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The blog of the Wilson Center's Environmental Change and Security Program
  • From the Wilson Center

    What Happens When You Can’t Build Back? Addressing Climate Change Loss and Damage

    April 7, 2016 By Haodan "Heather" Chen
    Sandy damage

    The world is entering a new phase of climate change defined by “failure to mitigate sufficiently and failure to adapt sufficiently,” said Saleemul Huq, director of the Bangladesh-based International Center for Climate Change and Development, at the Wilson Center on March 16. [Video Below]

    Shifting climate patterns and rising seas will affect many communities in ways they cannot fully avoid or adapt to, causing what the international climate community refers to as “loss and damage.” Hurricane Ivan in 2004, for example, caused damage to the Caribbean nation of Grenada equivalent to 200 percent of its annual GDP.

    How to value loss and damage, how to compensate people for that value, and who pays for it are all open questions that can evoke strong emotions. There are places that are especially vulnerable to these effects, like small islands, whose very existence is threatened, but some of the richest countries also have the most valuable assets at risk.

    “We must find innovative means of addressing loss and damage,” said David Estrin, senior research fellow at the Center for International Governance Innovation. “It is not only a matter of extreme weather; it’s also intensifying the effects climate change has had on other intractable problems, such as war, famine, and economic migration.”

    “It’s a Matter of Climate Justice”

    Loss and damage is “a matter of climate justice,” said Estrin. The most vulnerable people – those in developing countries with few assets to mobilize – have generally contributed the least to greenhouse gas emissions. Addressing loss and damage, then, is to some extent to address inequality.

    “‘Losses’ refer to complete loss of something,” said Huq, for example “human life loss cannot be brought back by any amount of compensation… On the other hand ‘damages’ can be repaired – roads can be damaged and repaired.”

    The impacts of loss and damage can be profound in both economic and noneconomic ways. The disappearance of islands, for example, can cost people enormous amounts of money as they have to relocate and reconstruct their lives, said Estrin. But there are more far-reaching results. “People do not just lose islands, but their homes, culture, language.” These losses can never be replaced and leave an ever-lasting trauma in human history.

    The Paris Agreement Is Not Enough

    The United Nations Framework Convention on Climate Change (UNFCCC) first began addressing loss and damage in 2013 at the Warsaw conference, COP-19. The Warsaw International Mechanism for Loss and Damage was established to provide a platform to expand our understanding of climate change consequences and to find an appropriate approach to addressing loss and damage.

    The Paris Agreement, agreed to by nearly all countries at COP-21 last fall, continued support for the Warsaw Mechanism and recognized loss and damage as a separate issue from adaptation, mitigation, and other major sub-heads for the first time.

    The 22nd Conference of Parties in Marrakech this fall will see the results of the Warsaw Mechanism’s three-year mandate with a report on its findings and information on the next steps for loss and damage within the UNFCCC.

    Though an important milestone in many respects, the Paris Agreement does not get the world out of the woods, said Estrin. There’s nothing in the text that requires specific reductions by specific countries within specific periods, he said, leaving open the possibility that mitigation efforts will progress too slowly.

    According to the International Energy Agency, 66 percent of current proven fossil fuel reserves must remain in place to avoid the two-degree Celsius warming limit agreed to by all nations. Another study conducted by Carbon Tracker claims that 80 percent of current reserves must remain untapped to achieve “safe” levels of warming.

    The Paris text does not touch on these reserves, creating a potential bomb for global warming, said Estrin. A warming scenario beyond two degrees Celsius would create escalating levels of loss and damage, putting more and more pressure on whatever mechanism the global community decides on for valuation and compensation.

    Who Pays?

    As it is currently envisioned, loss and damage is primarily focused on financial compensation. Especially for developing countries, having sustainable and independent financing is the primary concern. Huq proposed two feasible funding solutions, one on the national level and the other on the international level.

    At the national level, Huq suggested a government-managed reserve fund. Bangladesh, for example, has put more than $500 million toward climate adaptation, mitigation, and emission reduction since 2008. In over seven years, only two thirds of the funds have been spent, however; the rest are reserved for emergency purposes. The government is now trying to use some of that money to develop a national mechanism on loss and damage, which would define how it gets used, when it gets triggered, and who gets the money.

    $2 per ton of carbon dioxide emitted from burning fossil fuels would add up to $50 billion a year

    “This is an extremely innovative idea that the government of Bangladesh is taking forward,” Huq said, as it would enable the country to take immediate compensatory action without waiting for international aid.

