UNFCCC Pre-COP: Restoring faith needs proactive agenda on loss and damage

The United Nations Secretary General’s Climate Action Summit in New York was designed to be a high-level political event which drew attention to the state of global ambition. Precious little national ambition was on display.

Yet, in a perverse way, the unflattering spotlight trained on political irresponsibility fully justified the exercise. Youth-led demonstrations and angry declamation captured more headlines than celebrity politicians. Anger and disappointment represented the most appropriate emotional responses to the non-announcements in New York.

However, the lack of ambition was predictable, the cumulative effect of stumbles across the scientific, rules and political tracks established by the Paris Decision of 2015. Avoiding further shaming by precocious children requires continuing the sober-minded work along those tracks, albeit with a heightened sense of collective responsibility.

That work resumes with the pre-COP, a three-day negotiators’ meeting currently underway in Costa Rica. On the agenda are multiple issues which need final resolution at this year’s COP (scheduled for December 2-13 in Santiago, Chile).

Those include rules on carbon markets, scaling up climate action, and a review of the Warsaw International Mechanism (WIM) for Loss & Damage.

Negotiations on carbon trading have blown past their original deadline, largely because of the continuing concern that markets are being gamed to avoid ambitious mitigation.

Political discussions around hitting mitigation targets will have to pick up the pieces after the New York summit — it is not clear what the plan is on this front. In contrast, the WIM process is technically on track. That progress, however, is undermining the original promise of a truly radical proposal.

The WIM was set up six years ago at COP 19 to “address loss and damage associated with impacts of climate change, including extreme events and slow onset events in developing countries that are particularly vulnerable to the adverse effects of climate change”.

Two years later, Article 8 of the Paris Agreement installed loss and damage as a third pillar of climate policy.

This year, the COP will formally review the performance of the WIM, as scheduled. The review will be based on a technical paper prepared by the Secretariat (with input from Parties and observers).

In the section reviewing the sources of finance relevant to addressing loss and damage, that paper states, “Current assessments [of climate finance] … do not yet specify a portion related to residual impacts either explicitly or implicitly. This necessitates a reliance on proxy indicators to be approximated.”

The proxy indicator used by the paper is the availability of adaptation finance. This gets at a key disagreement – vulnerable countries want loss and damage to be financed distinctly from adaptation, while certain developed countries insist that it is covered under adaptation finance.

The cost of adaptation in developing countries is estimated to rise to $280-500 billion per year by 2050. Loss and damage estimates dwarf even that intimidating figure — some integrated assessment models indicate $1.1-1.7 trillion each year of residual damage in developing countries by 2050.

In contrast, the Paris Decision commits developed countries to $100 billion per year to finance mitigation and adaptation in developing countries. That falls so short of the scale of the need that categorisation debates seem cynical and meaningless. Yet, the WIM’s failures are not wholly down to the cynicism of some developed countries.

As with many paradigm-shifting initiatives in the climate space, the demand to address loss and damage originated with small island states. In general, it covers climate impacts which cannot be adapted. Its mainstreaming in the Paris Agreement should have been a signal for larger developing states to invest in monitoring and methodologies to define, distinguish and quantify loss and damage.

Work should have also begun on national legal frameworks to establish attribution for climate-induced loss and damage, and ensure compensation to the most vulnerable within their own jurisdictions.

Juxtaposed with evolving norms in the developed world, this would have enabled developing countries to make a stronger case for quantified climate reparations. This work has now belatedly begun, with the government of India hosting a national consultation on loss and damage earlier this year.

Naturally, initial discussions focused on the technical challenges in defining loss and damage, so it is unlikely that a strong demand will emerge in time for the COP.

While a loss and damage fund is needed, it is not the only mode of cooperation available. The WIM’s mandate includes support in the form of technology and capacity building.

In particular, weather and climate forecasting should be a critical area for technological cooperation and transfer at the United Nations Framework Convention on Climate Change (UNFCCC). Projected to be a $3.3 billion per year market in the next five years, forecasting is starting to pose a challenge even for developed governments. 

Forecasting systems are only as good as the data they are fed. In a changing climate, obsolete weather data infrastructure anywhere increases the risk of miscalculating the impact of an extreme weather event everywhere.

Upgrading developing countries’ technology and capacity will be an investment in global climate resilience. Moreover, the international weather data sharing cooperation, which defined the last century, is being threatened by privatisation.

This throws up equity concerns ill-suited to resolution at the World Meteorological Organization, which should be of immediate concern to climate negotiators. 

A more controversial area of discussion is insurance. Developed countries are eager to expand insurance markets in the developing world. Many developing country governments are similarly enthusiastic.

For example, the Indian government’s crop insurance programmes and similar schemes across the global south. However, there are significant equity concerns with this approach.

Crop insurance in India is currently working to the benefit of private insurers rather than farmers. More broadly, insurers in developed countries stand to benefit from a climate crisis which they contributed to creating.

That crisis is finally hitting close to home — insurers are increasingly committing to divest from carbon-intensive industries based on long-term risks to their business models.

Yet, for insurance to gain acceptance in the loss and damage sphere, there must be some form of contribution by developed countries. This may take the form of a subsidy for vulnerable communities to purchase insurance.

It may also take the form of a risk-pooling mechanism, such as the one implemented in the Caribbean. Implementing any of these approaches requires initiating a process to develop rules and governing bodies, which should be top of the agenda in Costa Rica and Chile this year.

Creating a proactive programme for the WIM is a challenge. It will require governments, particularly those of developed countries, to accept moral responsibility for climate-induced devastation at home and abroad.

It will require leading developing country negotiators to present a narrowly-focused vision for how that responsibility can be discharged. It is a challenge worth taking on — more than any other agenda item, loss and damage offers the UNFCCC process an opportunity to signal desperately needed empathy with the most vulnerable.