In the past year, catastrophic flooding overwhelmed large parts of the African continent including Libya, Somalia, Kenya, and Ghana, as well as India and Europe. Meanwhile, wildfires scorched dozens of countries and extreme heat waves blanketed large parts of the planet.
These events killed tens of thousands of people, destroyed essential infrastructure, and destabilized entire economic sectors. In many cases, the costs of recovering and rebuilding from these disasters far exceed the financial capacity of governments, which both leaves countries more exposed to climate impacts in the future and undermines the ongoing health and well-being of communities.
As the climate crisis intensifies, the gap between the costs of severe impacts and the ability to pay is growing, widening global levels of inequality, and adding urgency to a topic that will take center stage in the upcoming United Nations Climate Conference, or COP28, in Dubai, United Arab Emirates, from Nov. 30 to Dec. 12.
With countries now preparing their COP28 delegates, one of the things around which expectations for the gathering have centered is “loss and damage.”
Loss and damage refers to the costs of recovering from climate impacts such as extreme storms, rising sea levels, severe droughts, and powerful wildfires that destroy lives, infrastructure, and economic sectors. As these impacts intensify, many countries are financially overwhelmed and are advocating for global financing mechanisms grounded in concepts of fairness and solidarity, and informed by the political nature of the climate crisis.
“Climate change is a problem that was created by and is continuously created by emissions of greenhouse gasses that emerge from rich people’s lifestyles,” Saleemul Huq, director of the International Centre for Climate Change and Development, told Global Citizen. “Rich people, mostly in rich countries, are the ones causing the pollution and then, on the other side of the coin, the victims of that pollution are the poorest people on the planet and that’s not right.
“If we happen to be one of those humans whose carbon footprints are above average, then we are responsible for causing problems for our fellow citizens who are the poor,” he said. “We must accept moral responsibility. We must accept that it's wrong. And we must do something about it to help them.”
At COP27 in 2022, a breakthrough agreement to provide “loss and damage” funding for vulnerable countries hit hard by climate disasters was reached. The task at COP28 is how to operationalize both the new funding arrangements and the fund.
What Is Loss & Damage?
Loss and damage generally falls into two broad camps, according to the World Resources Institute.
The first involves economic activities and infrastructure that you can put a clear price tag on. For example, if a flood wipes out agricultural production in a region, then the affected country would calculate the loss in revenue to farmers and the resulting supply chain disruptions and come up with a clear figure.
The second camp involves harder-to-calculate harms, such as loss of life, culture, and community continuity. Calculating these losses may hinge on providing indefinite social safety nets, paying for relocation, and investing in cultural revitalization.
Although related, loss and damage is distinct from climate mitigation and climate adaptation, which are both pre-emptive, anticipatory forms of climate action. Mitigation involves reducing emissions to prevent future climate impacts (loss and damage), whereas adaptation involves investments in things that will reduce the severity of impacts (loss and damage).
3 Key Things to Know About Climate Loss and Damage
Discussions around climate loss and damage attempt to pin down the role of climate change in environmental disasters.
Climate disasters already cost countries hundreds of billions of dollars annually.
COP28 will be the stage on which world leaders could operationalize the loss and damage fund.
What Happened at COP27?
In 2022, during the COP27 climate summit in Egypt, wealthy countries agreed for the first time to establish a new loss and damage fund aimed at helping the poorest and most vulnerable communities affected by climate change.
However, months were spent in negotiations between developed countries and developing nations in 2023 to determine how this fund would function, who would contribute to it, how large it would be, and who would administer it.
These series of negotiations lasted until a draft agreement was finally reached in early November, 2023. The agreement will be up for final approval at this year’s COP28.
Despite this progress, it remains uncertain as to where the actual funds for the loss and damage fund promised to climate-vulnerable countries will come from.
The US wanted to add the adjective “voluntary” to any mention of contributions to the fund. Other countries argued that the pool of contributors to the new Loss and Damage fund should be widened to include some developing countries, such as Saudi Arabia, and also private sources of finance, according to The Conversation.
Where Would the Money Come From?
There have been discussions about exploring innovative sources of new finance for this fund, such as implementing windfall taxes on oil and gas profits, taxes on shipping, and levies on fossil fuels, according to the Guardian.
Why Does Loss and Damage Funding Have to Go Through the UN?
Loss and damage funding can and should come from any source — governments responding to domestic climate impacts, nonprofits and philanthropies investing in recovery efforts, and even community crowdsourcing.
Already, coalitions are emerging to allow for multilateral funding for loss and damage. After the COP26 in Glasgow, for example, Scotland established the Climate Justice Fund, which has since corralled tens of millions of dollars from governments, nonprofits, philanthropies, and corporations. The V20, a gathering of finance ministers from vulnerable developing countries, has also established a loss and damage fund.
But only through global coordination, involving all countries, can the scale of necessary funding be delivered, according to Huq.
And this international consensus can really only occur in the UN, where the governments of the world come together to negotiate global norms and rules. In 2015, countries achieved consensus on the need to mitigate greenhouse gas emissions to prevent catastrophic temperature rise. Now, under the Paris climate agreement framework, a mechanism for loss and damage funding can be incorporated.
How Would Loss and Damage Be Determined?
In recent years, scientists have gotten much better at determining the specific role climate change plays in extreme environmental events.
Now, they can look at a hurricane and calculate how strong it would have been without the instigating variables of climate change such as warmer water and air temperatures and higher sea levels. They can then compare this model to the real-world event and figure out the net effect of climate change. It’s in this zone of “net effect” that loss and damage claims come into play.
These impacts already cost hundreds of billions of dollars annually and they’ll exponentially grow as climate change intensifies. Over the next 50 years, the consulting firm Deloitte reported that climate impacts could cost the global economy $178 trillion.
What Can Global Citizens Do?
You can use whatever power available to you — including taking action with Global Citizen via our app or website — to organize within your communities, support politicians and policies advocating for climate justice, and demand that world leaders take meaningful climate action at COP28 and beyond.
- Support global youth demands at COP28 and add your name to the petition now.
- Learn more about the issues at stake by visiting our COP28 HQ.