Loss and damage: compensation or information?

Experts disagree on whether to make polluters pay for unavoided climate change impacts on vulnerable communities

Flooding in Bangladesh: how much damage is due to climate change? (Pic: Department for International Development/Rafiqur Rahman Raqu)

Flooding in Bangladesh: how much damage is due to climate change? (Pic: Department for International Development/Rafiqur Rahman Raqu)

By Leo Barasi in Nairobi

The concept of loss and damage is becoming increasingly prominent in discussions of climate change, but experts are divided over what it means.

Some emphasise the potential for loss and damage to quantify the costs of particular impacts of climate change, so helping governments and others prioritise certain policies.

Others describe loss and damage as a way of determining compensation owed to victims of climate change, to be paid by countries with high emissions.

“Polluters will have to be called to account”, Bangladeshi climate adaptation expert Saleemul Huq tells RTCC.

Costs of inaction

Loss and damage commonly refers to the negative effects of climate change that have not been avoided through adaptation and reduction of greenhouse gases.

It has been accepted as an element of international climate negotiations since the Cancun climate conference in 2010.

A subsequent agreement, in Warsaw in 2013, established a mechanism for incorporating loss and damage into a future international climate deal.

This mechanism will report back at the 2016 climate conference, although this year’s meeting in Paris will determine whether loss and damage is included in any climate agreement.

Speaking to RTCC at a climate adaptation conference organised by the research group IIED, Erin Roberts, a researcher specialising in loss and damage, says the priority for poor countries is to understand the challenges they face.

“In the short-term, developing countries want help figuring out how to deal with loss and damage,” she says.

The international focus on loss and damage should be to support these countries “to understand what climate change will bring and to address the impacts that can be avoided through adaptation”, as well as to deal with the changes that cannot be avoided.

Compensation

But Huq says loss and damage was introduced to international negotiations to secure compensation for victims of climate change.

“Loss and damage was in Cancun as a euphemism for liability and compensation”, he says.

He notes that loss and damage has been measured without reference to climate change for many years, citing the estimated costs of Hurricanes Katrina and Sandy.

Now, he says, loss and damage has now been given new significance: “It’s about the human dimension.”

According to Huq, it is inevitable that loss and damage will become used as the basis for compensation.

The purpose of the mechanism agreed at Warsaw was to “buy time – sooner or later we’ll have to talk about compensation”.

He adds that frustrations among people affected by climate change would be unmanageable if loss and damage are not compensated.

“If you fail to negotiate an agreement you’ll have to take the blowback. If you think 9/11 was bad, you ain’t seen nothing,” he warns.

In his view, the main barrier to compensation for loss and damage is the difficulty of attributing particular weather events to climate change.

Once this is overcome, he says, it will be possible for victims of climate change to say to polluters: “You owe me because you harmed me”.

Insurance model

Huq outlines how compensation for loss and damage could work.

“People think about legal liability and compensation, but you don’t have to go through a court case,” he says.

Instead, payments could be based on an insurance model: “You would have to have a climate-related trigger, with the polluters paying the premium.”

Could this create perverse incentives for vulnerable countries to fail to take adaptation measures, knowing that they will be compensated for climate-related disasters?

Huq suggests that an insurance system could create incentives for adaptation, for example by offering larger payments when certain measures have been taken: “If you adapt, you get more out of it”.

Data

Roberts agrees that some countries will need support to address permanent losses, such as the loss of territory, as with small island states facing rising sea levels.

However, she says the focus on using loss and damage to determine compensation distracts from developing countries’ need for data to help their planning.

“It’s been really frustrating because the media always focuses on compensation,” she says.

She adds that improved understanding of loss and damage caused by climate change should increase the international focus on reducing emissions.

“Loss and damage should put more emphasis on mitigation – it shows what we are facing.”

Both Roberts and Huq see this year’s Paris conference as crucial for determining whether loss and damage will be featured in a global deal.

According to Roberts, “it is important that the agreement recognises loss and damage, and links it to mitigation and adaptation”.

Measuring costs

In addition to the debate about the purpose of measuring loss and damage, experts at the conference point to the difficulties of accurately judging these costs.

Lawrence Flint, a specialist on climate adaptation in Sub-Saharan Africa, outlines some of the challenges involved.

He notes that estimates of loss of damage have to determine which costs are due to climate change and which are due to poor planning or inadequate infrastructure.

Flooding in Angola, for example, may be linked both to climate change and to local deforestation.

Kees van der Geest, a researcher at the UN University, identifies a related challenge: “How do we treat avoidable loss and damage that isn’t avoided?”

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