Loss & Damage: Ideas welcome, just not that one!
Reflecting on many conversations and discussions, roundtables and speeches at the end of week one at #cop27egypt (including a fabulous panel with Mary Robinson), I am left perplexed by the topic of #LossandDamage . Not that its fundamentals are difficult to appreciate: much of the world is suffering harm due to climate change right now, caused by the emissions of other nations, and the agenda topic contends that this loss or damage ought to be compensated. The Global South is calling for a dedicated funding/financing mechanism. The world leading economies are resisting this strongly - with John Kerry, US Climate Envoy, effectively ruling this out in a speech on Saturday (suggesting existing mechanisms should be looked at instead), that in all respects felt counterproductive to a negotiation process.
Liability seems to be the sticking point, both from a practical and political perspective. On the practical side, the liability of loss and damage is open ended over the course of this century under its current definition. Accordingly, countries are reluctant to expose their economies to such an uncapped and unquantifiable liability (even some countries that have climate events of their own to deal with within their economies already). On the political side, there is a worry that loss and damage creates too much focus on past emissions generation, and as a means to get the world leading economies to accept culpability for the climate crisis and its impacts now on various nations. For these wealthier nations, loss and damage has an air of restitution and compensation that feels like an admission of full liability. It also seems to absolve countries (and their historic leaders) in the Global South of all culpability for not having various infrastructure and processes already in place to protect their own countries from significant #lossanddamage . And so the finger pointing and the challenges of nationhood independence takes the stage. Even when I think of Ireland, where protests this weekend were mainly focused on its cost of living crisis - not the climate crisis - it is hard to imagine the Government taking a position of compensation on global loss and damage events without first rectifying issues at home.
Existing mechanisms, like adaption funding (which is to put infrastructure and processes in place to help nations adapt to climate change impacts), have yet to achieve the scale of funding availability demanded. This is the much maligned $100 billion per annum promised as part of the Paris Agreement. And while COP after COP has "continued to strongly encouraged" nations to increase their funding for adaption to meet this goal, voluntary it remains, and so it remains under funded. I think worse - it remains unpredictable year to year, with only a handful of nations making pledges that are multi-year in nature.
It is hard to see how a #lossanddamage mechanism can follow the blueprint of adaption without falling right into the same challenges and issues. It is also hard to see a mechanism created that is looking backwards to find a way forward.
Lets consider then, what might be the ingredients of a #lossanddamage framework.
First, let's consider what is a legitimate "event" for financing/funding release. This could be an amount that is quantifiable and linked to an identifiable loss and damage trigger event or series of events. The amount to be eligible for borrowing would be the damage quantum minus any insurance proceeds and other funding sources. The degree to which the funding is loan or grant aid maybe a function of the degrees of economic hardship in a particular country and/or the degree to which the country may hold some partial responsibility through negligence or failures to invest adaption proceeds or other proceeds - where this is clearly the case.
You can see in the above how tricky this can get. Most people are thinking this is a fund for a big flood in some Global South country, where it is easy to see that hardship of the people is not their fault and they have not been major emitters. It gets much trickier when you think about various other "developing" nations, with growing economies and means, with high emissions, and with infrastructure that is slowly improving. Its harder still when you consider countries run by non-democratic regimes, where years of under investment in critical infrastructure might be the hallmarks of corruption and authoritarianism.
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If the "funding event" side of the discussion is tough, then let's consider also the "funding support" side. How to fairly take (or ask for) money from nations to place in this Loss and Damage pot for deployment against draw events? Should it simply be another promise like the adaption fund?
Perhaps it should be the price for every tonne of carbon emitted after 2025, that is in excess of the accepted net zero aligned NDC of a country? This would at least align the pressures of #decarbonisation with the loss and damage compensatory mechanism. The faster we decarbonise, the less we pay into loss and damage, and the less loss and damage we create. Down this path you would need to answer then, how the countries with carbon sinks are treated / rewarded, for their role in decarbonisation. You are quickly into the territory of Article 6 of the Paris Agreement (something that continues to cause challenges and is unlikely to be resolved in #cop27 either).
Still - this approach would at least provide a very predictable level money per annum for a #lossanddamage fund - all that would be left would be to agree the common dollar price of a tonne of carbon....... easy right.
It may well be that for now, voluntary emergency aid type funding will be our only credible position. Pledges of wealthy nations to a proportion of GDP to a World Bank type fund, with the #lossanddamage event criteria - could be a useful structure and would at least get money flowing to those nations where contention is low and the suffering is high.
Taking this all together, it is not surprising to me that the work progamme on #lossanddamage is shaping up to be multi-year, with the subsidiary bodies flagging a deadline of COP29 (in 2024) for completion. The work ahead for negotiations is indeed very difficult - but it is also of immense urgency. I only hope that nation states can at a minimum, do something to ease existing suffering right now - and not wait for ink to dry on a universally agreed mechanism before taking action.