By Zulker Naeen
December 1, 2017
During the last two decades, the UNFCCC focus has shifted from ‘mitigation’ to ‘mitigation and adaptation.’ And it now finally included ‘Loss and Damage’ in its current agenda. The emergence of ‘Loss and Damage’ as a focus area of the international climate policy arena is caused by the realization that existing mitigation commitments and actions won’t prevent dangerous climate change-related impacts.
Moreover, not all climate change impacts can be successfully adapted to, be it due to financial, technical or physical constraints. Hence, climate change will lead to unavoidable losses induced by extreme weather events as well as slow-onset changes.Vulnerable countries, like Small Island Developing States, already experience loss and damage and the scope will increase over the next years.
The COP23, the first “Island COP” with Fiji as a presidency, provides a unique opportunity for Small Island Developing States and other vulnerable developing countries to raise awareness for their climate change-related challenges, and to bring their concerns into the center of the negotiations.
Within UNFCCC, the establishment of the Warsaw International Mechanism for ‘Loss and Damage’ in 2013, got embedded institutionally within the international climate regime – providing a platform to explore and identify effective responses to climate change induced Loss and Damage, to expand the understanding of climate consequences and to find an appropriate mix of tools to address ‘Loss and Damage’.
However, ‘Loss and Damage’ is an ambiguous and multifaceted concept for the vulnerable countries, especially those disproportionally affected by climate change, have highlighted the need for compensatory measures. In contrast, developed countries have sought to limit discussion of liability and compensation, framing loss and damage as a matter of adaptation. The trade-off was that developed countries would “enable action and provide support to developing countries” to deal with the ‘Loss and Damage.’
“Developed countries can’t keep putting off the issue. It must feature in the global stock take of steps being taken by governments around the world to combat climate change.” Sandeep Chamling Rai, senior adviser for global adaptation policy, WWF International.
But, according to Harjeet Singh, global lead on climate change for ActionAid International, “Loss and Damage is at the core of the COP23 agenda. It is now the third pillar to combat climate change, becoming more important as the first two pillars mitigation and adaptation were not strengthened when they were supposed to be.”
At the COP23, another major global initiative launched to provide insurance to 400 million poor and vulnerable people around the world by 2020. The project, called the InsuResilience Global Partnership, aims to provide insurance against the damage increasingly being caused by global warming.
This scheme for both Climate and Disaster Risk Finance and Insurance Solutions at COP23, the first Partnership Forum brought together signatories and aspiring members in a joint effort to lay the foundation for effective collaboration in the field of financial protection against climate change.
The InsuResilience scheme started in 2015 by the G7 earlier. Patricia Espinosa, the UN’s climate chief, said: “People devastated by recent weather events and communities vulnerable to climatic impacts are looking to the nations meeting in Bonn for an answer. This new, higher ambition initiative represents one shining example of what can be delivered.”
It represents a joint effort of G20 and V20 countries to protect vulnerable populations from the adverse effects of climate change. More than 30 partners from governments, civil society, international organizations, academia and the industry have already expressed their support and commitment.
The forum provided an inclusive platform for participants from all sectors to discuss the role of the partnership for the broader resilience agenda and to develop concrete priorities and measures that will help build greater resilience for disproportionately affected countries. The Global Partnership Forum will take place annually to facilitate communication and exchange of information and knowledge among its members.
“The global partnership is a practical response to the needs of those who suffer loss because of climate change,” said Frank Bainimarama, prime minister of Fiji. The small island’s chairing of the climate talks has highlighted climate impacts, and climate insurance has been one of the major themes of discussion.
The UNFCCC Executive Committee of the Warsaw International Mechanism for Loss and Damage also launched a clearinghouse for risk transfer – a repository of information on insurance and related subjects.
The partnership forum might create the new door of negotiation where climate insurance is being one of the key strategies to better prepare countries for climate change. In Bonn, a growing number of member states planned to include insurance strategies in their efforts to achieve the goals of the Paris Agreement. However, international NGO ActionAid said that insurance is not a safety net for all.
“Insurance might turn out to be a piece of the puzzle, but we can’t pretend that it’s a safety net for everyone,” said Harjeet Singh. “Insurance does sometimes help people who are impacted by floods or cyclones, but it won’t be an option for those facing certain losses. Private companies are unlikely to sell insurance to those facing rising sea levels.”
Still, it is an important question, who will bear the costs of insurance premiums for the various global initiatives. Should the poor people in vulnerable countries, need to pay for climate insurance? On the one hand, developed countries aren’t allowing UN climate talks to make any progress on the issue of climate finance. In conclusion, it is hard to say that the insurance initiatives for vulnerable to climate change impacts are on the right pathway. It is yet to pinpoint the requirements to do to account for the loss and damage suffered by communities.
However, the Warsaw International Mechanism has developed three areas of work: knowledge generation, coordination, and enabling action and providing support to developing countries.
The main dilemma is that there has been no progress on finance in this area. There is no estimate of how much money is and will be needed by countries suffering climate change-induced loss and damage now and in the future.
Within UNFCCC, Warsaw International Mechanism is preparing a report on this, but it is not scheduled for completion until June 2019. Meanwhile, such a report is being prepared by COP23 delegates, mainly from the United States and Australia to block all discussions on finances around loss and damage.
Many governments have emphasized the role of insurance firms in dealing with Loss and Damage; firms which have already reported record payouts this year following a series of storms in North America and the Caribbean, and floods in South Asia.
Nevertheless, it has pointed out that, the insurance policies did not take care of climate impacts that are relatively slow, such as drought, sea level rise and ocean acidification, which are the severe climate change impact faced by the Pacific region.
Now, it is a challenge for the vulnerable countries to develop their working mechanisms to satisfy Warsaw International Mechanism to step forward the progress on finance.
The fact, ‘Loss and Damage’ clearly reflect the divide between developed countries and those most vulnerable countries. About 44% of the Small Island Developing States and 34% of the Least Developed Countries refer to ‘Loss and Damage’ in the ‘Intended Nationally Determined Contributions’ made under the Paris Agreement, none of the industrialized countries do.
In such dilemma of financial solutions, many governments in the vulnerable countries have started developing their mechanisms for ‘Loss and Damage.’ For example, Bangladesh has already set aside contingency funds for climate-related disasters, now is being considered as the development of a dedicated ‘Loss and Damage’ mechanism. Other countries have developed regional risk pooling solutions – such as the Caribbean Catastrophe Risk Insurance Facility (CCRIF) – or national insurance mechanisms. Most importantly, these mechanisms need to be able to reach those most in need of financial support: poor households with a high dependency on natural resources for their livelihoods.
References:
ACT News. (2017). Addressing loss and damage from climate change at COP23. Amman, Jordan: ACT Alliance.
Eco-Business. (2017). NGOs may take nations to court over climate loss and damage. Ascent Singapore: Eco-Business.
GIZ. (2017). First InsuResilience Global Partnership Forum Paves The Way For Coordinated Action. Bonn: insuresilience.org.
Kreienkamp, J., & Vanhala, L. (2017). Climate Change Loss and Damage. Belgium: Global Governance Institute.
Künzel, V., Schäfer, L., Minninger, S., & Baldrich, R. (2017). Loss And Damage at COP23. Berlin: Germanwatch e.V.
The Third Pole (2017). COP23: Climate Insurance Not Enough For Loss And Damage. New Delhi: The Third Pole