Opinion: Will COP27 loss and damage deal accelerate climate action?

The loss and damage agreement opens the way for climate negotiators to set up a dedicated fund to help developing vulnerable countries deal with loss and damage caused by both extreme and slow onset events resulting from climate change. As a first step, countries agreed to set up a ‘transitional’ committee by March next year, to work on recommendations for COP28 on how to establish and operate the fund. 

Will the agreement be a watershed moment that will see richer countries provide funds to poorer ones that bear the brunt of extreme weather, including floods and droughts, and rising sea levels, brought on by climate change? The devil will be in the details, and also the speed at which a fund can be operationalised. Some countries, like Pakistan – a third of which is currently under water – need money now, not in years to come…or whenever countries can reach what is likely to be a complex and difficult funding agreement.

Polluter pays principle

One aspect that will be interesting as the negotiators get down to work will be estimates on the size of the loss and damage package. Figures already published in scientific literature range from around $300-$600 billion in 2030 rising to $1 trillion by 2050. (To give some idea of the magnitude, it has been calculated that the fossil fuel industry has made around $1 trillion/year profit since the 1970s.)

War on Want suggested the UK alone should provide $1 trillion based on what the country had exploited from the Global South

Poverty action group War on Want suggested the UK alone should provide $1 trillion based on what the country had exploited from the Global South, which is one way of approaching it. But a mechanism of monetising costs relating to loss and damage caused by climate change should be an extremely powerful exercise. While no amount of money will compensate for the human suffering that is already happening (and these stories need to be told), putting a price on climate-related disasters will be an important step in applying the polluter pays principle (PPP). PPP is the commonly-accepted practice that those who produce pollution should bear the costs of preventing damage to human health or the environment. It is, for example, written into EU and US environmental legislation.  

The Loss and Damage Collaboration notes that the transitional funding committee, which comprises 14 members from developing countries and 10 from developed countries, is being encouraged to look at innovative sources of money, such as taxes on the fossil fuel industry and frequent flyer levies.