About This Opportunity
Loss and Damage associated with the adverse effects of climate change encompass irreversible Loss and Damage to economies, societies, cultures, and ecosystems. Inadequate mitigation and adaptation continue to contribute to Loss and Damage. Coordination and accelerated action are required across Mitigation, Adaptation, and Loss and Damage to reduce adverse effects on society and achieve systemic resilience. While historical inequities have driven trends in loss and damage, there is an opportunity to address this through global collaboration.
The Warsaw International Mechanism for Loss and Damage is the formal mechanism under the UNFCCC that addresses the need for enhancing knowledge, strengthening dialogue, and enhancing action and support in relation to Loss and Damage. This led to the establishment of the Santiago Network to catalyze technical assistance of relevant organizations for the implementation of relevant approaches in developing countries that are particularly vulnerable to the adverse impacts of climate change.
Loss and Damage also align closely with the work under the Sendai Framework for Disaster Risk Reduction 2015-2030. Climate change is one of the factors contributing to increased disaster risk, for example, through an increase in the frequency and intensity of disasters of extreme weather events, as well as the increased vulnerability of communities to natural hazards due to degradation of ecosystems, reduced availability of water and food, and changes in livelihoods, among others. At the same time, risk management strategies and tools offer powerful capacities for minimizing residual impacts and implementing transformational approaches to climate change. This alignment between the Sendai Framework and the UNFCCC’s Loss & Damage agenda reinforces the global commitment to reducing disaster risks and building resilience, ensuring that strategies are coherent, inclusive, and effectively implemented to safeguard vulnerable populations from the adverse effects of climate change.
Paris Agreement and international context
COP27 facilitated the establishment of new funding arrangements to address Loss and Damage, and COP28 operationalized these arrangements through a Governing Instrument of the Fund (see Decision 2/CP.27), which aims to “assist developing countries that are particularly vulnerable to the adverse effects of climate change in responding to economic and non-economic Loss and Damage associated with the adverse effects of climate change”. Given this, there is a significant opportunity for Parties to include Loss and Damage in their NDC.
At COP28 the designation of the consortium among UNDRR and UNOPS to host the Network Secretariat was agreed upon, moving forward the commitment to enhance the work to protect vulnerable populations and minimize Loss and Damage
Reflecting the Global Stocktake
The GST strongly emphasizes the Loss and Damage agenda, acknowledging the progress made so far and remaining gaps that can be addressed to enable the prevention and minimization of Loss and Damage:
- Paragraph 121: “Recalls Article 8 of the Paris Agreement, in which Parties recognize the importance of averting, minimizing and addressing Loss and Damage associated with the adverse effects of climate change”
- Paragraph 122: “Recognizes the importance of particularly vulnerable developing countries and segments of the population that are already vulnerable owing to geography, socioeconomic status, livelihood, gender, age, minority status, marginalization, displacement, or disability”
- Paragraph 125: “Recognizes efforts to respond to Loss and Damage…including in relation to comprehensive risk management, anticipatory action and planning, recovery, rehabilitation and reconstruction, actions to address the impacts of slow onset events policymaking and planning for displacement and planned relocation, and mechanisms for channelling funding…”
- Paragraph 127: “Recognizes that improved understanding of how to avoid and respond to the risk of low-likelihood or high-impact events…such as abrupt changes and potential tipping points, as well as more knowledge support, policy and action are needed to comprehensively manage risks…”
- Paragraph 128: “Acknowledges the significant gaps, including finance, that remain…”
- Paragraph 131: “Calls on parties and relevant institutions to improve coherence and synergies between efforts pertaining to disaster risk reduction, humanitarian assistance, rehabilitation, recovery and reconstruction, and displacement, planned relocation and migration…”
- Paragraph 132: “Recalls that…each interested party may provide, as appropriate, information related to enhancing understanding, action and support…to avert, minimize and address Loss and Damage…”
- Paragraph 135: “Encourages interested developing country parties to seek technical assistance through the Santiago network for undertaking the actions referred to in paragraph 130…”
The following strategies could help to implement this Opportunity:
It is important that Loss and Damage are integrated into wider climate action and considered in parallel with climate adaptation. Countries might want to consider the following strategies, developed by the WWF, to integrate Loss and Damage into their NDC:
Defining Loss and Damage in the national context:
The nature and scale of Loss and Damage differ between countries, therefore it is important to define Loss and Damage within the NDC against the national context.
