Cross. Neither do they receive any support.

This climate-induced displacement is mainly coming from low-lying coastal districts of Bangladesh and they are not the only ones globally that are or will be displaced. There is no existing system or fund to deal with them – yet. This is one area, where a new fund could create much-needed relief and change.

A Call to Action

As the effects of climate change continue to escalate, it is our moral duty to address loss and damage while promoting climate justice. To rise to this challenge, we must:

1. Act urgently and in good faith to support those most affected by climate change.
2. Engage local communities in the design and implementation of adaptation projects.
3. Improve the quality of projects to unlock available climate funds and ensure resources are allocated effectively.

By taking these steps, we can work together to build a more resilient and just future for all, as we navigate the complex challenges of climate change.

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About Dr. Saleemul Huq, OBE:

Dr. Saleemul Huq, OBE, is an academic who has been involved in climate change negotiations for decades. He is also the Director of the Director for the International Centre for Climate Change and Development (ICCCD). He has been advising and training negotiators from the ‘Group of Developing Countries’, a formal caucus group of 46 countries in sub-Saharan Africa and Asia. He has been advising and building capacity for negotiators initially on adaptation to climate change and now on loss and damage from climate change.

About Adam Smith International:

ASI is a leading global advisory firm that works locally to transform lives by making economies stronger, societies more stable, and governments more effective. We partner with governments, businesses and civil society organisations to create and deliver custom-made solutions to the big challenges facing the world.

Our climate change programmes facilitate green growth and empower vulnerable communities to adapt to changing climate conditions. We have a global portfolio of climate change mitigation and adaptation programmes working across climate policy and enabling environment reform, and a particular focus on; renewable energy (wind, solar, geothermal, hydro, hydrogen and storage); sustainable transport (mass transit and electric vehicles); sustainable urban development; climate-smart agriculture and forestry; water resilience; and communications. We have delivered extensive climate changes programmes in 28 countries across the world – South and Southeast Asia (Pakistan, India, Nepal, Bangladesh, Myanmar, Thailand, Vietnam, Cambodia, Laos and Malaysia); Sub-Saharan Africa (Malawi, Tanzania, Zimbabwe, Zambia, Nigeria, Rwanda, Ethiopia, Kenya, Uganda, Botswana, South Africa, Lesotho, Swaziland and Mozambique); Asia Pacific (Papua New Guinea and the Solomon Islands); Middle East and North Africa (Jordan); and Latin America (Brazil).