    At the international level, Huq said a global carbon tax is in many ways the most logical approach. A $2 levy on every ton of carbon dioxide emitted from burning fossil fuels would add up to $50 billion a year, he said, roughly the amount supposed to cover adaptation costs for the entire developing world. Such a tax would raise money not from ordinary citizens, who are in large part not responsible for the problem, but from polluters, while at the same time serving as an incentive to reduce emissions as quickly as possible.

    Orville Grey, a senior climate officer in the office of the prime minister of Jamaica, discussed the possibility of new insurance schemes to help raise funds.

    In 1993 and 1994 after losses from several hurricanes, reinsurance prices in the Caribbean reached 200 to 300 percent above those of 1989 and prior years, and correspondingly led to a drastic increase in insurance prices for individuals. This imposed a heavy financial burden on property owners, said Grey.

    The evaluation and risk reassessment process for insurance companies can be also time-consuming, as it took some insurance companies more than nine months to evaluate and reassess the case of Hurricane Ivan in 2004.

    Grey proposed a parametric weather insurance scheme that pays outs when weather exceeds certain thresholds – too much rain or too little – rather than waiting for losses to be confirmed. This would compensate vulnerable low-income individuals in time to avoid further loss and damage and recover more quickly following disasters.

    The Caribbean Catastrophe Risk Insurance Facility (CCRIF), established in 2007 by Caribbean leaders and the World Bank with $47 million in reserve, provides a similar service to national governments by pooling risk and providing access to liquidity to participating governments if hit by a hurricane or earthquake. The goal is to get governments back to functioning as quickly as possible when faced with relatively overwhelming losses (e.g., in Grenada). It is viewed by the UNFCCC as the best practice example to be replicated in other regions of the world, Grey said.

    Addressing Loss and Damage: Innovative Climate Finance Solutions

    Forward to Marrakech

    As the effects of climate change accelerate – 15 of the 16 warmest years on record have occurred since 2001 – loss and damage will become more and more important.

    More innovative finance solutions, whether levies on polluters or risk insurance schemes, are needed. The question of who should pay will likely remain a major point of negotiation at the UNFCCC. Some, for example, balk at traditional insurance schemes because they require ordinary people to pay premiums to protect against a problem they did not cause.

    If left unaddressed, however, the issue may further develop into a major human rights issue and impair human equality. According to a report published by World Bank, there is a high possibility that the poor will suffer most from climate change disruption and dislocation, especially if the two-degree Celsius target is exceeded.

    COP-22 in Morocco this fall will begin to address some of these questions, as more specific solutions for both economic and non-economic loss and damage caused by rapid onset climatic events (e.g. floods and hurricanes) and slow onset events (e.g. droughts and sea-level rise) will hopefully be developed.

    “Clearly the issues of loss and damage are making themselves felt, seen, and heard on an ongoing basis,” said Thomas Lovejoy, a professor at George Mason University and ECSP and Brazil Institute advisory board member. “There is a trajectory of global change that is driving loss and damage in even larger and even more complex ways, and at the same time the solutions have to be very sophisticated too.”

    Event Resources:

    • David Estrin’s Presentation
    • Orville Grey’s Presentation
    • Photo Gallery
    • Video

    Sources: Carbon Tracker, Germanwatch, International Energy Agency, NASA, Nature, Reliefweb, United Nations Framework Convention on Climate Change, World Bank.

    Photo Credit: The aftermath of Hurricane Sandy along the New Jersey shore, November 2012, courtesy of Greg Thompson/U.S. Fish and Wildlife Service.

    Topics: adaptation, Bangladesh, Caribbean, climate change, COP-19, COP-21, COP-22, development, disaster relief, economics, environment, environmental security, featured, flooding, From the Wilson Center, funding, international environmental governance, Latin America, livelihoods, loss and damage, risk and resilience, UN, video
    • TomHarrisICSC

      It is wrong to make a link between extreme weather and global warming.

      This is one of the few areas of agreement between the United Nations Intergovernmental Panel on Climate Change (IPCC) and the Nongovernmental International Panel on Climate Change (NIPCC).

      In 2012, the IPCC asserted that a relationship between global warming and wildfires, rainfall, storms, hurricanes, and other extreme weather events has not been demonstrated.

      In 2013, the NIPCC concluded the same saying, “in no case has a convincing relationship been established between warming over the past 100 years and increases in any of these extreme events.”

      The National Climate Data Center reveals that extreme weather state records for all states are spread throughout the past century, with no recent increase. Here are some of the records for California, for example:

      The maximum temperature of 134 degrees was in 1913. The minimum temperature was – 45 degrees in 1937. The maximum 24-hour precipitation was 25.8 inches in 1943. The maximum 24-hour snowfall was 67 inches in 1982.