Describing current and potential projected Loss and Damage:
Countries may want to assess and communicate the specific Loss and Damage that is occurring currently within their country. Building on this, countries could also communicate potential projected Loss and Damage as they relate to different future scenarios, within sectors and regions. Existing vulnerability and risk assessments could be used as the starting point for assessment of Loss and Damage, or other frameworks (as suggested in ICAT’s Assessing Climate Change Driven Losses and Damages guide.
Highlighting ongoing responses to address Loss and Damage:
Countries could take stock of ongoing activities that aim to avert, minimize, and address Loss and Damage, including policies, implementation, and financial measures as well as systems in place to channel funding (such as social protection systems). They may also wish to collaborate and coordinate with other actors across climate and development agendas to understand the current state of play, avoid parallel systems, and reduce duplication of efforts.
Including targets on Loss and Damage, reflecting the international context:
Countries could consider aligning targets with the seven global targets established in the Sendai Framework, including:
- Reducing mortality:“Substantially reduce global disaster mortality by 2030, aiming to lower the average per 100,000 global mortality rate in the decade 2020–2030 compared to the period 2005– 2015”.
- Reducing people affected by Loss and Damage: “Substantially reduce the number of affected people globally by 2030, aiming to lower the average global figure per 100,000 in the decade 2020–2030 compared to the period 2005–2015”.
- Reducing economic loss: “Reduce direct disaster economic loss in relation to global gross domestic product (GDP) by 2030”.
- Reduce damage to critical infrastructure and basic services: “Substantially reduce disaster damage to critical infrastructure and disruption of basic services, among them health and educational facilities, including through developing their resilience by 2030”
- Increase disaster risk reduction strategies: “Substantially increase the number of countries with national and local disaster risk reduction strategies by 2020”.
- Enhance international cooperation: “Substantially enhance international cooperation to developing countries through adequate and sustainable support to complement their national actions for implementation of the present Framework by 2030”.
- Multi-hazard early warning systems and disaster risk information: “Substantially increase the availability of and access to multi-hazard early warning systems and disaster risk information and assessments to people by 2030”.
Including specific targets, reflecting the national context:
Countries could choose to include specific targets, beyond the Sendai Framework. These may align with the following examples:
- Data and information: improving climate change related Loss and Damage data collection, analysis, monitoring, and observation systems.
- Research: identifying and communicating research needs and gaps on Loss and Damage
- Capacity-building: building knowledge on topics related to Loss and Damage (including disaster risk reduction and climate adaptation), building capacity for use of tools related to Loss and Damage assessment, specifically for identifying economic and non-economic losses (see the UNFCCC technical paper on non-economic losses in the context of the work program on loss and damage).
- Technology: communicating existing technology innovations and gaps, recognizing the importance of technology in reducing, retaining, and transferring climate risk to address Loss and Damage, acknowledging equitable access to technology and knowledge. (see Technologies for Averting, Minimizing, and Addressing Loss and Damage in Coastal Zones for examples).
- Institutional setup: reviewing existing institutions ability to assess and address Loss and Damage, including on (social protection) system capacities to reach individuals vulnerable to or affected by losses and damages, and considering expanding roles or mandates or establish new institutions to deal with Loss and Damage.
- Policy development and integration: building on existing climate change policies, strategies, and actions, or developing new policies, strategies, and actions to avert, minimize, and address Loss and Damage. These could span a range of timeframes, explore sectoral and cross-sectoral planning processes to integrate these into.
- Loss and Damage finance: communicating the scale of finance needs and ways to strengthen financing mechanisms and channel funding to effectively reach those affected in the context of national circumstances. Incorporate pro-poor, people centered, and pre-arranged financial instruments, including social protection systems.
