News | Socio-ecological Transformation - Climate Justice - COP27 Evading Climate Liability

The COP27 loss and damage fund is riddled with inherent and manufactured weaknesses



Apoorva Dhingra,

A woman weeps in a cyclone-affected area in Blantyre, Malawi, 17 March 2023. Photo: IMAGO / Xinhua

“The crisis exists precisely in the fact”, as Antonio Gramsci said in 1930 in his Prison Notebooks, that “the old is dying and the new cannot be born; in this interregnum a great variety of morbid symptoms appear”. Nearly 100 years later, floods caused by torrential rain and melting glaciers displaced nearly 8 million people in Pakistan, while desert locusts led to crop and pasture loss in Ethiopia and Somalia — ample evidence for this “great variety”.

Apoorva Dhingra is a Delhi-based researcher interested in climate adaptation, ecology, degrowth, local governance, and urbanization.

For climate vulnerable countries such as Pakistan, Ethiopia, and Somalia — most of which are relatively poor — finance was at the heart of what they needed from the twenty-seventh Conference of the Parties of the UNFCCC, COP27. To their partial relief, COP27 closed on 20 November 2022 in Sharm-el-Sheikh, Egypt with the historic agreement to create a loss and damage (L&D) fund for vulnerable countries hit hardest by climate disasters.

By recognizing the obligation of offering new, additional, predictable, and adequate financial resources, the fund intends to help vulnerable countries respond to economic and non-economic loss and damage associated with climate change. It acknowledges that current forms of climate finance, which are largely loan-based and lead to significant climate-induced debt, are falling short when responding to the current and future impacts of climate change. This triumph is a direct result of 30 years of advocacy undertaken by the Alliance of Small Island States (AOSIS), and supported and bolstered by most countries and civil society organizations from the Global South.

But while the establishment of the loss and damage fund is a symbolic victory for movements and campaigns demanding compensation, it is not enough. By mapping the inherent and manufactured weaknesses of the L&D fund, we can see the ways in which this fund may distract from the larger goal of wealth redistribution and climate justice, achievable through reparations.

Manufactured Limitations

The first crucial detail that weakens the fund is the lack of binding bases for liability or compensation. A provision in Article 8 of the Paris Agreement states that the “agreement does not involve or provide a basis for liability or compensation”. Despite the fact that the IPCC’s Sixth Assessment Report recognized colonialism as a driver of climate change and ongoing inequity, this provision — which was a condition put forth by the United States — absolves colonizing countries from ever being held liable for the carbon they emitted during their primitive accumulation of capital in the eighteenth and nineteenth centuries.

While this does not mean these countries will not contribute to the L&D fund, it does mean that how much or how often they contribute will depend on their willingness and not on the needs of climate-vulnerable countries. For countries like Pakistan, which suffered loss and damage worth 16.3 billion US dollars, a fund with a significant endowment that is able to offer compensation commensurate with the scale of devastation is crucial. But since most capital is geographically concentrated in the Global North, without a binding clause of liability and compensation, this fund is in danger of going the way of adaptation funds, which are inadequately mobilized and delivered.

Unfortunately, however, the L&D decisions made in Sharm el-Sheikh remain littered with footnotes such as “the outcomes … are without prejudice to the consideration of similar issues in the future”, which make it difficult to hold colonizing countries to account for other injustices. At a time when it is clear that the burdens of environmental catastrophe will be distributed in ways that echo the history of the global racial empire, it is critical to situate anthropogenic climate change as a by-product of colonialism, which this decision fails to do.

Calculating Losses and Damages: A Byzantine Task

Even if we were to look past the uncertainty around the fund’s capital mobilizing mechanisms, calculating losses and damages is a byzantine task. With the UNFCCC’s mandate to tackle anthropogenic interference with the climate system, attribution science, which enables scientists to attribute a rapid-onset or slow-onset disaster to anthropogenic factors, plays a critical role in discerning whether a certain disaster is caused by climate change or not.

Additionally, because the UNFCCC characterizes climate change as human-induced and loss and damage as a manifestation of impact associated with climate change, it is possible that attribution science will significantly impact whether losses and damages incurred from a disaster merit a pay-out from the L&D fund.

