Loss and Damage: a possible agreement?

When reporters file their final pieces tomorrow, you can almost guarantee that every story will discuss the drama and implications of the loss and damage negotiations over the last two weeks at the UN climate talks.

Credits: UNFCCC.

On its 5th birthday, The Warsaw International Mechanism for Loss and Damage has been locked in a bitter struggle around its next steps, and whether it should remain a toddler in the climate talks, or progress into adolescence with additional financial and capacity building elements. Here’s a step – by – step guide to the gradual progress and challenges that have come up in the last two weeks.

Step 1 of the process at the UN climate talks this year was its 5-year review, which has moved relatively smoothly; “we have a decision text, which is still negotiating the final details and the revision of the mechanism itself, said the main negotiator of Costa Rica for Loss and Damage, Pascal Girot.

Loss and damage are considerate extreme events as floods, droughts, hurricanes, increase sea level. But also included slow onset events such as increasing temperature, desertification, loss of biodiversity and non-economic damages like loss of cultural heritage, indigenous knowledge. It is a very important issue for most developing and vulnerable countries because in the near future they will have to face many extreme weather events.

Another key element was how this element of the negotiations would progress into the future, in a functional manner. While it was born under the Kyoto Protocol, one of the less controversial elements so far this week, has been its transfer under the Paris Agreement. According to Amparo Martinez, Director General of the National Institute of Ecology and Climate Change and Member of the Delegation of Mexico at COP25, this has been achieved. “This was thought to be more difficult, but it seems that it is not the most complicated issue”, he said.

Credit: UNFCCC.

Once this sense of clarity was achieved, negotiators had to find out where its funding source would come from, within the different funds of the UN system. While the Adaptation Fund may seem like a sensible place to some, developing countries would have seen this to be muddying the waters of support for the impacts of Climate change, and depleting some of the smallest funding sources in the UN system.

“I was worried because they can start to get confused when it is an adaptation to climate change and when it is the reposition of damage that has already occurred. The temporal scale and methodology changes. Also, in terms of verification of what is being done: one is immediate and the other has to do with projections of the possible impacts to design what kind of adaptive strategies is needed or in which sector the resources are going to go” explained Amparo Martinez.

These days they have also been working on the possibility of building relationships with other UN institutions, not necessarily within the Convention. “In the text that is being negotiated now, it is the creation of a group of experts on the provision of support that would operate under the executive committee of the Warsaw Mechanism”.

This is to be called the Santiago Network, and as Martinez explained, it would be seeking to make clearer links across the UN system. “for example, to find a link with the High Commissioner of Refugees” said Pascal.

The main problem they have had to face is the issue of money. While the Loss and Damage fund has traditionally been discussed as an entirely separate financial element, this COP has seen the debate seriously consider the possibility of embedding the concept within existing UN funds.

“This means that the financial entities that operate under the convention: The Green Climate Fund, the GEF, the Adaptation Fund contemplate the issue of losses and damages in their projects” continued Pascal. This isn’t currently happening but is “one of the new requests on the table” from the G77.

This request has not been very well received, especially by the US, because it does not agree to have to give more money. “It is an issue in which, above all, the US doesn’t agree to finance more or to create new mechanisms or new institutions under the commission” explained Pascal. 

Paragraph 51: US polemic proposal

In a move that has infuriated many observers, the US has begun passing around legal text suggestions that would allow them to block financial liability for climate impacts once and for all.

In a week that has seen the US block negotiations on finance in negotiations on Gender mainstreaming, and land-use change, Climate Tracker has now confirmed that the US is handing out suggested text that would change the governance process of the Paris Agreement, and ensure that even if they pull out next year, they would never be able to be held liable for the losses and damages caused by the historical emissions of America’s industrialisation.

The liability waiver, which Climate Tracker has seen, comes at a time when negotiators are attempting to review whether or not they have been able to support developing countries to deal with the staggering toll the climate crisis is creating.

What the US proposed is that, as they leave the Paris Agreement, that the discussions of the WUM would be transferred to the UN Conference of Parties, which it would remain engaged with as a member of the UN Framework.

But this would not simply be a minor procedural change

“If this responsibility to report to the COP is extended, it would mean that they would have to transfer a series of responsibilities to the COP”.

This would include “the famous paragraph 51 of the Paris Agreement that precludes the use of Art 8 (Loss and Damage) to sue countries for losses and damages, so it cannot be used for claims or for lawsuits or for any punitive action. Countries affected by climate change impacts could not sue large emitting countries for their damages and losses” explained the negotiator.

This relates to a decision back in 2015, when in the final hours of the Paris Agreement negotiations on Article 8 on loss and damage, paragraph 51 was added as one element of the final package to be agreed. This liability waiver was put into a COP decision and not the Paris Agreement itself.

Credits: UNFCCC.

Paragraph 51 states: Agrees that Article 8 of the Agreement does not involve or provide a basis for any liability or compensation.

In practice, this means that the countries least responsible for the crisis, but who are suffering the most, could stand even less chance of receiving financial support to recover from the devastating impacts of increasingly frequent and severe droughts, flooding and sea-level rise. 

To Harjeet Singh of Action Aid, “The US has…the audacity to pull out of the Paris Agreement, meaning it is refusing to meet emissions targets and will not make any payments into the Green Climate Fund. It is also taking further steps to protect itself and its polluting industries from any liability for the impacts of the climate crisis it has done the most to cause.”

This was confirmed by Pascal but may not happen in the end. There is already a consensus text, but many things can happen in the next few days forward.

“Negotiations are now taking place bilaterally, country to country and region to region”, affirmed Pascal.

According to him, everything can change, because negotiations on other issues such as carbon markets or issues such as capacity building could also leak into the loss and damage text and vice versa.

As he says, there is a possibility of understanding but it can also happen that the US blocks the agreement. “But I am hopeful, I am an incurable optimist”.

At the moment, it seems that we will only find out whether that optimism is dangerous or not in the next 24 to 36 hours.