Breakthrough on Loss and Damage Funding at COP27: A Need to Incorporate Human Rights Principles

A. Karim Ahmed

It is not entirely clear what finally broke the logjam on loss and damage funding at the COP27 meeting held in the Red Sea resort town of Sharm el-Sheikh, Egypt (November 6-18, 2022).

Was it the threat made by European Union countries to walk away from the meeting or the isolation felt by the United States delegation in holding to their hard stance on loss and damage taken by them over the past 30 years? Some believe that John Kerry’s COVID-19 infection during the second week may have even played a part, with his attempts to negotiate the US weakened position by phone from his hotel room.

Regardless of what happened during closed door negotiations to bring about this historic achievement by the waning hours of COP27, it became clear to many observers that a multilateral financing framework on loss and damage was about to emerge. There is little doubt that the delegates experienced enormous pressure from developing countries representatives and civil society groups that attended in large numbers.

“This COP has taken an important step towards justice,” said UN Secretary-General António Guterres at the conclusion of the two-week conference, “I welcome the decision to establish a loss and damage fund and to operationalize it in the coming period.”

In the December 2021 issue of this Journal, in a special section on health rights and the climate crisis, Audrey Chapman and I wrote a paper in which we argued that human rights principles of accountability and redress should be used to drive a concept of climate reparations. This then developed into a comprehensive Global Council for Science and the Environment (GCSE) Policy White Paper on climate-related loss and damage and financial reparations, and my attendance at COP27, as a member of the GCSE delegation. In the White Paper, which was shared with key members of government agencies and civil society organizations, we again proposed the creation of an international funding institution for assisting vulnerable communities in all regions of the globe.

Prior to and during COP27, GCSE corresponded and met with Sherry Rehman, Pakistan’s Minister for Climate Change and Chair of its country’s delegation, who took a lead role in the meeting’s negotiations over loss and damage funding. We suggested a four-point international program to be adopted at COP27:

1. Setting up an institutional framework for a multilateral financial mechanism for loss and damage, consistent with the provisions of the Warsaw International Mechanism for Loss and Damage and Article 8 of the Paris Agreement.
2. Priority for financial assistance on loss and damage should be given to adaptation programs and those related to building resilience.
3. Establishing a permanent insurance program for loss and damage, and disaster relief, with premiums/donations allocated to parties according to current and cumulative greenhouse gas emissions.
4. Developing a joint multilateral/bilateral in-kind assistance program for: (a) technology transfer on adaptation programs and resilience building, (b) capacity building and sharing of technical expertise, and (c) intensive training programs on resilience building in the community.

It appears that the basic elements of the above proposal, which incorporates some of the human rights principles outlined in our paper, were adopted at COP27. Buried in the text of the agreed-upon final COP27 document is the operational language–under the section on “Long-term climate finance”–that establishes the new multilateral funding framework for climate-related loss and damage, in particular:

7 Reiterates the need for grant-based resources in developing countries, in particular for
adaptation, and in particular for the least developed countries and small island developing
States;

8 Also reiterates that a significant amount of adaptation finance should flow through
the operating entities of the Financial Mechanism, the Adaptation Fund, the Least Developed
Countries Fund and the Special Climate Change Fund;

9 Emphasizes the need for further efforts to enhance access to climate finance, including through harmonized, simplified and direct access procedures;

10 Requests Parties to continue enhancing their enabling environments and policy frameworks to facilitate the mobilization and effective deployment of climate finance;

11 Reiterates that the secretariat, in collaboration with the operating entities of the Financial Mechanism, United Nations agencies and bilateral, regional and other multilateral
channels, will continue to explore ways and means to assist developing country Parties in
assessing their needs and priorities in a country-driven manner, including their technological
and capacity-building needs, and in translating climate finance needs into action.

It is noteworthy in paragraph 7, that the key provision is on the need for grant-based resources in developing countries, avoiding the financial trap that many low-income countries have recently faced with non-concessional loans from the private sector. In addition, forward-looking, preventative adaptation financing is clearly emphasized in paragraph 8, as has been proposed by developing countries. Finally, in paragraph 11, the document calls for bilateral, regional and multilateral cooperation that includes consideration of “technological and capacity-building needs”.

Now begins the hard part of turning the COP27 agreement adopted at Sharm el-Sheikh into reality and truly addressing the needs of vulnerable communities ravaged by climate change around the globe. For example, will Pakistan be compensated for the recent massive flooding in its Indus River basin? What kind of financial assistance will be given to people who have suffered persistent drought in the Horn of Africa in recent years? Extreme weather events have decimated many climate-vulnerable, low-income communities in sub-tropical and tropical regions of Asia, Africa, and Latin America in recent years.

This raises the question of who is responsible for climate-related loss and damage?  This has been taboo topic for many high-income country representatives at global climate meetings during the past few decades. Among other commentators, we have suggested that this should be decided on considerations of current and historically cumulative greenhouse gas emissions (see Tables 1 and 2). Therefore, the policy challenge for establishing an institutionally viable climate-related loss and damage fund is now dependent on the precise financial reparations mechanism systems put into place.  We believe these must reflect human rights principles of equity, transparency, and accountability.

Table 1  Annual Carbon Dioxide Atmospheric Emissions Among Top Ten Countries (2018)

Source: IEA Atlas of Energy, International Energy Agency

Table 2: Historical cumulative carbon dioxide emissions 1750-2018, by country and region

Source: Our World in Data, Oxford Martin School

A. Karim Ahmed PhD, is an honorary professor at the University of Cape Town, South Africa; an adjunct professor of occupational and environmental medicine at the University of Connecticut School of Medicine, USA; and a founding board member of the Global Council for Science and the Environment, Washington, DC, United States