Yet, attribution science has limitations. Attribution scientists warn that at present that there is significant variation in evidence for different kinds of slow-onset and rapid-onset events, and we cannot expect the same strength of evidence between different disasters and countries due to variability in the data available.

For instance, several countries in West Africa experienced severe food insecurity in April–May 2022 following erratic rainfall. But because of the lack of weather monitoring stations in the region (among other things), food shortages in the region could not be attributed to climate change, potentially blocking crucial compensation. This lack of meteorological data, which is a greater problem in the Global South than the Global North, raises serious concerns about directly linking attribution science to loss and damage payouts.

Change, then, lies outside the bounds of respectable climate negotiations and global finance. As concerned inhabitants of this planet, our demands and ambitions have to overtake the colonizer’s.

It is for these reasons that attribution scientists recommend that to understand and calculate loss and damage, it is essential to not only study drivers of environmental hazards, but also investigate other components of risk such as influences on exposure and vulnerability. For instance, loss and damage during flooding is determined by how many people live in the floodplains, whether the infrastructure is flood-resilient, if there are early warning systems, and how quickly governments can facilitate evacuation amongst other things.

These factors, all crucial components of resilience, are also influenced by colonialism, which has created long-term vulnerabilities to natural hazards. In the case of Haiti, where high-magnitude earthquakes are common, there is continued poor disaster preplanning and a weakened institutional response. While institutional failures are not solely due to French, Spanish, and American colonization of Haiti, its extreme vulnerability can be traced to a century of deliberate colonial impoverishment.

In this case then, despite clear linkages between colonial pillage and incurred loss and damage, Haiti would be ineligible for a payout from the L&D fund because the earthquakes cannot be attributed to anthropogenic interference. In addition to short-changing Haiti, this also distracts from the real goal of attribution science, which is to investigate drivers of change and not to establish responsibility, blame, and liability to suit political agendas.

Slow-Onset Events

An additional “devil in the details” is the question of how countries will calculate losses and damages for slow-onset events. Due to the conditions put forth by the US that help colonizing countries evade liability and historic responsibility, losses and damages emerging from certain slow-onset events such as sea level rise and desertification may be considered ineligible for a pay-out.

The UNFCCC defines slow-onset events as those that evolve gradually from incremental change occurring over many years or from an increased frequency or intensity of recurring events. The Warsaw International Mechanism (WIM), the UNFCCC’s main vehicle for addressing loss and damages, lists eight types of slow-onset events including sea level rise, increasing temperatures, ocean acidification, glacial retreat and related impacts, salinization, land and forest degradation, loss of biodiversity, and desertification.

It is likely that losses and damages incurred from disasters that occur only after November 2022, when the fund was established, will be included in a country’s calculations of losses and damages. Yet, while this cut off may work for rapid-onset events such as floods and cyclones, it leaves unclear how slow-onset events will be treated.

Consider droughts, especially in urban areas. According to the UNFCCC, droughts are extreme weather events that are also inextricably linked to slow-onset and incremental climate change. In urban as well as rural areas, droughts can be a result of land degradation, over-extraction of groundwater, and decreased rainfall. Therefore, drought-like conditions can show incrementally.

Before an entire city loses water, which grabs national and international attention, smaller sections of the community, especially those without the ability to supplement dwindling water supply, can begin to lose access. Urban droughts are known to affect agricultural production, cause food insecurity, lead to water related health risks, and cause loss of livelihoods.

Yet, in India, for example, there is an absence of accurate assessments of urban drought impacts that could drive the demand for losses and damages. In this scenario, by calculating losses and damages from when an extreme weather event — drought — occurs, losses and damage already incurred by marginalized urban communities as a result of slow-onset events will be ignored.

Economic and Non-Economic Losses and Damages

In India and many countries across the world, the Post-Disaster Needs Assessment (PDNA) is used to evaluate losses and damages caused by natural and climatic disasters. This approach, developed by the UN Economic Commission for Latin America and the Caribbean (UNECLAC) and streamlined by the World Bank, focuses on resilient recovery and covers social sectors, productive sectors, infrastructure sectors, and cross-cutting sectors.

However, economists state that this approach in India is severely constrained due to the lack of adequate baseline data on socioeconomic, demographic, and ecosystem indicators. In the event that data is collected, it is often unreliable and fragmented, impeding a holistic and evidence-based calculation of losses and damages. 

