By Shikha Bhasin

Loss and damage is among the most contentious issues tabled at COP27 and, after much wrangling, is on the agenda. But who’s going to do the maths and how?
The institutionalisation of what constitutes ‘loss and damage’ resulting from human-induced climate change, the indicators and science behind it, and the financial repercussions and liabilities—all these are still awaiting judgement as devastating heat stress, floods, wildfires, hurricanes and atmospheric greenhouse gas emissions continue to rise. There is a long road ahead on loss and damage.

There’s already debate on the lack of well-defined and contextualised adaptation and resilience indicators. Adding further complexity to this is the fact that loss (say, working hours lost to heat in India) will be harder to calculate than damage (say, a road destroyed by a storm).

At COP27, India will do well to capitalise on the glut of climate leadership among developed countries mired in climate action backsliding. We must stand for all developing countries to push back delays to develop the right institutional and financing framework to address loss and damage in Egypt.

The (poor) people’s problem
Loss and damage refers to the impacts of climate change being faced by vulnerable communities and countries.

It is a challenge of mammoth proportions. In India alone, 75% of districts are prone to extreme climatic disasters, as noted in CEEW’s research. While unveiling the “Early Warnings for All Action Plan” at COP27, the World Meteorological Organization said spending $800 million on early warning systems against natural hazards in developing countries could avoid ‘losses’ of $3-16 billion per year.

While the opportunity cost to spend on adaptation is of merit to all, financial flows towards adaptation have been myopic, which means the cost to recover from loss and damage will be that much higher. Estimates suggest the economic cost of loss and damage in developing countries is between $1-1.8 trillion by 2050. This vicious cycle needs to be broken through. The longer mitigation and adaptation spending remains cursory, the higher the loss and damage liabilities will amount to.

How to do the maths?
There’s a problem in the numbers already (or the lack of it). CEEW analysis shows that almost all of the 66 developing countries that mentioned loss and damage in their official submissions ahead of COP27 were unable to include any data on the losses incurred, associated impacts, and/or non-economic losses. This is indicative of the lack of capacity in nations to evaluate loss and damage and estimate the financial flows needed to address it.

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A mutually agreed upon definition of loss and damage is urgently needed, as is streamlining of institutional arrangements, and increasing the availability and accessibility of financial support. While loss and damage has formally been tabled for negotiation at COP27, there has already been a dilution from what developing countries would have liked. Look carefully at the wording of it–there are terms and conditions. The agenda to formalise dedicated financing towards loss and damage was adopted on day 1 of COP27 “with a view to adopting a conclusive decision no later than 2024”. It also did not include “liability” or “compensation”. But if the world is serious, two issues must be tackled at COP27: the governance framework and the financing channels to address L&D issues.

Loss and damage is not charity
There is no reason good enough why decisions on both fronts can’t be made this year. It has taken ten years of negotiations to identify the Santiago Network as the institutional home for addressing loss and damage. Developing countries are keen for an inclusive governance structure to oversee the Santiago Network, but developed countries are pushing to have the Executive Committee (ExCom) of the Warsaw Implementation Mechanism (WIM) instead. However, the ExCom’s governance and capacity challenges have been documented enough over the past COPs for it to only remain as a negotiating tactic to delay decision-making.

With regards to funding, while a few developed countries (such as Sweden) have shown leadership in pledging financing for loss and damage specifically, the narrative must shift from being charitable towards developing countries’ situations to one that demands taking responsibility for lost lives and livelihoods.

The pledged goal of $100 billion of climate finance is yet to be achieved in a single year, while the losses incurred have run well into trillions. Coagulating loss and damage financing into the same institutional and disproportionate rationalisation of climate finance is likely to see the same result that climate finance has seen so far: inadequate and opaque.

The COP processes have long been home to unmet promises and pledges. India must exert its weight to critically highlight the missed opportunities, the rising losses, and unabated mistrust that has been normalised. We should reiterate a hard stance on doubling adaptation spending while ensuring that $100 billion is only the floor of climate finance, not the ceiling, and keeping this distinct from financing loss and damage. COP27’s success will depend significantly on the institutionalisation of the governance and financing window for loss and damage. With its upcoming G20 Presidency, India must shed apprehensions of alignment across different negotiating blocks, and stand tall to demand action as—and for—all developing nations.

The author is Senior programme lead, CEEW