      • http://www.newsecuritybeat.org/ Schuyler Null

        http://www.ipcc-wg2.gov/SREX/

      • Dave James

        Tom Harris is mistaken.

        According to IPCC Fifth Assessment Report was finalized in 2014: FAQ 2.2 | Have There Been Any Changes in Climate Extremes? “There is strong evidence that warming has led to changes in temperature extremes—including heat waves—since the mid-20th century. Increases in heavy precipitation have probably also occurred over this time, but vary by region. However, for other extremes, such as tropical cyclone frequency, we are less certain, except in some limited regions, that there have been discernible changes over the observed record. “

        According to NOAA’s National Centers for Environmental Information (Formerly the National Climatic Data Center) Third U.S. National Climate Assessment 2014: “Some extreme weather and climate events have increased in recent decades, and new and stronger evidence confirms that some of these increases are related to human activities.”

        • TomHarrisICSC

          Yes, the IPCC said what you said. They also said what I said. My point is that they are uncertain.

          • Dave James

            Uncertainty is inherent in the scientific process.

            Tom Harris wrote, “It is wrong to make a link between extreme weather and global warming.” NOAA’s National Centers for Environmental Information (Formerly the National Climatic Data Center) directly contradicts his claim.

            Tom Harris’s statement that IPCC says the a relationship between global warming and rainfall has not been demonstrated is false.

            The IPCC states, “There is strong evidence that warming has led to changes in temperature extremes—including heat waves—since the mid-20th century. Increases in heavy precipitation have probably also occurred over this time, but vary by region.”

            • TomHarrisICSC

              Yes, that is one quote. I used another from the IPCC. My universe has room for your point of view. Does you universe have room for mine?

            • Dave James

              Yes, we share the same universe and both have points of view.

              Mr. Harris, you did not quote from the IPCC. You made an assertion about the IPCC dated 2012. Your assertion is contradicted by my quote from IPCC in 2014.

              Can you understand why I find you comments mistaken?

            • Mobius Loop

              “Does you universe have room for mine?”

              ….. yes, in so much as we can recognize that industry funded fraudsters exist.

            • TomHarrisICSC

              There you go, proving what sort of person you are, making up charges that you cannot substantiate.

        • Sparafucile

          “Less certain” than “probably”.

          Wow.

          Compelling.

          • Dave James

            “Strong”, “probably” and “less certain” more compelling than four California weather data points.

    • Dave James

      According to NOAA’s National Centers for Environmental Information (Formerly the National Climatic Data Center): “Global climate is changing and this is apparent across the United States in a wide range of observations. The global warming of the past 50 years is primarily due to human activities, predominantly the burning of fossil fuels.” https://www.ncdc.noaa.gov/climate-information/climate-change-and-variability.”

      According to the IPCC: “Human influence on the climate system is clear, and recent anthropogenic emissions of greenhouse gases are the highest in history. Recent climate changes have had widespread impacts on human and natural systems.” http://www.un.org/climatechange/the-science/

      The Intergovernmental Panel on Climate Change (IPCC) is a scientific intergovernmental body, set up at the request of member governments. It was first established by the World Meteorological Organization (WMO) and the United Nations Environment Programme (UNEP).

      The NIPCC does not follow the same rigorous scientific evaluation process as the IPCC. NIPCC is sponsored the Heartland Institute. http://climatechangereconsidered.org/

      The Heartland Institute is the primary American supporter of climate change denial. Heartland uses a characterization from The Economist, “the world’s most prominent think tank promoting skepticism about man-made climate change” as a banner on the main page of the environmental section of their website. https://www.heartland.org/issues/environment

    • Dave James

      Tom Harris is mistaken.

      According to IPCC Fifth Assessment Report was finalized in 2014: FAQ 2.2 | Have There Been Any Changes in Climate Extremes? “There is strong evidence that warming has led to changes in temperature extremes—including heat waves—since the mid-20th century. Increases in heavy precipitation have probably also occurred over this time, but vary by region. However, for other extremes, such as tropical cyclone frequency, we are less certain, except in some limited regions, that there have been discernible changes over the observed record. “

      According to NOAA’s National Centers for Environmental Information (Formerly the National Climatic Data Center) Third U.S. National Climate Assessment 2014: “Some extreme weather and climate events have increased in recent decades, and new and stronger evidence confirms that some of these increases are related to human activities.”

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