What does COP28 mean for Loss and Damage?

‘Loss and Damage’ has become a hot topic around international climate negotiations in recent years, and the announcement of a global Loss and Damage fund at the recent COP28 negotiations made headlines on day one of the event. This article will explain what that means, and what happens next. Also see our article on fossil fuels at COP28 for the emissions discussion that dominated the end of COP proceedings.

What is Loss and Damage?

In the context of global climate funding, Loss and Damage refers to the harmful impacts that climate change is having around the world, most notably the impacts of climate-induced disasters on developing nations (such as the devastating flooding in Pakistan). A Loss and Damage fund is a global fund to provide compensation to help these countries recover from such events. Because developing countries have some of the lowest historic emissions, and often bear the greatest cost of climate change despite having done the least to cause it, it is seen as distributive justice – te tika ka tohaina for the wealthiest, highest-polluting countries to contribute to this fund to make up for the harm their actions are bringing to the developing world. However, many developed countries (including the biggest historical emitter, the United States) have opposed this.

What happened at COP28?

Last year, at COP27, there was an agreement in principle to establish a Loss and Damage fund at COP28. On the first day of COP28 negotiations in Dubai, the creation of such a fund was announced, coupled by funding pledges from countries including states in the European Union, the United Kingdom, Japan, and the host United Arab Emirates. In line with the demands of major emitters including the US, the fund is entirely voluntary.

In total, over US$700 million has been pledged towards this fund – however, the actual cost of loss and damage to the developing world is estimated at between $100 - $400 billion every year. As existing pledges cover less than one percent of this cost, and much of the money comes from existing climate finance pledges, this is nowhere near the amount necessary. Additionally, the nature of many of these pledges remains unclear, and they may be given as loans rather than grants. Caritas Oceania’s Twin Clouds report highlighted the severe danger of a climate-induced debt crisis in the Pacific, which the Loss and Damage fund was supposed to help alleviate.

What happens next?

Although the fund has been announced, many details remain unclear. A recent Caritas report into non-economic Loss and Damage highlighted the importance of considering all types of loss and damage caused by climate change, including losses of culture and places to live. Sustained grassroots pressure from civil society, in line with Pope Francis’s message in Laudate Deum on ground-up multilateralism, will be necessary to ensure that this is properly considered.

In line with the Catholic social teaching principles of distributive justice and solidarity – kotahitanga, we continue to advocate that the wealthiest and highest-emitting countries (including Aotearoa New Zealand) will continue to commit money to the fund in order to save and protect the lives of some of the most vulnerable people in the world.