What is loss and damage – and why will it be a key topic at Cop28?

The issue was first introduced at international climate negotiations decades ago, but has proved difficult to forge agreement on

A mangrove tree in Banda Aceh, Indonesia. How to compensate poorer countries for loss and damage caused by climate change will be a major issue at Cop28. EPA

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One of the biggest reported achievements of Cop27 in Egypt last year was the establishment of a fund to compensate poorer nations for the loss and damage they suffer as a result of climate change.

A point of contention for decades, loss and damage will also be high up on the agenda when Cop28 starts in Dubai on Thursday.

But what is loss and damage – and why has it long proved difficult for nations to come to an agreement on?

What is loss and damage?

Loss and damage refers to the harms that climate change causes, particularly those that cannot be prevented by mitigation (efforts to cut greenhouse gas emissions) or alleviated by adaptation strategies (approaches that adjust to the effects of climate change).

Myriad climate change effects can result in loss and damage, the UN Environment Programme says, including wildfires, extreme weather such as drought or floods, rises in sea levels, desertification and sea acidification.

The harm these cause can be economic – such as damage to crops or to infrastructure as a result of extreme weather events that have been sparked or made more severe by climate change.

They also include non-economic forms of harm, including the loss of cultural heritage – such as if a group of people are forced to leave their homeland and move to a new area because of climate change.

Loss of biodiversity is another example.

The concept of loss and damage was introduced into climate change negotiations by the Pacific archipelago of Vanuatu more than three decades ago. At Cop19 in Warsaw in 2013, a mechanism for loss and damage was established.

How much is needed and who should pay?

A widely quoted number for the funds needed for loss and damage is $400 billion a year by 2030, but the amounts are only going to increase as the effects of climate change intensify.

By 2050 they could be as high as $1 trillion or $1.8 trillion year, according to estimates.

Developed countries are regarded as largely being responsible for covering the costs of loss and damage, because they have emitted the lion’s share of greenhouse gases over time.

Analysis by Carbon Brief website, indicates that the US, for example, has produced one-fifth of the carbon dioxide emitted since pre-industrial times.

The concept of loss and damage has proved difficult to forge agreement on in part because developed nations are concerned that it could open them up to almost limitless demands for funds.

There has also been much debate as to the responsibilities of developing nations that have in recent times become major emitters, such as China, or that have become wealthy by extracting and selling hydrocarbons.

Several developed nations have allocated funds for loss and damage, including Scotland, Denmark and Belgium.

Separate to the loss-and-damage fund established at Cop27 is the Global Shield against Climate Risks, which has received funding from, for example, Germany. This initiative aims to strengthen the resilience of nations that are vulnerable to climate change.

What can we expect at Cop28?

This loss-and-damage fund took a step closer to becoming reality when an agreement on it was reached in Abu Dhabi in early November.

A UN committee agreed on a series of recommendations for the fund, to be considered by nations at Cop28.

Among the key recommendations were that the fund would be administered for an initial period by the World Bank.

The World Bank’s involvement is seen as popular among developed nations but less welcome among developing countries, amid concern from some that the institution safeguards the interests of western nations.

The UN committee that recently came to an agreement urged wealthy nations to put money into the fund, although the extent to which they may be legally obliged to do so is likely to be discussed at Cop28