Climate-Related Loss and Damage - Finding a Just Solution to the Political Challenges

By Sabine Minninger, Bread for the World – Germany

Climate change is not a challenge for some far off future. Alone the increase of unusual and extreme weather events, such as the cyclones that hit Mexico and Vanuatu or the current extreme drought in California and flooding in Southeast Asia, is evidence of this. Globally, last year was the warmest year since records began. Moreover, the available data so far suggests that this year will be even warmer still. Partner organisations and ACT-members from the Global South, where the effects of global warming are felt stronger than the worldwide average, point with increasing urgency to how altered weather patterns and extreme weather events are already drastically affecting the lives of millions of people. On the one hand, this is due to ocean warming, which has led to increasingly strong typhoons and rising sea levels that destroy the homes of millions. On the other hand, however, this imbalance is also owed to the fact that a high percentage of the population is directly engaged in highly weather-dependent agriculture, and many people lack the means and capabilities to adapt to unexpected torrential rainfall or drought.

Extreme weather events such as heat waves and droughts, torrential rainfall and storms are nothing new, but over the last thirty years their frequency and intensity has increased. Global warming is causing this: when temperatures rise, more energy is available in the climate system and this affects atmospheric circulation. Extreme weather events have consequences: as natural disasters, they cause great destruction, economic damage and the loss of human life. The probability of falling victim to climate extremes, however, is distributed unequally across the globe: droughts, which frequently lead to famines and claim many lives, mainly affect the countries on the southern fringes of the Sahara desert. Heat waves, such as in 2003 in Europe, 2010 in Russia or 2015 in India, can kill tens of thousands of people, trigger forest wildfires and cause immense damage. Storms inflict the greatest economic damage. Particularly, they wreak havoc on the islands and coastal regions falling in the path of storms in Asia, Oceania, Central America and the Caribbean.

Climate change-related damages has quadrupled since 1992

The last decades have seen a constant increase in climate related loss and damage as a result of global warming. One distinguishes between risks of extreme events (droughts, floods, storms) and risks of slow onset events (e.g. seal level rise, changing weather patterns, increasing temperatures). According to estimates by the United Nations Office for Disaster Risk Reduction (UNISDR), climate related events caused and contributed to the death of 559,000 people between 1992 and 2012. According to data from the insurance company Munich Re, economic losses related to extreme weather events have quadrupled since 1992 to more than $ 140 bn per year. In the IPCC special report titled Managing the Risks of Extreme Events and Disasters to Advance Climate Change Adaptation, climate researchers warn that the frequency of extreme events will continue to rise.

Poor countries suffer the greatest climate change-related risks and losses

Loss and damage associated with climate change has a disproportionate impact on developing countries. Two factors help explain this higher risk faced by many developing countries. First, geography makes them more susceptible to climate change-related natural disasters such as storms and droughts, and the second factor is their greater general vulnerability. The link between poverty and vulnerability to the impacts of climate extremes can be seen in the high numbers of victims of extreme events, the fact that proportionally the greatest economic damage occurs in low-income countries, and in the great number of people displaced by climate related natural disasters. Including the internally and the temporarily displaced, the Nansen Initiative, founded by Switzerland and Norway, estimates this affected 140 million people between 2008 and 2013. The potential disappearance of island nations such as Tuvalu and Kiribati is another extreme case. Many countries have since made improved climate risk management their top priority, yet still require further support.

Based on the data from Munich Re’s NatCatService, the NGO Germanwatch publishes its yearly climate risk index providing information on the countries worst affected by climate -related extreme weather events. The Global Climate Risk Index for 2015, spanning 1994 to 2013, ranks Honduras, Myanmar and Haiti as the top three countries, followed by another six low-income countries and only one lower-middle-income country (Vietnam). Since the index was first published ten years ago, low-income countries have always ranked highest; further proof that climate change causes heavy human casualties and significant economic losses in poor countries in particular. Only two industrialised countries rank among the current top twenty countries, compared with sixteen countries with a yearly per capita income of 4,125 dollars or less. The two regions of South/Southeast Asia and Central America/the Caribbean each have five countries in the top ten. Both regions are threatened particularly frequently by extreme storms and torrential rainfall.

Climate damage according to sector

Agriculture and fisheries is the most affected sector of the economy, suffering 25 per cent of all damage, whereby droughts cause the greatest damage (44 per cent), even before floods (39 per cent) and storms, and economically often entail humanitarian catastrophes.

Buildings and public infrastructure (roads, railroads, harbours, bridges etc.), in particular in coastal regions, the Arctic and high mountain regions, also suffer great damage. The four mega-storms Mitch (Central America), Haiyan (the Philippines), Sandy (US and Caribbean) and Nargis (Myanmar) alone caused over 100 billion US dollars in damage to buildings and other infrastructure that even years later has still not been completely repaired.

Third comes energy generation: increasingly dry summers in Europe mean that a lack of cooling water increasingly leads to large-scale power plants being switched off, whilst heat waves in the mega-cities of developing nations lead the overstrained energy grid to collapse when too many people switch the air conditioning on. Electricity lines and pipelines are susceptible to damage by storms, forest fires and thawing permafrost. 

Climate-induced migration: between adaptation and means of last resort

According to a study by the Norwegian Refugee Council, twenty-two million people lost their homes due to natural disasters in 2013, which is three times more than as a result of conflicts. Climate migration, therefore, is by no means a far off future scenario; even today it is already a reality on a massive scale.

