- What does loss and damage mean?
- Why do we care about loss and damage?
- What does loss and damage look like in reality?
- What are the economic impacts?
- How can you put a price on livelihoods, lives and cultures?
- How would the money be spent?
- Who will pay for the fund?
- Why should money for loss and damage be provided as grants, not loans?
What does 'loss and damage' mean?
'Loss and damage’ is a term used in UN climate talks to refer to the consequences of climate change that go beyond what people can adapt to. Like when extreme droughts turn farmland into dust.
The climate crisis is affecting vulnerable communities around the world. People are losing their homes and their livelihoods right now.
Some of the loss and damage that's occurring can be measured in economic terms, such as impacts on farming or tourism - but the loss of lives or the trauma of having to migrate from your ancestral home is much harder to quantify, and even more devastating.
' We can’t adapt to the loss of our cultures, the loss of our identities, the loss of our histories. We can’t adapt to extinction or to starvation. We cannot adapt to loss and damage.' - Vanessa Nakate (2022)
Why do we care about loss and damage?
Put simply: because it harms vulnerable communities the most, pushing them deeper into poverty.
As Christians we're called to love our neighbours; as our neighbours suffer the devastating impacts of the climate crisis, we are called to act.
Given that these communities are often least responsible for climate change, it's also an issue of justice.
What does loss and damage look like in reality?
Nushrat Chowdhury, Christian Aid’s Climate Justice Advisor, said: 'Being from Bangladesh, I’ve seen how loss and damage is already affecting my people. Houses, lands, schools, hospitals, roads are being lost and damaged by floods and cyclones. People are losing everything. Sea levels are rising.'
In Bangladesh there were 10 cyclones between the years 2007 and 2021. The last cyclone in 2021 impacted more than 1.3 million people’s lives and damaged around 26,000 houses.
You can hear more of what loss and damage looks like from our stories and views on loss and damage section.
What are the economic impacts?
Our recent report shows that due to the impacts of climate change African countries are likely to see an average GDP hit of -20% by 2050, if we remain on our current pathway of global temperature rises reaching 2.7 degrees. Even if countries keep the global temperature rise to 1.5 degrees, as set out in the Paris Agreement, Malawi for example will still experience a -13% reduction in its GDP by 2050.
Despite contributing the least to climate change these reductions in African countries' economies will lessen their funds and thus abilities to tackle poverty, boost healthcare and build more infrastructure.
Debt and austerity
Moreover, most climate-vulnerable countries are currently having to borrow money to pay for loss and damage which simply adds to their debt burden.
Christian Aid’s Africa Advisor Joab Okanda is based in Kenya. He explains: 'The roads that we’re building from borrowed loans are being washed away and we have to repay these loans, our people are having to endure austerity measures because our government has to rebuild schools and roads, people are going to bed hungry.'
What are we calling for?
We believe that countries and polluters who’ve done the most to cause the crisis must pay up for the loss and damage that their actions are causing.
At the United Nations climate talks in 2022, governments agreed to create a loss and damage fund. But there was no agreement about how to deliver the fund; how much should be paid by whom, and over what time period.
We’re calling on governments across the world to ensure finance is quickly mobilised for this new loss and damage fund.
In the UK we’re calling on the Prime Minister to:
- Push for the companies and countries most responsible for loss and damage to pay the most into the new fund
- Ensure the money in this fund is new rather than taken from existing climate finance and aid budgets, and is delivered as grants, not loans.
- Ensure the money in this fund reaches the communities affected by loss and damage.
How can you put a price on livelihoods, lives and cultures?
You can't! Lives, culture, homes - these things are priceless.
The loss and damage finance we're calling for will never be sufficient reparation for the damage caused, but it will offer some respite and protection to those experiencing the worst of the crisis, and help and empower them to rebuild their lives.
How would the money be spent?
We are calling for money to be paid into an international fund for loss and damage, and then allocated directly to impacted communities
For example, the fund could provide money:
- towards rebuilding homes flattened by floods or cyclones
- to enable people to relocate when rising sea levels make it impossible to stay where they are
- for people who can no longer farm (because the rains have stopped in consecutive years) to retrain and secure alternative livelihoods
- to rebuild roads and bridges without having to take out expensive loans
It's critically important that the world’s most vulnerable communities – especially women in these communities – can access the resources.