Exploring different approaches, scales, and levels of finance to address Loss and Damage:
Loss and Damage finance encompasses a broad spectrum of financial mechanisms aimed at addressing the impacts of climate change that go beyond adaptation efforts. See UNFCCC’s synopses on Approaches to Address Loss and Damage Associated with the Adverse Effects of Climate Change for an overview of approaches across Africa, Latin America, Asia, and Small Island Developing States.
- Parties may explore international funding sources (see page 47 of “Financing Loss and Damage: Governance and Implementation Options” for comparison of options for international funding mechanisms).
- Parties may look at national and regional funding mechanisms, including those derived from risk retention measures such as savings, contingency financing, reserve funds, and social protection schemes. The information paper “Best Practices, Challenges, and Lessons Learned from Existing Financial Instruments at All Levels that Address the Risk of Loss and Damage Associated with the Adverse Effects of Climate Change” by the Executive Committee of the Warsaw International Mechanism for Loss and Damage under the UNFCCC provides a list of instruments and tools and their strengths, challenges, and examples of use cases.
- It may be useful to explore other funding streams that address Loss and Damage (such as disaster risk reduction funding) that can be operationalized for Loss and Damage.
- Private sector engagement, for instance, through risk transfer measures (e.g., insurance), can help spread and mitigate the financial burden of Loss and Damage.
See “Route: Unlocks Finance” for specific guidance on accessing and operationalizing financial resources.
Country Examples
Timor-Leste. The Updated NDC integrates the concept of Loss and Damage throughout. Timor-Leste defines minimizing Loss and Damage as a national priority, and clearly communicates needs associated with capacity and technology (including improving information, data availability, and analytical capability) to effectively minimize Loss and Damage. They also call for innovative sources of international financing to minimize Loss and Damage. (Source: “Timor-Leste Updated NDC 2022-2030,” UNFCCC).
Dominican Republic clearly demonstrates the case for action on Loss and Damage in their first NDC, highlighting equivalent GDP loss from key extreme events (including Hurricane Georges in 1997, which caused Loss and Damage equivalent to 14 per cent of GDP, and storms Olga and Noel in 2007, that drove 1.2 per cent loss of GDP and 5.3 per cent loss of national budget). Their second NDC emphasized the Loss and Damage agenda further, highlighting their work, in partnership with the World Bank, to estimate damages associated with climate shocks. Drawing a direct line between extreme events and significant economic losses demonstrates the imperative for action on Loss and Damage, and builds the case for international support and action. (Source: “Dominican Republic First NDC,” UNFCCC).
Morocco has transitioned from a post-disaster approach focused on emergency response to one that is based on disaster risk management, disaster risk reduction, disaster preparedness, and financial protection. They achieved this, with support from the World Bank, through redesign of their Fund for Fight Against Natural Disasters (moving from emergency response to a national resilience fund), institutional strengthening by creating the Directorate for Disaster Risk Management, establishing a private-public insurance mechanism that provides insurance to all (including poor and vulnerable populations), developing a flood-risk early warning system, collaborating across over 30 government institutions to draft a directive and practical guide to strengthen the resilience of critical infrastructure and essential services, and developing a Morocco-specific catastrophic risk model which estimates economic impacts of disasters. Morocco has employed several comprehensive and inclusive methods to minimize and address Loss and Damage, utilizing financial, institutional, and technical resources. (Source: “From Disasters to Opportunities: Building a Resilient Future in Morocco,” World Bank).
Further Resources
Online Guide on Loss and Damage (UNFCCC, 2021)
This guide provides an introduction and overview to Loss and Damage concepts, the international context, and timeline of development under COP.
Santiago Network (UNFCCC)
This network aims to catalyze technical assistance of relevant organizations, bodies, networks and experts, for the implementation of relevant approaches for averting, minimize and addressing loss and damage at the local, national and regional level, in developing countries that are particularly vulnerable to the adverse effects of climate change. Updates, announcements, and resources on the progress of the Santiago Network are found on the UNFCCC’s website.
Anchoring Loss & Damage in Enhanced NDCs (WWF, 2020)
This policy brief makes the case for anchoring loss and damage in the NDCs and is intended to help governments do so in the context of their NDC enhancement processes for holistic climate action. The brief outlines four practical elements that can be considered during the process of reporting on current and future loss and damage, and the associated support needs. It demonstrates how Loss and Damage targets can be communicated in NDCs.
