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Experts from the Global South welcome the loss and damage facility fund, but are sceptical about how it will operate. Will it meet the same fate as the earlier commitment to climate finance signed during the Paris Agreement?
by Anjal Prakash, Anna Stewart Ibarra and Emma Archer, PLOS Climate editors
Across the Global South, countries and communities are being forced to cope with catastrophic climate events, including extreme weather events and slow-onset events, that are becoming more frequent and severe. These climate impacts are being driven by greenhouse gas emissions that have come overwhelmingly from the industrialised Global North, leading to calls for countries in the North to provide finance for responding to the significant loss and damage (L&D) being experienced in the South.
“South America, one of the most urbanised regions of the world, has increasingly experienced L&D to human settlements because of intense and recurrent floodings, urban heat waves, landslides, and ecosystems services degradation,” said Dr Mercy Borbor-Cordova, lead author of the IPCC AR6 WGIII report and researcher at the International Pacific Center for Disaster Risk Reduction at the Escuela Superior Politecnica del Litoral, Ecuador. “Given the impacts health, livelihoods,infrastructure, and the well-being of the most vulnerable populations, it is urgent to invest in climate resilience in the region.”
“Africa has already experienced widespread L&D in key development sectors attributed to human-induced climate change. These include reduced food production, water shortages, reduced economic output, loss of biodiversity, and loss of lives”, said Dr Edmond Totin, coordinating lead author of the Africa Chapter of the IPCC’s AR6 WGII report and an Associate Professor at the Ecole de Foresterie Tropicale, Université Nationale d’Agriculture du Benin.
In this context of mounting climate impacts across the Global South, the UNFCCC’s Conference of Parties (COP) met during its 27th Session in Sharm el-Sheikh, Egypt, in November 2022. One of the most significant outcomes of COP27 was the inclusion of L&D on the agenda for the first time. After 40 hours of intense negotiations, way past its original scheduled time, the creation of a fund for L&D was announced after 195 nations agreed to this resolution.
Many consider this announcement as an historic moment. “Finally, the light of climate justice is seen for all those harmed by the most devastating effects of climate change,” said Dr Evelia Rivera, professor at the EPOMEX Institute, Universidad Autónoma de Campeche, and author of the IPCC AR6 Special Report on the Ocean and Cryosphere in a Changing Climate.
Dr David Smith, Coordinator of the Institute for Sustainable Development of The University of the West Indies, is working to address the impacts of climate change in small island developing states (SIDS) in the Caribbean. He states, “If properly implemented, the fund could be important in helping Small Islands meet their development goals.” Smith notes the importance of considering L&D due to “slower-moving events like droughts and high temperatures, which also have profound economic effects,” in addition to extreme events, like tropical storms, which have devastating acute impacts in Caribbean SIDS. He emphasises that the degradation of local ecosystems will result in significant economic losses for the tourism-based economies of SIDS. “Many tropical countries will be badly affected by the likely loss of 70-90% of tropical coral reefs. Coral reef ecosystems underpin tourism, the mainstay of many small island economies.”
Loss and Damage Facility – the devil may lie in the details
Could the creation of the fund for L&D really be a turning point in the world’s response to the climate crisis? COP27 may have brought that fund one (big) step closer, but the devil lies in the details. Islamabad-based Regional Lead for South Asia and the Middle East for the NGO Climate Analytics, Mr Fahad Saeed, says that Pakistan has experienced unprecedented floods this year, and he is hopeful that the L&D facility funds will be helpful for a country like Pakistan that has lost many lives during the flood. “During the COP,” he says, “Pakistan was chair of the G77 group and provided leadership on the issue of L&D. Although the decision on the L&D facility is widely seen as one of the biggest outcomes of COP27, some people are still waiting to see the details to comment further. The actual provision of this funding seems to be out of the remit of UNFCCC, which is making some people uncomfortable. However, the funding, if instituted, will help countries like Pakistan in rebuilding itself.”
Welcoming the agreement on the L&D fund facility, Dr Chandni Singh, IPCC lead author and senior researcher at the Indian Institute of Human Settlement said: “The evidence is clear – L&D are already happening at 1.1°C of global mean warming. In India, these are both material and non-material; for example, crop losses due to the March-April 2022 heatwaves and associated psychosocial stress. We also know that there are limits to adaptation, which will not be the same for everyone.” This last point is vital; the L&D fund must be accompanied by wider changes to global finance systems that both increase adaptive capacities and recognise the limits to adaptation.
Could the basis for international L&D funding eventually go further than the voluntary nature of the fund agreed in Sharm el-Sheikh? “The good news in COP 27 for SIDS and other developing states is the agreement on a fund for L&D, which, as UN Secretary General Guterres stated, is an important step towards climate justice,” said Dr Michelle Scobie, Senior Lecturer in International Law, Global Environmental Governance at the Institute of International Relations at The University of the West Indies and contributing author to the IPCC AR6 WGII report chapter on Oceans and Coastal Ecosystems and their Services. “Some justice advocates are hopeful that, eventually, financing responses to climate impacts in developing states will consist not only of voluntary aid, but funding associated with a legal liability for compensation for climate impacts caused by the major historical emitters.”
Availability of climate finance at the grassroots: do we have the capacity to implement it?
The creation of a fund for L&D is one thing; implementation on the ground is quite another. Shiraz A. Wajih, President of Gorakhpur Environmental Action Group, a grassroots NGO, is working in the flood plains of the northern Indian states of Bihar and Uttar Pradesh. He shared his experience with the availability of climate finance at the grassroots. “If we go down to the taluka (sub-district) or the village level, we see that the availability of climate finance is inadequate. We know that if financing were available and the right structures were in place, we could deliver climate-resilient development at this scale. The challenge is that the government department does not have the capacity to do this.” Even where schemes have been nominally established, there may be shortcomings in community engagement and education, Wajih observes. “Crop insurance has been given as an alternative. About 90% of the people do not even know that their crop has been insured, and among those who know, accessing this during crop failure has been challenging. This issue is a major challenge, especially for women farmers”.
Agreement on the L&D fund is, to conclude, a major achievement of COP27. It provides, for the first time, a financial mechanism to address the climate injustices lived by communities in the Global South. However, major challenges lie ahead in securing sustained and sufficient funding from the North, and in implementing the funding through the diverse institutional and governance structures and capacities of the Global South. However, research on L&D and the field of implementation science can help to guide this process, including creating enabling environments for practical implementation. Learning from better practice in this area from similar non climate change case studies may have value.