Climate loss and damage: practical action

1 Introduction

The purpose of this report is to increase shared understanding and to provide guidance for mobilising funds and taking the urgent actions needed to address loss and damage. This report synthesises examples of practical action and analyses key issues for addressing loss and damage. It considers mobilising finance from conventional public and innovative sources, as well as emerging approaches to assessing needs and delivering actions. The report also focuses on the intersectional and gendered aspects of economic and non-economic loss and damage. These actions are necessary now because climate change impacts and risks are affecting most those who have done least to cause them.

The COP27 decision to establish a Loss and Damage Fund and to establish a Transitional Committee under the UNFCCC^[4] was widely welcomed. The evidence presented here is relevant to the work of the Transitional Committee in developing recommendations to carry forward the decision made at COP27 to establish new funding arrangements for assisting developing countries that are particularly vulnerable to the adverse effects of climate change.^[5]

In October 2022, the Scottish Government with the UN Climate Change High Level Champions and the Global Resilience Partnership (GRP) convened a Loss and Damage Conference^[6] in Edinburgh, Scotland, to share learning and approaches. At the Conference delegates from all over the world contributed expertise and evidence in lively and positive discussions.

During the Conference Scotland's First Minister Nicola Sturgeon pointed out the impossibility of upholding human rights without addressing loss and damage. Chair of the Elders, Mary Robinson, has stated that human rights should be at the very centre of climate change discussions.^[7] And E3G have referred to the "moral blight" of unaddressed loss and damage.^[8] So, the global system now must rise to the challenge of addressing the global public "bad" that is loss and damage.

The Conference raised the need to act urgently to mobilise and channel finance to where it is needed. Conference participants discussed that climate finance for loss and damage should be new, additional, adequate and sustainable to meet new, additional and escalating needs. Some participants emphasised the importance of grant-based finance being made available to address loss and damage in the most vulnerable countries (least developed countries and small island developing states), so it is not burdensome nor creates further indebtedness for recipient countries and communities.

The Conference also discussed how finance for loss and damage could come from a wide range of sources and support a mosaic of solutions, but that a public finance floor is required to ensure that the needs of the most vulnerable are covered.

A summary report of the Conference proceedings was launched at COP27.^[9] This report builds upon the summary report, presenting further case study evidence and additional analysis for policy and action which can be used to inform decisions on how to take forward the outcomes from COP27 related to Loss and Damage. The report does not represent the views of the Scottish Government. Rather it brings together a range of experiences and analyses to inform and guide practical action for addressing loss and damage.

1.1 Defining loss and damage

Loss and damage includes devastating economic and non-economic losses, including forced displacement and impacts on cultural heritage, human mobility and the lives and livelihoods of local communities. The Inter-governmental Panel on Climate Change (IPCC) Working Groups II and III and the IPCC's Sixth Assessment Report^[10] provide scientific evidence of the scale and severity of impacts and risks of losses and damages.

Definition of what addressing loss and damage is (and is not) helps to assess and map the landscape of relevant actions. This is discussed in Section 5 of this report on Landscape Analysis. The definition provided by Mace and Verheyen^[11] has gained recognition as it separates out climate adaptation from addressing loss and damage. They state that "Addressing loss and damage … refers to actions dealing with the residual, adverse impacts of climate change which remain after mitigation and adaptation measures have been adopted." This definition in large part concurs with the mitigation/adaptation/loss and damage continuum developed by Julie-Anne Richards.^[12] The continuum of actions is discussed in Section 3.2.2 on Delivering Actions. Implicit in these definitions is that residual adverse impacts result where climate adaptation is, not implemented, or when adaptation implementation is not effective in minimising risks and impacts. The less effective adaptation is, the greater the likelihood of losses and damages occurring. This is the technical part of what is referred to as the "adaptation gap".^[13]

Loss and damage measures address impacts that have happened, or are expected to materialise. Actions to address loss and damage are not expected to prevent these impacts altogether.