Additionally, these approaches fail to account for long-term damages such as displacement and loss of employment or take into account historic vulnerabilities determined on the basis of caste, gender, and religion. For just one stark illustration, when Cyclone Fani struck the India state of Odisha in 2019, Dalits — communities situated outside the four main castes in the varna system and historically marginalized by caste Hindus — faced caste-based discrimination at relief camps and while accessing aid.

This is not a fight won solely by the ways of slow-moving and vapid international negotiations.

This gives way to non-economic losses and damages, which refers to a broad range of losses that are not financial in nature and not commonly traded in markets. For instance, when communities are forced to migrate because of droughts, they can experience loss of identity and kinship which is considered a non-economic loss and damage. However, this can be a devastating outcome for which there is no adequate compensation.

In the case of Adivasi or Indigenous communities in India, who maintain a spiritual relationship with forests, dispossession and displacement, in addition to causing economic loss, can cause resource scarcity which can give way to school dropouts and early marriages while diseases can increase women’s care work. These social or non-economic losses are difficult to monetize and compensate for and despite their relevance to marginalized communities, the field of non-economic loss and damage remains widely under-researched.

But even if losses are monetized, how do we determine how much compensation is adequate? Where social losses are concerned, an important step in addressing them is to acknowledge that harm is done. However, when colonizing nations evade liability and the highest international institutions vouch for their stance, where is the onus to acknowledge harm caused?

The Way Forward

The purpose of this essay is not to diminish the 30-year-long advocacy efforts of the Alliance of Small Island States (AOSIS) and allied countries that led to the symbolic L&D fund and who are still pushing for more.

Take, for example, the Bridgetown Initiative, of which the L&D fund is a part and which illuminates a way forward. Led by Barbados, this initiative calls for a complete overhaul of the global financial system. It demands among other things that concessionary finance is made available to vulnerable countries, funds are automatically released when a climate event is responsible for the destruction equivalent to 5 percent or more of GDP and the establishing of a 500-billion-dollar trust to fund climate projects.

For all its shortcomings, even the L&D fund’s transitional committee, established to operationalize the funds, is open to receiving recommendations on the institutional arrangements, modalities, governance, and terms of reference of the fund. Concerned and well-meaning activists must take advantage of this opportunity, because for the fund to be transformative, the UNFCCC must be forced to reckon with the knowledge that today’s climate crisis is a direct result of historic and ongoing colonial and imperial pillage of natural resources.

That said, this is not a fight won solely by the ways of slow-moving and vapid international negotiations. That it took over 30 years of advocacy for the fund to even be created is a testimony to how deliberately sluggish these processes are, which is completely antithetical to climate change’s fast pace of destruction.

To put this in perspective, ever since AOSIS began advocating for the L&D fund, global mean sea level has risen by 3.4 millimetres per year, the Antarctic sea-ice extent has dropped to 1.92 million square kilometres, almost 1 million below the long-term average, rainfall has been below average over four consecutive wet seasons in East Africa, marine heatwaves have doubled in intensity, and many small island developing states have lost access to potable drinking water. The temporalities, then, of the UNFCCC’s efforts and the accelerating climate crisis simply do not match.

Climate justice movements remind us that climate change is inevitably tied to ongoing processes of colonialism, dispossession, imperialism, violence, and violations of Indigenous and human rights. Therefore, meaningful change that can redistribute social advantage can only occur with an acknowledgement of and departure from these processes. By exposing the inherent and manufactured complexities associated with L&D calculation and fund operationalization, I argue that the L&D fund in its current form will not be the vehicle to achieve climate justice.

Change, then, lies outside the bounds of respectable climate negotiations and global finance. As concerned inhabitants of this planet, our demands and ambitions have to overtake the colonizer’s. We have to demand unconditional compensation, debt cancellation, land redistribution, access to housing, healthcare, education, and much more. Most of all, however, we have to reject charity, doled out at the whim and fancy of colonizing countries, in favour of reparations that can correct historical injustices we have inherited from history.

The author wishes to thank David Williams, whose lecture at the Kerala Institute of Local Administration inspired her to write this essay about the L&D fund. She also wishes to extend her gratitude to Neha Margosa and Juliane Schumacher for patiently editing many versions of this essay.