People in the poorest regions in the world in particular see themselves forced to leave their homes, because climate change destroys the basis of their livelihood. Solid forecasts on the extent to which climate change will in future force people to leave their homes, as well as regions where this will occur, do not exist. Whether and how people are driven to migrate or become displaced depends to a great degree on their capacity to adapt to climate change, as well as on the kind of support they receive.

In extreme cases of climate change-induced migration, people need to be resettled. In fortunate cases, this is a planned process that gives people time to adapt and provides the necessary support. In less fortunate cases, they are forced to give up their homes, are left to themselves and do not know where to go. This mostly happens to people already living under precarious conditions in areas associated with high climate risks.

Minimising risks and insuring damage

In 2014 natural catastrophes caused 110 billion US dollars in losses, of which only thirty-one billion (twenty-eight per cent) was ensured (Munich Re (2015): Review of Natural Catastrophes in 2014. Press Release, January 7^th, 2015). Risk transfer through Insurance is thereby limited nearly exclusively to high-income countries. In countries with low or very low income, insurance is practically unknown (see table 2). As illustrated by the Climate Risk Index, it is precisely the people in these countries who need insurance, yet are unable to afford it.

A rapid expansion of insurance against climate-related losses in developing countries would be an important response to increasing risks. Success will depend to a great degree on whether intelligent public-private-partnership arrangements can extend insurance to the poor, which as a group cannot afford insurance and are not a primary target group for insurance companies.

Even insurance, however, has its limits. Damage that is almost certain to occur is uninsurable. This applies, for example, to damage from rising sea levels. Such inevitable losses require other compensation instruments. Developing these is a pressing issue.

Risk reduction strategies to increase resilience and mitigate damage are highly relevant. To be successful, they must build on local knowledge. Frequently, though, local strategies have their limits in preventing damage is limited. Here, international cooperation is required, alongside extensive research and investment. This applies in particular to support for the most vulnerable populations.

The measures taken so far are incapable of effectively reducing climate risks and mitigating damage. On the contrary, the risks and damage threaten to continue increasing over the coming years. This will happen even if the most important measure to limit future loss and damage associated with climate change is successful – namely, halting the current trend of ever-increasing greenhouse gas emissions. Eventually a dangerous climate risk gap could develop that in particular threatens the most vulnerable countries and people in society, endangers successful development to date and undermines the exercising of human rights.

Climate change related loss and damage in international climate negotiations

At the level of international politics, climate change-related loss and damage has been an issue for the past twenty years, in particular under the aegis of the Framework Convention on Climate Change. However, fearing damage claims, the industrialised nations have long managed to delay negotiations. It is only since 2010, and in particular since the establishment of the Warsaw International Mechanism for Loss and Damage in 2013, that negotiations have clearly gained momentum. For the poorest nations and the small island states in particular, this question is a top priority during the climate conference in Paris. Progress in Paris is possible. The conference has the potential to finally anchor this politically controversial issue in the UNFCCC, which would make it possible to implement technical solutions.

Closing the climate risk gap– Bread for the World’s policy demands

Recognising our shared responsibility to ensure solidarity for climate change-related damage in the Paris agreement and send the victims a message of solidarity

The aim of the UNFCCC is to minimise loss and damage associated with climate change by reducing greenhouse gas emissions and promoting adaptation to climate change. A further increase in temperatures will also see damage increase. It would run contrary to all notions of justice if the victims, usually already the poor, were to not receive support. In the Paris agreement, the international community needs to recognise climate change-related loss and damage as a challenge, and commit to a shared responsibility for finding solutions based on the principle of solidarity. Rich countries with high levels of emissions bear a particular responsibility. Related to this should stand a commitment to expand work on climate change-related loss and damage under the umbrella of the UNFCCC and in particular to provide support to the least developed countries and small island nations.

Confirming and strengthening the Warsaw International Mechanism (WIM) in Paris

The UNFCCC created the WIM as an instrument to improve our understanding of climate change-related loss and damage, overcome damage through enhanced cooperation, and mobilise support in the case of a disaster. The Paris agreement should institutionally anchor the WIM in the long term, and the financial basis for a faster and broader implementation of its work programme should be ensured. Based on the results of the WIM evaluation in 2016, a decision should be taken as to whether the current institutional structure can provide adequate solutions.

Organising systematic climate risk analysis and promoting climate risk management

Minimising climate change-related loss and damage must become a priority at all levels. Areas at risk should install early warning systems and systematically conduct climate risk analyses. The results should feed into development and regional planning, and with risks being mitigated through climate risk management. Climate risk analysis and management requires international support.

Implementing the G7 climate insurance initiative and ensuring the poorest have access

Well-designed climate insurance, in particular in the form of public-private partnerships, is a central risk transfer instrument that can provide effective protection from climate change-related damage. To expand such protection to poor countries and vulnerable groups in society requires innovative approaches and international support. The G7 initiative is a good first step. Now we must find ways to provide insurance also to the poor and vulnerable groups in society.

A targeted expansion of social security networks

To enhance protection against risks and offer support in the case of climate change-related damage, the international community needs to expand and promote social security networks.

Implementing the principles and the Nansen Initiative protection agenda in climate migration

The work of the Nansen Initiative should continue and be expanded to further states. Primarily, the Nansen principles and protection agenda need to be nationally implemented.

Establishing an international fund for resettlement and rehabilitation

A fund similar to the Global Fund to Fight AIDS, Tuberculosis and Malaria should be set up to support necessary resettlements and rehabilitation measures in the event of climate damage.