Loss and damage @ COP 29 Baku: 4 key takeaways

In July 2024, cascading impacts of multiple landslides in Wayanad, Kerala—a state of India – have killed more than 400 people and resulted in colossal socio-economic impacts. The landslides were triggered by heavy rains, causing hillsides to collapse and sending torrents of mud, water and boulders cascading down into the area. Further, heavy rainfall in Sichuan Province of China, triggered devastating floods and landslides in August 2024, resulting in casualties and substantial damage. Like these events, numerous other extreme weather events in the recent months, underscore the escalating complexity of climate-related risks, with compounding and cascading impacts on vulnerable populations and economies. The key question is how to avert, minimize and address loss and damage associated with these increasingly frequent disasters?

Understanding Loss and Damage

In the climate negotiation context, what counts as loss and damage is as follows:

• Avoided loss and damages refers to impacts that have or could be averted or minimized through climate change mitigation, adaptation and/or DRR measures.
• Unavoided loss and damages are those impacts that could not or have not been avoided due to resource and capacity constraints but for which avoidance options do exist.
• Unavoidable loss and damages refer to those impacts that go beyond existing adaptation and mitigation measures – for example, the irreversible impacts of glacier melt and sea-level rise.

While UNFCCC distinguishes between loss and damage in terms of economic and non-economic aspects, the IPCC Sixth Assessment Report highlights the likelihood of exceeding adaptation limits. These limits can be “soft,” where adaptation options exist but communities don’t have the financial resources needed or “hard,” where intolerable risks cannot be avoided.

The Fund for responding to Loss and Damage Fund, set up at COP28, is to enable grants-based support to developing countries towards balancing the fiscal burden and climate vulnerability. It addresses loss and damage caused by slow-onset events and extreme weather events. There is a clear distinction between the fund for responding to Loss and Damage and financing climate change adaptation and DRR. The fund aims to capture those impacts that are unavoided or unavoidable and beyond the limits of adaptation while adaptation and DRR financing deal with risk reduction, prevention and resilience building. It is important to understand the mechanisms for addressing loss and damage and those that can help avert and minimise loss and damage, while appreciating that countries are using some financing mechanisms and instruments that address the common objectives. For example, disaster risk financing refers to risk transfer or retain the unavoided residual risk, but many unavoidable and some unavoided loss and damage remains unaddressed. Slow-onset and non-economic loss and damage remains largely unaddressed vis-à-vis the likely scale of the impact.

In July 2024, the Board of the Loss and Damage Fund met for a second meeting in Songdo, Republic of Korea, they discussed on establishing funding windows that address: rapid response for quick release of funds post-disaster; slow onset events requiring long-term planning and transformative programming; and small grants, to support communities, Indigenous Peoples and vulnerable groups.

Simultaneously, the Santiago Network, launched at COP25, enhances technical support to developing countries, coordinating expertise and resources through the UNDRR and UNOPS. With new technical guidelines underway, the Santiago Network is poised to help unlock crucial finance, complementing the Fund’s efforts and empowering nations to effectively manage and mitigate loss and damage.

Together, these initiatives underscore a global commitment to not only understanding and addressing the multifaceted challenges of climate change but also equipping vulnerable communities with the tools and resources they need to build resilience and adapt to an increasingly uncertain future.

Four strategic priorities for operationalization of the Fund

COP 29 in Baku provides an important opportunity to discuss on four priority areas:

1.A synergistic financing framework: Recognizing the huge funding gaps to address unavoided and unavoidable Loss and Damage associated with climate change in the vulnerable countries, it’s time to put in place a synergistic framework built on risk management finance (including DRR and climate change adaptation finance) for avoided risks, risk finance for unavoided risks and curative finance for unavoidable risks. Fiji, for example, has expanded its disaster risk finance portfolio from an initial reliance on risk retention and ex-post resource mobilisation towards establishing contingent credit arrangements and risk transfer instruments to scale parametric insurance.

2.Transformative adaptation: Estimates annualized average losses from hazards are $421 billion (1.19 percent of Asia-Pacific GDP) which can be reduced substantially between $84 to $126 billion (See the figure) because warning of storms, heatwaves and floods with 24 hours lead – time can reduce the damage by 30 and 33 percent respectively. Further, actions are needed to move from incremental investments in adaptation to transformative adaptation, with the aim of comprehensively reducing the Loss and Damage. For example, addressing coastal flooding and sea level rise requires transformative approaches that go beyond short-term fixes, including long-term planning, investments, and decision making. Sea level rise will hike coastal flood losses at least 12-fold by 2100. The benefits of adaptation outweigh the costs, providing returns at least 10 times the investments.

3 Tech ecosystems to avert disasters: In certain context of specific vulnerabilities, tech ecosystems can avert Loss and Damage.The Amrita Center deployed AI-enabled wireless sensor network for landslide monitoring and early warning in Munnar, Kerala, India. By seamlessly integrating meteorological, geological, and hydrological data through an IoT framework, the system delivers timely and reliable early warnings. Barely two weeks before the deadly Wayanad landslides, there were number of landslides 300 km south in Munnar, Kerala. The scale was much lower but another reason they did not cause much damage was because they were predicted – allowing for pre-emptive action, including evacuation of at-risk populations. In 2023, the Amrita Center for Wireless Networks & Applications was the winner of the Averted Disaster Award.

4. Resilient infrastructure and infrastructure for resilience: While resilient infrastructure refers to infrastructure that can absorb, rebound, and adapt to hazard events and shocks, infrastructure for resilience supports broader social and economic or systemic resilience of coastal, river-basins and mountainous regions. Critical infrastructure sectors that comprise energy, water, ICT and transport, together with social infrastructure are often referred to as ‘lifelines’. These sectors are not single systems but networks, which means that a local emergency could quickly spread and lead to severe disruptions. These sectors are becoming increasingly interdependent, especially with the digitization of services. Regional cooperation built on the understanding shared risks and shared vulnerabilities is an important element of this approach to avert, minimize and address Loss and Damage.

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Authors:

Sanjay Srivastava, Chief of Disaster Risk Reduction Section, ESCAP

Madhurima Sarkar-Swaisgood, Economics Affair Officer, ICT and Disaster Risk Reduction Division ESCAP

Daisuke Maruichi, Economic Affairs Officer, ICT and Disaster Risk Reduction Division, ESCAP

Naina Tanwar, Consultant, ICT and Disaster Risk Reduction Division, ESCAP

Related SDG: SDG1, SDG9, SDG11 and SDG13