COP27: 1st time, compensating poor nations for climate disasters on the table

Subject: Environment

Context-

In a big positive on the opening day of the climate change conference COP27 at Sharm El-sheikh, Egypt, negotiators agreed to discuss the creation of an international mechanism for compensating poor countries that suffer large-scale damage due to climate disasters.

What is loss and damage?

The Intergovernmental Panel for Climate Change (IPCC) has two definitions for ‘loss and damage’.

The term ‘losses and damages’ refer to the economic and non-economic impacts of climate change, including extreme and slow onset events, in developing countries that are particularly vulnerable to the adverse effects of climate change.

It’s destructive, irreversible, and cannot be addressed by mitigation and adaptation measures.

Loss and Damage (upper case), or L&D, is a “political debate under the United Nations Framework Convention on Climate Change (UNFCCC) following the establishment of the Warsaw Mechanism on L&D in 2013” to discuss losses and damages.

Loss and damage occur when the frequency and intensity of existing climate impacts increase to such an extent that countries and communities are not equipped to handle them.
Their capacity to prepare, cope, recover, recoup or rebuild is no longer there.

Where does the term ‘L&D’ come from?

L&D was brought up as a demand in 1991 by the island country of Vanuatu, which was representing the Alliance of Small Island States (AOSIS).
Thirty-one years and 26 COPs later, this demand has not been realised.
Since then, about 189 million people have suffered the effects of extreme weather-related events in developing countries, every year, according to The Cost of Delay, a report published in October 2022 by the climate advocacy group L&D Collaboration (L&DC).

Evolution of the Loss and Damage finance-

The demand for loss and damage finance is quite old, but it has faced strong resistance from the rich and developed countries.
The climate conference had, in 2013, set up the Warsaw International Mechanism (WIM)on Loss and Damages as a separate track to continue the discussions on this front. But the progress has been painfully slow.
The discussions under WIM so far have focused mainly on enhancing knowledge and strengthening dialogue.
No funding mechanism, or even a promise to provide funds, has come about.
At the COP26 in Glasgow, the G7, a coalition of 134 developing countries, and Chinaproposed the Loss and Damage Finance Facility (LDFF), a dedicated stream of finance to specifically address losses and damages, and as a result, a three-year task force was set up to discuss a funding arrangement for loss and damage.
At COP27 in Sharm El-Sheikh, it is finally included in the formal main agenda of the climate conference for the first time ever.

Reason for its inclusion-

The decision to include loss and damage in the main agenda comes in the wake of a series of unprecedented climate disasters this year — Europe’s worst drought in 500 years, Pakistan’s worst-ever flooding, extensive heat waves in several parts of the world.
Developed countries are decently well-equipped to deal with the consequences. But developing countries need financing, technology and support from developed countries for mitigation, adaptation and addressing loss and damage.

Discussions at COP27-

The presidency of the 27th Conference of Parties (COP27) to the United Nations Framework Convention on Climate Change (UNFCCC) said this year’s meeting must be remembered as the ‘Implementation COP’.
- In other words, the developing world’s first COP since Marrakesh in 2016 must implement the ‘Paris Rulebook’.
- The Rulebook is the guidelines that countries will use to plan, implement and finance climate actions under the 2015 Paris Agreement.
The required climate finance has been woefully inadequate until now, with a shortage of around $17 billion, according to an Organisation for Economic Cooperation and Development OECD report.