On July 28, 2022, the UN General Assembly declared “Access to a Clean and Healthy Environment” a Universal Human Right.
States, international organizations, and business enterprises called upon to turn this resolution into reality have often contributed to the opposite, with many policies and actions wreaking havoc with the environment.
In November 2022, COP27 confirmed the weak commitment of Parties to substantially reducing one of the major causes of environmental degradation: Green House Gas (GHG) emissions. Moreover, despite insistent requests from civil society, subsidies to fossil fuel companies have continued unabated, as certified by UNEP in its “Emissions Gap Report 2022”.
COP27 has failed to address the roots of the climate crisis, but celebrates the establishment of the Loss & Damage Financial Facility (LDFF). Is this a real “success”?
At COP26 the G77 and China had pushed for the LDFF, but the matter was postponed to COP27, a full year later. Liability, i.e., the admission of responsibility by developed countries for the climate crisis and related environmental disasters, remained, and still remains, a bone of contention, while extreme weather events increasingly jeopardize lives and livelihoods. A case in point was the position of John Kerry, US climate envoy to COP27, who initially refused to admit legal responsibility for L&D but later softened his stance and admitted that the LDFF is in fact needed.
A 30-year journey
The principle of L&D was first introduced in December 1991: Vanuatu, on behalf of members of the Alliance of Small Island States (AOSIS), requested a financial mechanism to deal with the consequences of sea level rise, which later also included the effects of other types of loss and damage, such as those caused by desertification and drought. Disagreements over liability and compensation by developed countries put the debate on hold until 2013, when destruction caused by Typhoon Haiyan in the Philippines influenced negotiations at COP19 in Warsaw. An international coordinated action to address “long-term changes brought about by global warming” resulted in the Warsaw International Mechanism (WIM). In the following years WIM remained mainly focused on its first function: enhancing knowledge and understanding of L&D. Some attention was then devoted to its second function, namely to strengthen dialogue, coordination, coherence and synergies among relevant stakeholders. However, focus on its third function, related to action and support to address L&D, remained marginal. Not until COP25 in 2019 were the WIM implementation gaps addressed with the establishment of the Santiago Network for L&D (Santiago Network) to catalyse technical assistance; but again, no funds were ever provided to pay for L&D.
In 2022, COP27 finally approved the structure of the Santiago Network and drafted the process which should constitute the LDFF, but it will take years to make it operational.
“Major achievement” of COP27?
The document Funding arrangements for responding to loss and damage associated with the adverse effects of climate change, including a focus on addressing loss and damage acknowledges that it is urgent to provide adequate financial resources to assist those developing countries which are most negatively affected by the climate crisis, citing the economic and non-economic effects caused by extreme weather events and slow onset events. Although the document establishes «new funding arrangements» to complement and include sources, processes and initiatives under and outside the UNFCCC and the Paris Agreement, the LDFF is not yet a reality.
COP27 has set up a coordination mechanism, the Transitional Committee, to make recommendations “by consensus” at COP28. This poses a challenge, since its 24 members, 14 from developing countries and 10 from developed countries, may not easily reach a consensus. Moreover, the document states that the work of the Committee should be oriented by the 2nd and 3rd Glasgow Dialogues, scheduled respectively to take place in June 2023 and June 2024. Thus, the “operationalization” of the LDFF will be further delayed until mid-2024.
Finally, the COP secretariat is required to report to the Transitional Committee on the outcomes of the activities and deliverables related to financing sources and procedures; however, this work of the secretariat is «subject to the availability of financial resources». If funds are not allocated, this action too remains on hold.
All the above mentioned issues are bound to further delay the implementation of the LDFF.
Controversial points
In May 2022, CAN International, Christian Aid, Heinrich Böll Stiftung (Washington DC), Practical Action & Stamp Out Poverty published the discussion paper “The Loss and Damage Finance Facility. Why and How”. The paper recommended that COP27 establish the functions and core institutional arrangements of LDFF, including relationships with existing UNFCCC Financial Mechanisms and the Paris Agreement. It also specified a three-year time frame to make LDFF operational: year 1 to define LDFF functions and institutional arrangements and to identify developing countries entitled to L&D; year 2 to define governing arrangements and the delivery structure of LDFF and to mobilize resources for its interventions; year 3 to have funds actually disbursed to developing countries entitled to receive them.
However, considering the outcome of the negotiations, the implementation of the LDFF will take even longer. This is because although COP27 has started the process to set up the LDFF, its progress is likely to be neither smooth nor speedy. The European Union refuses to accept that China, the second-biggest world economy, and other recently industrialized nations, like South Korea and Singapore (listed as “developing countries” in the 1992 UNFCC Convention), are entitled to receive L&D funds. The European Union also demands that all countries which at present are high GHG polluters, and not only “old polluters” like the Highly Developed Countries, should contribute to the LDFF. Still, which Least Developed Countries should be entitled to L&D remains controversial, and indigenous peoples and women’s groups will not have direct access to funds.
Which options?
In conclusion, LDFF will need years to become effective, while funds for Mitigation, and even more so for Adaptation, remain inadequate and unevenly distributed.
The limit of 1.5°C temperature increase is likely to be reached by 2050; “the gravity and frequency of L&D will continue to increase with every additional fraction of a degree of temperature increase”. Thus L&D will become exorbitant in the near future.
Multilateral negotiations are vital, but evolve at a very slow pace: they do develop, decade after decade, but they may reach the needed consensus far too late. By then, loss and damage will be too high for any “compensation” to be even possible.
How can civil society organizations, indigenous communities and grass-roots bodies speed up the process?