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It has become obvious that the continued lack of mitigation ambition and inadequate resources to implement adaptation actions are causing increasing suffering and significant loss and damages of assets and properties in poor 

and vulnerable countries.

 

Research reports and evidence on the impacts of climate change throughout the world suggest that loss and damage associated with the adverse effects of climate change can no longer be avoided through mitigation or adaptation. Therefore, multiple approaches should be taken. Some approaches may have synergies with adaptation efforts, but others will require taking action through new arrangements and stand-alone approaches, which could be referred to as “beyond adaptation” measures. 

 

Following a proposal put forward by the Alliance of Small Island States (AOSIS) in 2008, loss and damage was included on the agenda of UNFCCC negotiations. The COP16 in Cancun, in its decision 1/CP16, decided to establish a Work Program to address the issues related to loss and damage in developing countries in a more comprehensive and actionable manner, with a mandate for the Subsidiary Body of Implementation (SBI) to do this.

 

The draft decision -/CP17, adopted by COP17, invites Parties, relevant intergovernmental organizations, regional centers and networks, the private sector, civil society, and other relevant stakeholders to take into account three thematic areas when undertaking activities aimed at assisting Parties in enhancing their understanding of and expertise on loss and damage. The thematic areas are:

 

Thematic area 1: Assessing the risk of loss and damage associated with the adverse effects of climate change and current knowledge

 

Thematic area 2: A range of approaches to address loss and damage associated with the adverse effects of climate change, including impacts related to extreme weather events and slow onset events, taking into consideration experience at all levels

 

Thematic area 3: The role of the Convention in enhancing the implementation of approaches to address loss and damage associated with the adverse effects of climate change

 

Since then, four regional expert-level workshops under the guidance of SBI, referred to in decision 7/CP17, have been held to generate knowledge, opinion and views on the above thematic areas. These experts’ meetings have delivered progress in understanding the issues and challenges to be incorporated in developing the work program on loss and damage. Though loss and damage is a relatively new issue in the UNFCCC negotiation process, it has progressed well so far, which raises expectations of achieving some tangible outcome at COP18. The expected deliverables of COP18 on loss and damage are:

 

a) Finalization of ongoing work program and comprehensive response to loss and damage.

 

b) Establish a mechanism under the COP to assess diverse risks (both rapid and slow-onset) and approaches for addressing loss and damage, including by rehabilitating and compensating the losses and damage.

 

c) Consider the concept of a “Multi-Window Mechanism” put forward by AOSIS to address Loss and Damage from Climate Change Impacts as a basis for future negotiation on the issues. This Multi-Window Mechanism consists of three interdependent components: a) Insurance, b) Rehabilitation/Compensatory payments, and c) Risk Management component. These three components play different and complementary roles and comprise necessary components of an integrated approach to risk reduction, risk transfer and risk management efforts.

 

d) Establishment of a second phase of loss and damage work program at COP18 and elaborate the function and institutional structure of the international mechanism on loss and damage.

 

Given the context and expectation on loss and damage negotiations, the Subsidiary Body of Implementation (SBI) of the Convention proposed recommendations and a draft decision for further discussion and negotiation by the country Parties. The text raised disappointment among many of the Parties and CSOs as it ignored the critical issues that should be considered to address loss and damage. However, it created a scope of engagement for the Parties to deliver an agreed outcome.

 

While it is important to undertake immediate measures on the three Thematic Areas to address loss damage, the negotiation at COP18 is sidetracking towards knowledge generation alone, that is enhancing knowledge and understanding of comparative risk management approaches, strengthening dialogue, coordination, coherence and synergies among different stakeholders, and capacity building at the national and regional levels to collect and analyze relevant data for assessing the risk of loss and damage—all of these are to be implemented through an invitation to the Parties and relevant institutions outside of the Convention, as the US proposed. However, the key issues of addressing loss and damage such as establishment of a compensatory mechanism in the context of the notion of “beyond adaptation” and addressing the “residual losses” caused by both sudden onset and slow onset events are missing.

 

In the context of slow progress and protracted discussion on loss and damage, it is important to focus on at least on three major issues:

 

First: understanding the risks that will potentially contribute to loss and damage. 

 

Climate change has increased and will intensify risks in two main ways: firstly, global warming leads to change in precipitation and weather patterns generally, threatening agriculture and food security. And secondly, an increased number of climate-induced sudden onset disasters (such as cyclones, floods, river bank erosion, and increased tidal surges) and slow onset disasters (such as drought, salinity ingress, ocean acidification, and increase of sea surface temperature) will result in both economic and non-economic loss and damage. These are in the form of destruction of livelihoods, infrastructure, habitat, loss of territories, crop production, natural resources and ecosystem services, among others, and will eventually cause displacement and migration.

 

Many studies suggest climate change is causing an increase in the frequency and intensity of prevailing disaster events and triggering new forms of these events. As these events are becoming unique and dominant for a particular region, the SBI takes the view that both extreme events and slow-onset events will be considered as potential risks to loss and damage.

 

It is likely that loss and damage resulting from slow-onset events will be different from sudden-onset events, in that it will cause more indirect loss over a longer time period. It is more crucial that there is more emphasis on slow-onset events, to which the current negotiation text gives little attention.

 

Second: approaches to address loss and damage.

 

The approaches to address loss and damage discussed so far could be framed under three broad categories; a) risk reduction by comprehensive disaster risk management and adaptation; b) risk transfer by introducing insurance mechanism; and c) rehabilitation/compensatory mechanisms for unavoidable loss and damages.

 

In line with the Second Thematic Area (to explore range of approaches to address loss and damage), the ongoing negotiation at COP18 invites Parties to identify options and designing and implementing country-driven risk assessment strategies and approaches, including risk transfer and risk-sharing mechanisms such as insurance, and also invites implementing climate risk management approaches, while the approaches under a third category (rehabilitation/compensatory) are grossly disregarded, especially by the developed country Parties.

 

Though there are wide ranges of approaches to reduce and address disaster risks, these are mostly sudden onset disaster-centric, with no approaches so far for addressing slow-onset events like ocean acidification, salinity intrusion, loss of ecosystem services or loss of economic preferences etc. On the other hand, insurance may not be helpful to transfer risks in many vulnerable countries; it will merely create business opportunities for the insurance companies. 

 

Approaches to address loss and damage require an integrated approach of risk reduction, risk transfer, risk management and rehabilitation/compensatory mechanisms to support unavoidable and un-insurable losses. Ignoring any category of the approaches may not be supportive to address loss and damage in a holistic manner.

 

Third: establishment of an international mechanism under the convention.

 

Currently, there is no international stand-alone mechanism to address the issue in a holistic manner. The G77/China pushed for a decision under the SBI “to establish an international mechanism to address adverse impacts of climate change, which complements existing arrangements for adaptation actions by developing country Parties, especially the least developed countries and small island developing States and other developing countries particularly vulnerable to the adverse effects of climate change”.

 

However, the US wants to put all the loss and damage-related issues under the Adaptation Committee and NAPs, while agreeing that “all the impacts of climate change could not be addressed only by adaptation and we have to send a strong signal to the global leaders to think beyond this”. The US also urged to make strong cases of “unavoidable” and residual loss and damage of the impacts of climate change so that a stand-alone mechanism could be established.

 

This means that a different and stand-alone mechanism will be required, one which will be complementary to the national adaptation actions. But there is still the potential of unavoidable loss and damage. Thus we have to explore “adaptation plus” mechanisms, institutions and opportunities to address unavoidable loss and damage.  ###

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