Should developed nations pay reparations for  ‘loss and damage’ from climate change?

At the last UN climate summit in 2021, COP26 in Glasgow, a group of largely developing nations representing six out of every seven people in the world called for developed countries to commit to pledging funds for loss and damage. However, this call faced opposition from large Western economies particularly the US and EU – and, ultimately, was rejected because of this opposition by the rich West. 

The issue of loss and damage has been discussed for more than 30 years, and it is likely that loss and damage will be one of the dominant themes at COP27, the next round of UN climate negotiations taking place in Egypt in November this year.

This year thousands of people have died as a result of unprecedented extreme weather events. Catastrophic flooding has caused at least 1,500 deaths in Pakistan in recent weeks, while record heat has blighted much of the globe – and, for example, killing 1,000 people in Portugal and Spain in July.

The loss of human lives in extreme weather events is the most visceral example of “loss and damage”, a term used to describe how people – particularly the poor and vulnerable – are already reeling from the impacts of human-caused climate change, which is predominantly driven by the emissions of a wealthy, mostly Western, minority.

From the loss of low-lying island territory to rising seas through to homes and businesses destroyed by cyclones, loss and damage from climate change is already vast and far-reaching.

Below we reproduce edited extracts from Carbon Brief explaining on what loss and damage is, who is responsible and how it should be paid for. We recommend reading the entire piece at https://interactive.carbonbrief.org/q-a-should-developed-nations-pay-for-loss-and-damage-from-climate-change/


What is loss and damage?

“Loss and damage” is a term used to describe how climate change is already causing serious and, in many cases, irreversible impacts around the world – particularly in vulnerable communities.

Prof Saleemul Huq, the director of the International Centre for Climate Change and Development (ICCCAD) says:

“The term loss and damage means the impacts of human-induced climate change affecting people around the world. Damage refers to things that can be repaired, like damaged houses, and losses refer to things that have been lost completely and won’t come back – like human lives.”

Ineza Umuhoza Grace, a Rwandan activist and director of the Loss and Damage Youth Coalition (LDYC), adds:

“We are losing infrastructure, losing our agricultural land – and losing what we can call a hope of having sustainable economic growth and a future for everybody.”

At UN climate talks, the term is used by nations and organisations arguing for developed, high-emitting nations to be held responsible for losses incurred in poorer regions, which are the least responsible for climate change. (Because of this, the term “loss and damage” is sometimes described as meaning “climate reparations”.)

These groups have called for the creation of a “loss and damage finance facility” – a fund paid by large emitters to assist vulnerable people dealing with loss and damage caused by climate change.

They argue this is needed because money pledged towards tackling climate change is currently only directed towards either efforts to reduce greenhouse gas emissions (“mitigation”) or adaptation measures to protect against rising warming impacts.

Neither stream of funding is specifically designed to give aid to those who have experienced loss from climate change, such as the loss of a loved one in a heatwave, or damages, such as damage to property or agricultural land in a cyclone.

Loss and damage can be caused by immediate climate impacts, such as more intense and frequent extreme weather events, as well as impacts that gradually worsen over time, such as sea level rise and the retreat of glaciers.

The study of how climate change is affecting the likelihood and severity of extreme weather events is known as “attribution science”. See Carbon Brief’s link to its detailed interactive explainer here.

Low-lying Coastal village Ngela Island, Solomon Islands.

According to the Intergovernmental Panel on Climate Change (IPCC) loss and damage can broadly be split into two categories:

  • Economic losses involving “income and physical assets”,
  • Non-economic losses, which include but are not limited to “mortality, mobility and mental wellbeing losses”.

It says that the “overall adverse economic impacts” of extreme weather events and slow-onset events, such as sea level rise and glacier loss, have so far been detected in industries including agriculture, forestry, fishery, energy and tourism – and through the loss of outdoor labour during climate extremes.

separate UN report from the World Meteorological Organization published in 2021 found that economic losses from climate and weather disasters have increased sevenfold over the past five decades.

Who is most vulnerable to loss and damage?

Not all countries are affected equally by the impacts of climate change. The chart below shows the average number of people affected by extreme climate-related events per 1,000 in the 20 lowest (blue) and highest (red) income countries, over 1990-2019.

The most severe climate impacts are often faced by people in the least wealthy countries – who generally have the smallest contributions to global emissions. As such, loss and damage has become an important issue in discussions of climate justice.

The economic impact of climate change is determined by both the severity of the impacts and the vulnerability of local communities, which can be exacerbated by unrelated factors such as poor governance and lack of investment.

Small island nations are said to be “on the frontlines of climate change” due to a combination of severe climate impacts and inadequate adaptation funding, which makes them highly vulnerable to climate impacts such as flooding.

As such, small island developing states are already suffering some of the greatest economic losses from climate change. The chart below shows the 20 countries with the highest economic losses from extreme climate-related events over 1990-2018, as a percentage of GDP. Small island developing states are shown in dark blue.

By 2100, a central estimate of more than 100 metres of shoreline retreat is projected for all small islands under both mid and very high emission IPCC scenarios. This would be a great threat to many small island nations, which could lose some islands completely as a result of sea level rise.

Small-island developing nations are calling for greater action on loss and damage at COP27.

Small island nations are not the only countries pushing for greater emphasis on loss and damage. For example, Africa and the Middle East – which contain some of the poorest nations in the world – have become increasingly vocal in recent years about the impacts of loss and damage in their countries, as well as the need for richer countries to assist with loss and damage finance.

Who is responsible for loss and damage?

Who bears responsibility for loss and damage is a question right at the heart of debates surrounding the issue.

For many of those calling for the world to establish a loss-and-damage fund at UN climate talks, it is developed nations – who are among the largest emitters since the start of the industrial era – that should be held responsible. Prof Saleemul Huq tells Carbon Brief:

“Loss and damage is directly attributable to the fact that we’ve raised global mean temperature by 1C because of the emissions of greenhouse gases that have taken place since the industrial revolution. The major emitters of those greenhouse gases have a responsibility to compensate the victims of the impacts of climate change.”

These groups – including the “G77 plus China” coalition of 134 developing countries and China – argue that the idea of developed nations being responsible for loss and damage is in line with the principles of the UN Framework Convention on Climate Change (UNFCCC), the global treaty for tackling climate change established in 1994.

The convention specifically “puts the onus on developed countries to lead the way” on climate change, the UNFCCC website says, acknowledging that these countries are the “source of most past and current greenhouse gas emissions”.

The UNFCCC is the ultimate international body that needs to deal with this question. But, at past UN climate talks, wealthy parties such as the US and the EU have blocked moves that could have led to them being held responsible for loss and damage.

As nations continue to clash over proposals (basically along Noerth-South lines) for a loss-and-damage finance facility, the Glasgow dialogue, established at COP26 in 2021, is one mechanism for countries and experts to “discuss the arrangements for the funding of activities to avert, minimise and address loss and damage”.

The dialogue, which began in June 2022, was viewed as a compromise after developing countries called for a new loss-and-damage finance facility at COP26. Small-island nations made it clear that they wanted the dialogue to culminate in such a facility being established.

‘Climate Reparations Now’ placard during the demonstration in London. Thousands of people marched from the Bank of England to Trafalgar Square as part of the Global Day of Action For Climate Justice, during the COP26 climate change conference.