The first session of the Glasgow Climate Dialogues, the informal meetings on climate change loss and damage (L&D), formally concluded on June 11, the first step in a cycle of working sessions that will take place each year during the first session of the Subsidiary Body for Implementation (SBI) until June 2024.

There seems to have been no progress in finding common solutions between the conventionally defined countries of the global south and north, visions diverge profoundly, and the discussion so far has been dominated by insurance approaches to the problem. The difficulty in managing the losses and damages caused by climate change impacts with funds that should be distributed as needed with an insurance system stem from the very nature of insurance contracts, which are based on the likelihood of something happening or not happening, not allowing for insurance of something that has already happened or has already been damaged. Climate change has already caused major damage in those countries that have contributed the least to the emissions causing the phenomenon. What countries in the global South are trying to achieve is a system that is instead based on the needs of the people who are already facing the most dramatic consequences of climate change, and which, therefore, recognizes the historical responsibilities of climate-changing emissions.

This tension and divergence of visions was reflected in what was the most significant fact of the dialogues, namely the revival of the proposal by the countries part of the Group of 77 and China (G77 & China) for the creation of a loss and damage financing facility, the Loss and Damage Finance Facility (LDFF). The initiative presented to the COP26 chair, drew from an earlier proposal developed by the Alliance of Small Island States (AOSIS), was later blocked by the U.S., U.K. and European Union, being excluded from the concluding documents of the Glasgow negotiations. The creation of the Glasgow Climate Dialogues on Loss and Damage is a direct result of the failure to agree on this initiative, a weak replacement that currently remains without precise goals, modes of action and timelines for implementation.

Countries part of the G77 & China alliance (134 states representing 85 percent of the world’s population), reaffirmed during the Glasgow Dialogues that they aim to create a dedicated loss and damage financial structure at COP27. An ambitious commitment, difficult to achieve, but certainly a clear signal of the division that unfortunately lingers during the dialogues. Civil society supports the initiative and is promoting the document “The Loss and Damage Finance Facility: Why and How” (The Loss and Damage Finance Facility: Why and How) to give concrete answers to negotiators on what form this financing facility should take.

Among the features to be an ambitious and effective mechanism for loss and damage management, the LDFF should:

  • be reserved exclusively for loss and damage management, becoming the third pillar of the financial mechanism underlying the operation of the UNFCCC;
  • be the main vehicle for coordinating, mobilizing and channeling new, additional financial resources. Financial flows must be commensurate with the complexity of the issues to be managed and with predictable access mechanisms to help requesting countries plan for loss and damage management immediately, but with a long-term view;
  • be capable of receiving and administering financial contributions on an ongoing basis from a variety of sources (public sector, private sector, philanthropic contributions, and innovative/alternative financial sources, such as shares of proceeds and revenues from taxes and fees collected from the application of the principle that “the polluter pays”);
  • be placed under the Warsaw International Mechanism for Loss and Damage (WIM) ensure that it is permissible for all developing countries that are party to the Paris Agreement to receive financial support regardless of any contribution to their scale to cover economic and non-economic losses and damages;
  • provide streamlined access to funding, allowing both international access (through international entities) and direct access (through regional, national and subnational entities) as needed and requested by recipient countries.

Civil society has a strategy to coordinate with the G77 & China group to put pressure between now and COP27 on those countries that are standing in the way of the creation of a dedicated financial mechanism for loss and damage and stop counterproposals to redirect dedicated funding to humanitarian crises and other states of international emergency for their management. This proposal risks weakening the management of loss and damage by tapping into financial funds that are already inadequate for the crises they must manage, given their voluntary and temporary nature, taking away the ability of countries affected by the consequences of climate change to be able to rely on predictable and established financial flows with which to create real climate change adaptation solutions.

Article by Chiara Soletti, Policy Advisor and Climate and Human Rights Section Coordinator

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