“Loss and damage” is a general term used in UN climate negotiations to refer to the consequences of climate change that go beyond what people can adapt to or when options exist. Still, a community doesn’t have the resources to access or utilize them. Loss and damage are and will continue to harm vulnerable communities the most, making addressing the issue a matter of climate justice (What is “Loss and Damage”, 2022).
Loss and damage that climate change caused is a severe concern for many countries, particularly the less- and least-developed countries with high exposure to climate change impacts yet have low resources and adaptive capacity.
They are calling out to the world’s wealthy, powerful, and climate change-responsible countries to come forward with their agreed financial support in the form of climate adaptation, mitigation, finance, capacity, or technology to reduce economic losses and build resilience from the climate crisis.
At the UN climate talks in Bonn, Germany, on 8 June 2022, the Climate Vulnerable Forum and The V20 Group of Finance Ministers representing 55 of the world’s most climate-vulnerable economies called for the immediate establishment of a separate and dedicated international funding for the loss and damage crisis-level adaptation action.
Alongside the climate talks, the CVF and the V20 launched a report, “Climate Vulnerable Economies Loss Report. Economic losses attributable to climate change in V20 economies over the last two decades (2000-2019)”.
The report presents a unique study into the recent economic loss and damage suffered by the world’s most climate-vulnerable economies – the members of the Vulnerable Twenty (V20) Group and Climate Vulnerable Forum (CVF).
It also shows how climate change has already eliminated one-fifth of the wealth of these countries, or 525 billion USD, in the last two decades.
Incoming V20 Chair and Hon. Minister for Finance and Economic Planning of Ghana, Kenneth Nana Yaw Ofori-Atta, writes:
“This report demonstrates how, over the last 20 years, the most at-risk economies of the V20 lost over half their economic growth potential due to the negative effects of human-induced climate change. On average, a fifth of the GDP of our 55 economies has been eliminated – in other words, without climate change, our people would be 20% wealthier today. We are bearing this alarmingly high economic cost, despite having contributed the least to causing climate change, while also being least equipped to respond to its costly consequences.”
Although the V20 pioneered its loss and damage funding and channelled the resource to the worst affected communities, they only managed to put together small-scale grants.
Hon. Kenneth Nana Yaw Ofori-Atta says, “Still, what the V20 can do on our own is limited and only makes sense if the world’s rich, powerful and climate change-responsible nations can be inspired by our pathbreaking efforts and go beyond.”
He adds that the V20 plan to demonstrate how funding fills a vital gap in the climate finance landscape, that it can be financed effectively and efficiently, and that loss and damage funding is entirely possible at scale in the upcoming COP27 this November in Egypt.
“It should fall on COP27 to decisively act on the void of finance for loss and damage. This will be a litmus test indicating the willingness of the Parties who fuelled the current climate crisis to begin taking significant responsibility for their role in global warming and acknowledging the moral responsibility to reduce the impacts of their actions on the developing world’s poor and vulnerable nations.”
Below are the key findings of the report:
- Climate change has eliminated one-fifth of the wealth of the V20 over the last two decades. Evidence shows that the V20 would have been 20% wealthier today had it not been for the losses inflicted by climate change.
- V20 economies have lost approximately $525 billion due to climate change’s temperature and precipitation pattern effects.
- For the most at-risk countries (10% of the worst affected V20 economies), economic losses due to climate change are estimated to exceed half (51%) of all growth since 2000. The world’s most at-risk countries would be twice as wealthy today were it not for climate change.
- Economic losses cut GDP growth in the V20 by one full per cent yearly.
- The year-to-year reduction in GDP per capita growth attributable to climate change represents 25% of the actual average annual economic growth of the V20 economies in 2019. For the 10% of most at-risk countries, climate change-attributable losses to annual growth have already exceeded the average GDP growth rate (0.38% per year in 2015 – 2019).
- Nearly all V20 economies have already warmed to mean temperatures far beyond the optimal condition for generating economic growth. Additional warming will only further increase future losses.
- Given that warming is projected to exceed the 1.5°C limits in the following decades, regardless of mitigation efforts, economic losses will continue to increase even as adaptation accelerates. Adaptation needs to accelerate at a phenomenal rate both to prevent losses and offset the rise in economic losses due to temperature rise and its associated hydrometeorological extremes.
- Because the estimated economic losses due to hydrometeorological extreme events have been higher in the last two decades than in the previous two decades, the world’s most vulnerable economies are not adapting fast enough to cope with the current weather extremes.
- The report provides initial evidence that international aid support supplied to V20 economies can diminish the negative macroeconomic impacts that otherwise would have prevailed, underscoring the importance of loss and damage funding.
The Climate Vulnerable Forum (CVF) and V20 also launched the online social campaign, ‘Payment Overdue,’ in the run-up to the UNFCCC COP27 in Egypt.
The Climate-related Loss & Damage Online Social Campaign aims “to confront the global injustice of the growing fallout of the planetary climate emergency that affects the world’s vulnerable and least responsible populations most of all.”
“The #PaymentOverdue campaign highlights the absence of any internationally agreed financial support for communities that suffer Loss & Damage (L&D) due to the climate crisis, invites individuals and groups to show support for this cause, promotes information and the sharing of L&D solutions, and aims to raise funds for communities worst affected.”
To read further, click the link to the report provided in the “Source” section below.
Bhandari, P., Warszawski, N., Cogan, D., & Gerholdt, R. (2022, April 6). What Is “Loss and Damage” from Climate Change? 6 Key Questions, Answered. World Resources Institute. Retrieved from https://www.wri.org/insights/loss-damage-climate-change
Climate Vulnerable Economies Loss Report. Economic losses attributable to climate change in V20 economies over the last two decades (2000-2019). Retrieved from https://thecvf.org/wp-content/uploads/2022/05/Climate-Vulnerable-Economies-Loss-Report_Project_june_2022.pdf
Vulnerable Nations Call on Payment for Climate Damages from World’s Wealthiest and Most Polluting Countries. Retrieved from https://thecvf.org/our-voice/news/press-releases/vulnerable-nations-call-on-payment-for-climate-damages-from-world’s-wealthiest-and-most-polluting-countries