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The Loss and Damage Conundrum: Liability or Compensation?

The Intergovernmental Panel on Climate Change (IPCC) has warned that losses and damages stemming from climate change are not preventable, even if effective actions to limit the global temperature increase to 1.5°C were put in place. There is a “locked-in” level of warming that is already causing unavoidable consequences. “Loss and damage” is a general term used in UN climate negotiations to refer to the aftermath of climate change that goes beyond what people can adapt to, or when options exist but a community does not have the resources to access or utilize them. Loss and damage refer to the negative consequences of climate change on human societies and the natural environment and this could include the loss of coastal heritage sites due to rising sea levels or the loss of homes and lives during extreme floods.

The effects can be categorized into economic and non-economic losses. Economic losses include those affecting resources like goods and services, while non-economic losses can be the most devastating affecting the lives of many and disappearance of cultures and ways of living. The Loss and Damage debate has been contentious within the international climate negotiations because of questions of fairness and equity and proving historical responsibility for climate change. As per UNFCCC Decision 3/CP.18, Loss and Damage in the international policy debate broadly refers to efforts to “avert, minimize and address loss and damage associated with climate change impacts, especially in developing countries that are particularly vulnerable to the adverse effects of climate change”.

Generally, the terms ‘avert’ and ‘minimize’ are used to refer to mitigation and adaptation respectively, whereas the term ‘address’ refers to actions to deal with climate change impacts that have not been or cannot be avoided. The debate about Loss and Damage goes years back with the origin of the debate dating back to 1991 during the negotiations that resulted in the establishment of the UNFCCC. However, only in 2007, the concept appeared in the UN's Official documents during COP13. The "Bali Action Plan", adopted at COP-13, referred to “disaster risk reduction strategies and means to address loss and damage” in its section on adaptation.

Vulnerability to climate change differs among and within regions. Up to 3.6 billion people live in areas that are highly vulnerable to climate change. Those countries and regions with Managing losses and damages may be more challenging for locations with unsustainable development patterns (i.e., exploitation of natural resources), inequity, and high levels of climate sensitivity. This is particularly true for developing countries, that suffer from financial, governance, and institutional capacity shortcomings. Policy and institutions need strengthening to comprehensively address the issue.

The discussion on loss and damage is here to stay and is now a firmly established agenda item in future COPs. Prolonged delaying of improving financial, governance, and institutional arrangements will only result in ever-worse conditions for those that are already most vulnerable and experiencing loss and damage facing of negative impacts of climate change. Given the complexity and contested nature of loss and damage, there is not one single solution. However, the urgency of the issue for developing states will rise in inverse proportion to how much action is undertaken to mitigate and adapt to climate change.

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