Egypt COP27: Loss & Damage officially on agenda, what is it and why is it so contentious?

Officialising this year’s COP agenda was delayed due to on-going discussions over the exact wording, sources in both the Dutch and Egyptian delegation told The Africa Report. The wording was in relation to loss and damage, an issue that has not been widely accepted for some time now.

“This issue, as the Secretary has mentioned, has been with us for a substantial number of years. There have been reservations here as to the extent and the responsibilities that might be entailed, [following] the [official] addition [of] this item on the agenda that we have set for this year, specifically,” says Sameh Shoukry, Egypt’s Foreign Minister and President of this year’s COP27, when asked by The Africa Report during a press conference on Sunday. He added that there was a “change in the positions of six delegations that had reservations”.

Why has loss and damage been such a contentious issue?

Understanding ‘loss and damage’

For Africa in particular, the issue of loss and damage has been a priority for over a decade, but little has materialised from this pressure, Chris Vandome, a senior research fellow at the Africa Programme at Chatham House, tells The Africa Report.

“African countries are highly vulnerable to increased climate shocks, and often rely on social-cultural forms of resilience. Some African countries have included loss and damage into their Naturally Determined Contributions (NDC),” he says.

With Africa contributing to only 3-4% of the world’s greenhouse gases, it is the continent that has been hit the hardest by the impact of climate change and described as “the most vulnerable” by the latest report by the Intergovernmental Panel on Climate.

Much of the talk surrounding climate change has been focused on funding, whether private or public money. But loss and damage is specific to the costs countries are already incurring from climate-related weather extremes, such as floods from rising sea levels.

But holding those responsible for climate change effects, namely the developed countries, is the major obstacle. As one minister from the Egyptian delegation told The Africa Report, what the continent wants is a win-win solution, but what most want is a one-way win.

Both developed and developing nations are touched by loss and damage, but developing countries lack the financial means to address such a cost. And such a cost is estimated at a total of $525bn from damages incurred in the past two decades, according to a report in June by the Vulnerable Twenty Group , which consists of 58 nations.

Agreeing on the funding in this case is difficult as it’s compensating inevitable costs to countries that cannot be avoided through adaptation or mitigation (reducing emission projects). “This should include the form of a finance facility or mechanism for loss and damage. [An] agreed estimate on the cost of loss and damage – both in economic and environmental terms.

“And a position on from whom and in what form loss and damage support should come from, cognisant of the political challenges, but reflecting a need for broad partnerships and innovative financing,” says Vandome.

If a fund was launched, the details of who funds it, how much, and over which disasters, would have to be agreed upon.

• Last year, both the EU and the US blocked such a proposal, opting instead to engage in dialogue, but details of an actual fund remain vague.
• The Alliance of Small Island States has proposed an international solidarity fund hosted by the UN to collect money from a variety of sources for countries hit by disasters.
• The EU has suggested using existing international funds rather than creating a new one for loss and damage, but critics say such funds encounter many delays that they would not be of much use when money is needed immediately.

‘A new era’

COP26 was seen by many as full of promise, but a year later, wrought with disappointment given that many of the promises were not followed through on.

To that, COP27 is when “new era begins” said Simon Stiell, the new executive secretary of the United Nations Framework Convention on Climate Change, at the opening of the conference on Sunday.

He referred to last year’s COP26 as delivering a plan, but spoke of COP27 being the one to move to implementation through accountability, namely through the often-avoided issue of loss and damage.

“We will be holding people to account; be they presidents, prime ministers, or CEOs, and accountability chief […] because our policies, our businesses, our infrastructure, our actions, be they personal or public must be aligned with the Paris Agreement and with the convention.”