Who will pay for the fund?
We believe the governments of high-income countries should contribute money to an international loss and damage fund.
We know public purse strings are tight, so new and innovative sources of finance are also needed; these might include a carbon tax, an end to fossil fuel subsidies, and a frequent flyer levy, for example.
Fossil fuel companies should also be required to contribute to a loss and damage fund after all, they are making vast profits from fossil fuels which are a key driver of loss and damage caused by climate change.
Why should money for loss and damage be provided as grants, not loans?
Put simply, the countries who’ve experienced loss and damage shouldn’t have to take out loans to rebuild after climate disasters. These countries have done so little to cause the climate crisis. It would be deeply immoral to saddle them with further debt in a time of crisis. Therefore compensation must be in the form of grants.
Some members of the UK Government have argued that grants are inappropriate. They have cited reasons such as a lack of accountability that grants are spent appropriately, or even that grants effectively make developing countries more wealthy.
We believe that potential issues with transparency and effective spending of public resources (which we also have in the UK) cannot be held up as a rationale to avoid fulfilling our obligations towards countries from whom we have extracted resources for centuries and whom are suffering because of a climate crisis caused largely in the global North. Furthermore, the idea that we shouldn’t provide grants to a country like Pakistan after the devastating floods of 2022 because it would make Pakistan ‘more wealthy’ is preposterous.
Why are we working on loss and damage, rather than preventing damage from climate change in the first place?
We must keep striving to keep the 1.5 degrees temperature rise target alive. This will prevent further irreversible loss and damage from the climate crisis.
And we must support communities to adapt to the impacts of the climate crisis which they are already experiencing. Indeed, the more we can support communities to adapt, the less loss and damage is likely to occur.
But a significant amount of loss and damage is inevitable even if we manage to keep global temperature rises to 1.5 degrees. And at present, millions experiencing loss and damage have no means of paying for it, even though they have done the least to cause the climate crisis in the first place.
This is why loss and damage finance is so urgently needed.
What is the difference between loss and damage finance and international climate finance?
International climate finance (ICF) is intended to support countries to transition to low carbon economies and to adapt to climate impacts. It is often associated with the target to mobilise $100 billion a year for developing countries.
Whereas the calls for loss and damage financing are related to the irreversible costs of climate impacts, beyond what can be adapted to.
These are two different aspects of the response to the climate crisis. Loss and damage finance needs additional resources, on top of what’s been promised for ICF.
The UK government’s has pledge to get to £11.6 billion a year for ICF by 2026. It has yet to pledge any money for loss and damage.
Has there been any progress so far?
Some, but nowhere near enough.
And that's why public pressure is needed. We must keep the pressure up and ensure those most responsible for the climate crisis pay up for the damage caused.
Progress so far:
- After 30 years of campaigning, led by countries and civil society from the south, at COP27 governments agreed to create a loss and damage fund. This is a huge campaign victory!
- But there was no agreement about how to deliver the fund; how much should be paid by whom, and over what time period. In 2023 details for the fund are going to be discussed, it’s vital that rich countries and polluters deliver the money needed, without delay.
- Whilst there’s still no money in the fund, some countries have made small commitments, the Scottish Government has committed £5 million and Denmark followed announcing £12 million for loss and damage- this is nowhere near enough but we hope this will encourage more financial commitments from other large polluting countries.
What opportunities are there to make a difference?
Together, we can make a difference here in the UK, and put pressure on the UK Government to make a financial commitment to loss and damage.
As a historical polluter the UK taking action on loss and damage can provide a pathway for other similar nations. This means we have the power and responsibility to make a difference.
Key moments and opportunities in 2023
- Loss and Damage Action Day in September
- COP28 UN climate talks in the United Arab Emirates in November.
Beyond any specific moment, we need the UK Government to hear loud and clear that people in the UK care about this issue and expect the UK Government to take this forward.
We have a suite of resources to help you raise this issue in your church and wider community.