Left High and Dry? Loss and Damage Following of COP28
On Earth Day 2024, we bring you the final installment in our LLB essay series, based on a selection of writing from our ‘Law and Sustainability’ honours course.
This year’s Earth Day focusses on earthday.org’s commitment to end plastics, demanding a 60% reduction in the production of all plastics by 2040. Find out more at: https://www.earthday.org/earth-day-2024/
By Nadezhda Raduncheva
We must accept the consequences of our permanent impact on the planet and begin to address the losses and damages being caused by climate change. This blog explores the UN regime on loss and damage and its future, as tensions surrounding one of the key developments in this area, the COP27 Loss and Damage Fund, peaked at COP28 in 2023.
What is Loss and Damage?
Earth’s warming by 1.06˚C, compared to pre-industrial temperatures, has wreaked havoc on the environment by causing extreme weather and slower-onset changes, such as rising sea levels. These phenomena cause “loss and damage” to the environment and human activities, particularly in economically and environmentally vulnerable communities. “Loss and damage” encompass economic and non-economic negative climate change consequences, including property loss, infrastructural damage and the destruction of ecosystems, cultures and communities.
For example, the catastrophic flooding in Pakistan, likely caused by climate change, exhibits the loss and damage already taking place. A third of Pakistan was submerged in water during the 2022 monsoon season, affecting 33 million people, displacing 8 million residents and resulting in economic losses of $15.2 billion.
The UN Regime
Loss and damage discussions have begun to feature prominently at Conferences of the Parties (COP) to the most widely-ratified climate change treaty – the UN Framework Convention for Climate Change (‘UNFCCC’). Through Article 8 of the Paris Agreement, the Parties recognised “the importance of averting, minimizing and addressing loss and damage” and subjected the COP19 Warsaw International Mechanism for Loss and Damage to the authority of the Conference as the main process for enhancing support and knowledge on loss and damage. Notably, “loss and damage” were not defined by the Agreement and the Parties agreed Article 8 does not provide any basis for loss and damage liability or compensation. This is a significant shortcoming because, as argued by developing countries, liability and compensation are necessary to reach climate justice by balancing the inevitable loss and damage developing countries will suffer – not due to their actions, but because of developed countries’ high historical emissions. However, developed countries have opposed accepting liability due to political and financial concerns about accepting responsibility for climate change and the costs of paying compensation. The limited remit of Article 8 is, therefore, a hard-fought compromise which recognises loss and damage’s prominence without giving this concept any legal “bite”.
Promisingly, the Parties to the UNFCCC agreed to create a Loss and Damage Fund to financially support “particularly vulnerable” countries suffering loss and damage at COP27. A compromise is again observed through the phrasing of “particularly” vulnerable, proposed by the developed countries, which narrows eligibility for compensation. This arguably limits the costs involved in the Fund, which likely encouraged the financially fixated developed countries to concede to its creation. Disappointingly, no operational details of the Fund were decided at COP27. Rather, a Transitional Committee was tasked with creating an operational plan for the Fund, including determining the eligibility criteria and the Fund’s sources, ahead of COP28.
Loss and Damage Following COP28
The difficulty of the Committee’s mammoth task was exposed by disagreements on the Fund’s structure throughout COP28. Developed countries argued it should be hosted by the World Bank. Developing countries opposed this, contending that the World Bank, a lending-focused institution with US-appointed presidents, would favour wealthy countries and make accessing funding difficult. The extent of obligations to contribute to the Fund was also contentious, with developed countries resisting strict requirements to provide finance for loss and damage, due to concerns this could involve significant spending.
In an eleventh-hour compromise to produce recommendations for the Fund before COP28, the Committee’s developing country members conceded to the World Bank hosting the Fund and non-binding encouragements to capitalize the Fund as opposed to any concrete legal obligations. This is a regrettable outcome as an independent institution would have been better equipped to ensure the Fund responds quickly to fast-developing catastrophes and is administered with climate considerations at the forefront, rather than being constrained by the World Bank’s already-existing processes. Furthermore, the lack of binding obligations to provide financial contributions means the Fund relies on developed countries’ goodwill, calling into question how effective it will be in gathering funds.
In what has been hailed as a “historic agreement” the UNFCC Parties approved the operationalization of the Fund. Detracting somewhat from this success, early indications suggest the Fund is likely an inadequate response to irreversible environmental damage, as the equivalent of just 0.2% of the loss and damage faced by developing countries was pledged to the Fund at COP28. The serious compromises involved in the Fund’s creation and these disappointing pledges highlight developing countries’ lack of negotiating power because significant climate finance can only be supplied by richer, developed countries who must overcome their concerns about financial liabilities to provide funding. The lack of short-term national benefit involved in providing such subsidies likely dissuades countries from making further pledges. Clearly, the UN loss and damage framework is defined by compromise and financial concerns, rather than the urgent need to address loss and damage. Nevertheless, one hopes the UNFCC Parties, can set aside national apprehensions to make further contributions to the Fund, in recognition of the magnitude of the environmental catastrophe we face.
