22nd September 2023
What is ‘Loss and Damage’?
Christian Aid provides the following definition:
“Loss and damage’ is a term used in UN climate talks to refer to the consequences of climate change that go beyond what people can adapt to. Like when extreme droughts turn farmland into dust. The climate crisis is affecting vulnerable communities around the world. People are losing their homes and their livelihoods right now.
“Some of the loss and damage that’s occurring can be measured in economic terms, such as impacts on farming or tourism – but the loss of lives or the trauma of having to migrate from your ancestral home is much harder to quantify, and even more devastating.
“’ We can’t adapt to the loss of our cultures, the loss of our identities, the loss of our histories. We can’t adapt to extinction or to starvation. We cannot adapt to loss and damage.’ – Vanessa Nakate (2022)” (1b) Vanessa Nakate is a Ugandan climate activist who was appointed a UNICEF Goodwill Ambassador in 2022.
Data from Christian Aid suggests that for the year 2022, extreme climate events in South Africa (flooding), Pakistan (flooding), the Caribbean(tropical cyclone) and Brazil (drought) caused damage costing in excess of $15.5 billion (1). In addition there were ‘smaller’ climate events plus the ongoing year by year degradation of farming and industrial output in many countries. Christian Aid’s 2022 report, ‘The Cost to Africa’, “suggests GDP per capita in African states is 13.6% lower than if there had been no global heating between 1991 and 2010. This trend is predicted to continue. If governments globally meet their target of limiting global heating to 1.5 degrees above pre-industrial levels, by 2100 the average hit to GDP in African states will be 34%. If we do not meet our targets and keep on current trends, it could be a hit of 64%.” (2)
Western nations have not been exempt from costly extreme climate events. In 2022 drought and storms in Europe, floods in Australia and hurricane Ian in the USA caused in excess of $130 billion of damage (1). It should be noted that as western nations have more and higher quality infrastructure, the cost of any physical damage is always going to be high, whilst at the same time more will be covered by insurance policies.
What is particularly unjust, is that the climate change causing all these extreme weather events arises largely from the carbon emissions of the the highly industrialised countries, but inflicts most damage on the poorest least responsible countries. A report in the Guardian notes “The entire continent of Africa is responsible for less than 4% of historic global emissions, yet African people are bearing the brunt of the climate crisis”. (3) This injustice is compounded because these two groups of nations are not facing the climate crisis from a level playing field. “When Germany experienced terrible flooding in 2021, the government was able to instantly mobilise €30bn (£26bn) to pay to rebuild the towns and infrastructure that had been decimated by the flood. In contrast, Pakistan has had to rely on an UN emergency appeal that is only 34% funded. Mozambique was forced to take out an IMF loan to help pay for recovery following Cyclone Idai in 2019, pushing the country further into debt distress”. (3)
Christian Aid’s Africa Advisor Joab Okanda, based in Kenya, explains: ‘The roads that we’re building from borrowed loans are being washed away and we have to repay these loans, our people are having to endure austerity measures because our government has to rebuild schools and roads, people are going to bed hungry.'(2)
For some years there has been a call for the establishment of a Loss and Damage fund to cover the costs being incurred by the most vulnerable nations. In November 2022 United Nations Climate Change Conference COP27 made a breakthrough agreement to provide a “loss and damage” fund for those vulnerable countries hit hardest by climate disasters. Governments then agreed to establish a ‘transitional committee’ to make recommendations on how this new fund would operate and how it would be funded. Their recommendations will be brought to COP28 for approval.
What is the likely size of this proposed Loss and Damage fund?
Research carried out by Christian Aid (and used by the Government in their research briefing ‘Climate Change: “Loss and Damage” Fund’) estimates that “the UK should provide 3.5% of the total global effort in addition to reaching net zero domestically…Applying this percentage to the forecast loss and damages costs in 2030 equates to $10bn at the lower bound of $290bn or $20bn at the upper bound of $580bn ….’ (4)
Of course what the total cost of damage is in 2030 will to some extent depend on how rapidly, how assiduously, all governments and companies, work towards rescuing their carbon emissions. The current IPCC target is that we should have at least halved our emissions by 2030. Hence the inclusion in Christian Aid’s report that the UK also needs to achieve its net zero targets.
What might the Loss and Damage fund pay for?
Christian Aid suggests: the fund could provide money:
- towards rebuilding homes flattened by floods or cyclones
- to enable people to relocate when rising sea levels make it impossible to stay where they are
- for people who can no longer farm (because the rains have stopped in consecutive years) to retrain and secure alternative livelihoods
- to rebuild roads and bridges without having to take out expensive loans” (5)
The last point is a reminder that money that goes into the Loss and Damage fund should not be existing money that has simply been re-labelled. Vulnerable countries may well be receiving money from other funds/ loans/ financing deals with which to build new road, new roads, sea walls etc as part of enabling the development of such countries. Such development funds are not the same as loss and damage funds. The latter is very specifically there to fund rebuilding or retraining or relocating projects where infrastructure and resources have been damaged by extreme climate events. It also important that money paid out through the Loss and Damage fund, is paid in the form of a grant and not a loan. (If our home was flooded, we would not expect our insurers to loan us the cost of repairs!)
Christian Aid highlights another possible area of confusion, that of “the difference between loss and damage finance and international climate finance”
“International climate finance (ICF) is intended to support countries to transition to low carbon economies and to adapt to climate impacts. It is often associated with the target to mobilise $100 billion a year for developing countries. Whereas the calls for loss and damage financing are related to the irreversible costs of climate impacts, beyond what can be adapted to”. (5)
How might the UK Government finance its contribution to the Loss and Damage fund?
It is unlikely that this will come from existing funds. The Government has already been criticised for failing to make $300m (£260m) of promised climate finance payments. The UK missed its September 2022 deadline to provide $288m to the Green Climate Fund (GCF) and failed to fulfil a separate $20.6m pledge to the adaptation fund (6). Since then the government has drawn up plans to drop the UK’s flagship £11.6bn climate and nature funding pledge (7).
More realistically, the Government will need to find new sources of finance – ie through taxation.
Christian Aid suggests three options.
- A national net wealth tax: a rate of 0.5% levied on wealth in excess of £1m could raise £15bn
- A permanent tax on the profits of fossil fuel production could also raise £15bn
- A combination of an air passenger levy (eg a frequent flyer tax) and an expansion of the Emissions Trading Scheme levy and/or Financial Transactions tax or of the Energy Profits levy could likewise raise £15bn. (8)
All three options would place the burden on those who pollute, even option 1, for it is well documented that those who are wealthiest have the largest carbon footprints. (9) This approach is reflected in the theme of this year’s Loss and Damage Day, 23rd September, “Make Polluters Pay”.
1 (https://www.christianaid.org.uk/sites/default/files/2022-12/counting-the-cost-2022.pdf
(1b) https://www.christianaid.org.uk/get-involved/campaigns/climate-change/loss-and-damage-faqs
4 https://www.christianaid.org.uk/sites/default/files/2023-05/the-loss-and-damage-fund_may-2023.pdf
5 https://www.christianaid.org.uk/get-involved/campaigns/climate-change/loss-and-damage-faqs
8 https://www.christianaid.org.uk/sites/default/files/2023-05/the-loss-and-damage-fund_may-2023.pdf
9 for example re the UK see https://www.theguardian.com/environment/2022/nov/01/polluting-elite-enormous-carbon-dioxide-emissions-gap-between-poorest-autonomy-study?CMP=Share_iOSApp_Other
For a reflection on last year’s lectionary readings that tie in with the theme of Loss and Damage see – https://greentau.org/2022/09/18/proper-20/
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