COP27 makes history with agreement on ‘loss and damage’ fund for vulnerable countries impacted by climate change

COP27 was set for a showdown between developing and developed countries. As a conference held on the African continent, it was hoped that the plight of the most impacted and vulnerable to the impacts of climate change would be recognised in a tangible, financial way. 

After marathon negotiations in Sharm El-Sheikh, Egypt, hope has turned to reality after the historic announcement that governments from more than 190 countries agreed to set up a fund dedicated to addressing “loss and damage” next year.

But what exactly is meant by loss and damage?  

The United Nations Framework Convention on Climate Change (UNFCCC) explains that “human-induced climate change, including more frequent and intense extreme events, has caused widespread adverse impacts and related losses and damages to nature and people beyond natural climate variability.

“Some development and adaptation efforts have reduced vulnerability, but the rise in weather and climate extremes has led to some irreversible impacts as natural and human systems are pushed beyond their ability to adapt.”

Loss and damage, in short, refer to the damage done by human-induced climate change that occurs beyond the adaptive capacity of countries. These countries are usually the poorest and least developed and have contributed the least to the impacts that they are today the greatest victims of.

While long recognised by the UNFCCC, loss and damage has never had its own dedicated financial mechanism – until today.

Parts of the proposal by the COP27 Presidency on “Matters relating to funding arrangements responding to loss and damage associated with the adverse effects of climate change, including a focus on addressing loss and damage” are worth quoting:

“Noting the increasing urgency of enhancing efforts to avert, minimize and address loss and damage associated with the adverse effects of climate change in the light of continued global warming and its significant impacts on vulnerable populations and the ecosystems on which they depend, as illustrated by the findings in relevant recent scientific reports…

“Acknowledging that existing funding arrangements fall short of responding to current and future impacts of climate change and are not sufficient to address the existing funding gaps related to providing action and support in responding to loss and damage associated with the adverse effects of climate change.” 

The proposal continues that the Conference of the Parties (COP): 

"1. Acknowledge the urgent and immediate need for new, additional, predictable and adequate financial resources to assist developing countries that are particularly vulnerable to the adverse effects of climate change in responding to economic and non-economic loss and damage associated with the adverse effects of climate change, including extreme weather events and slow onset events, especially in the context of ongoing and ex post (including rehabilitation, recovery and reconstruction) action;

2. Decide to establish new funding arrangements for assisting developing countries that are particularly vulnerable to the adverse effects of climate change, in responding to loss and damage, including with a focus on addressing loss and damage by providing and assisting in mobilizing new and additional resources, and that these new arrangements complement and include sources, funds, processes and initiatives under and outside the Convention and the Paris Agreement;

3. Also decide, in the context of establishing the new funding arrangements referred to in paragraph 2 above, to establish a fund for responding to loss and damage whose mandate includes a focus on addressing loss and damage."

 



 

Speaking to Our Burning Planet under the shade of a shuttered Hard Rock Cafe pop-up on Saturday 19 November, Barbara Creecy, Minister of Forestry, Fisheries and Environment said “Of course, we are pleased on the loss and damage issue. We are pleased that there’s agreement to set up a financing mechanism. And we think that’s really important for vulnerable countries.