A coherent national policy framework is key to providing an effective enabling environment for addressing loss and damage.^[14] The Nepal framework on Climate Change Induced Loss and Damage^[15] published in October 2021 is the first example of a national framework anywhere. The inclusion of loss and damage in the Vanuatu Revised and Enhanced 1^st National Determined Contribution (2021-2030)^[16] also sets a great precedent in identifying actions to address loss and damage at a country level (see case study 2). This report seeks to provide relevant practical lessons on ways to address loss and damage that are coherent with these and other emerging policy frameworks.

1.2 Loss and damage decisions and outcomes at COP27

Grave concerns have been expressed by all Parties^[17] to the UNFCCC on the growing gravity, scope and frequency in all regions of loss and damage associated with the adverse effects of climate change, and regarding the adequacy and effectiveness of responses that are now necessary.^[18]

The G77 plus China (a large negotiating group of the most climate vulnerable countries)^[19] proposed that finance for loss and damage be a sub-agenda item under the Finance agenda of COP27. Following provisional acceptance by the COP27 presidency, Parties decided to incorporate finance for loss and damage on the COP agenda for the very first time in Sharm El-Sheikh, with the caveat that it would not be used for liability or compensation.

Terminology in a legal process such as the UNFCCC can be opaque, but this language is important in shaping the actions of the global community and therefore requires careful consideration. Box 1 describes important parts of the terminology on loss and damage in the UNFCCC.

With the agenda item agreed, developing countries and aligned civil society groups demanded a substantial outcome on Loss and Damage at COP27. This was achieved in terms of Parties agreeing to establish a fund on loss and damage as part of broader funding arrangements, or the "mosaic of solutions", both inside and outwith the UNFCCC. The adopted decision^[20] under the new agenda item establishes new funding arrangements for assisting developing countries; a fund for responding to loss and damage whose mandate includes a focus on addressing loss and damage; and, a transitional committee to undertake work and make recommendations for the operationalisation of the funding arrangements and the fund.

Box 1 Loss and Damage terminology used in UNFCCC decisions

The UNFCCC uses the term "avert" to refer to reducing greenhouse gas emissions and thereby avoiding climate impacts. "Minimise" climate impacts refers to adaptive measures. With regard to measures for loss and damage we can note the differentiation between "responding" – i.e., to react in response. Meanwhile, "addressing" is to deal with a threat and suggests a comprehensive remedy to a harm that has been caused.

The original agenda item proposal from the G77 and China at COP27 referred to "addressing" loss and damage. The agreed agenda item referred to "responding" and added "including a focus on addressing loss and damage". It is understood by climate negotiators that by "responding" Parties will act in solidarity to assist those suffering loss and damage and offer help – a weakened outcome as compared to the more comprehensive "addressing."^[21] Developing countries have continually stressed that actions must focus on addressing loss and damage. It is positive that, "a focus on addressing" was included in the agenda item, however, it is in the context of "responding" to loss and damage.

There was also agreement on the modalities of operation for the Santiago Network for Loss and Damage (SNLD) and a process decided for selecting the host organisation. Parties decided that the SNLD will have: a hosted secretariat that will facilitate work; an Advisory Board to provide guidance and oversight; and, a network of member organisations, bodies, networks and experts (OBNEs) to include representatives from three recognised UNFCCC constituencies: Women and Gender, Youth, and Indigenous Peoples.

Not all proposals by groups of Parties were successful. Efforts by some to integrate loss and damage into the New Collective Quantified Goal on climate finance (NCQG)^[22] were unsuccessful.^[23]

1.3 Structure of the report

Section 1 introduces the report, sets out what loss and damage is considered to be in broad terms and discusses the decisions on Loss and Damage reached at COP27.

Section 2 provides an overview of practical lessons on mobilising public sector finance for loss and damage and innovations in finance provision.

Section 3 looks at assessing loss and damage needs and delivering loss and damage interventions.

Section 4 discusses the key topic of non-economic loss and damage and indicates what needs to be learned in order to address these impacts.

Section 5 discusses the results of a process to map the loss and damage landscape.

Section 6 presents a set of solutions identified from the evidence gathered in the report and proposes a set of insights relevant to mobilising funds and delivering interventions to address loss and damage.