Addressing Loss and Damage: What can we learn from countries’ National Adaptation Plans? (NAP Global Network, 2023)
The NAP Global Network discusses the role of NAP processes in minimizing and addressing country-specific Loss and Damage. Recommendations are made based on the review of Loss and Damage components within and across different NAPs.
A Policy Framework for Loss and Damage finance (IIASA, 2021)
This report proposes a comprehensive climate risk finance framework that expands the focus of Loss and Damage beyond insurance-related solutions, incorporating transformational risk management and curative options for residual impacts ‘beyond adaptation.’ It advocates for adapted social protection, and national and global loss distribution schemes to address sudden-onset and slow-onset climate-related risks comprehensively. The framework aims to inform international negotiations on Loss and Damage and adaptation while providing practical guidance for country-level policymaking.
Opportunities and options for integrating climate change adaptation with the Sustainable Development Goals and the Sendai Framework for Disaster Risk Reduction (UNFCCC, 2017)
This technical paper explores opportunities and options for integrating adaptation with the SDGs and Sendai Framework for Disaster Risk Reduction as identified by Parties and non-Party stakeholders through practical experiences.
Financing Loss and Damage: A look at governance and implementation options (Heinrich Böll Stiftung North America, 2017)
This discussion paper tackles key questions relating to the identification, governance, and implementation of finance to address Loss and Damage. It does not provide definitive answers; however, it offers insights into different forms of international finance mechanisms that may be operationalized for action on Loss and Damage.
Assessing Climate Change-Driven Loss and Damage (UNEP/ICAT, 2023)
This guidance document aims to support policymakers in their attempt to better understand the nature and magnitude of past residual climate impacts, as well as present and future residual climate risks, to improve the management of losses and damages in subnational to national contexts. It provides guidance on assessing impacts, retrospectively and prospectively, to support countries’ ability to manage Loss and Damage efficiently and effectively. The document discusses framing issues and provides methodological and sectoral suggestions, where appropriate.
Financial Arrangements for Addressing Loss and Damage: A Disaster Risk Reduction Primer (ODI/UNDRR, 2023)
This primer draws connections between streams of resources related to disaster risk reduction that have direct relevance to addressing Loss and Damage.
Best Practices, Challenges, and Lessons Learned from Existing Financial Instruments at all Levels that Address the Risk of Loss and Damage Associated with the Adverse Effects of Climate Change (Executive Committee of the Warsaw International Mechanism for Loss and Damage, 2016)
This document provides a summary of financial instruments and tools associated with addressing risk of Loss and Damage. Details are summarized, including strengths, advantages, challenges, and examples at the national and regional levels are presented. It also includes lessons learned and good practices from specific country examples.
Technologies for Averting, Minimizing, and Addressing Loss and Damage in Coastal Zones (Executive Committee of the Warsaw International Mechanism for Loss and Damage/UNFCCC/Technology Executive Committee, 2020)
This brief provides a synthesis of knowledge on Loss and Damage experienced in coastal zones and an overview of technologies for averting, minimizing, and addressing Loss and Damage, highlighting tools and methodologies to determine risk, protect coastal zones, build resilience, and foster recovery and rehabilitation.
Compendium on Comprehensive Risk Management Approaches (UNFCCC Executive Committee of the Warsaw International Mechanism for Loss and Damage, 2019)
This document provides an overview of approaches to comprehensive risk management, including risk assessment, risk reduction, financial risk transfer, risk retention, and transformational approaches, as well as an overview of enabling environments for these approaches. While the document covers risk broadly, many approaches relate specifically to addressing, minimizing, averting, and financing Loss and Damage.
Approaches to Address Loss and Damage Associated with the Adverse Effects of Climate Change (UNFCCC, 2012)
This document contains a literature review of a range of approaches to address Loss and Damage, a comparison between approaches for relative cost-effectiveness and resource requirements, and examples of application of approaches across Africa, Latin America, Asia, and Small Island Developing States. The document does not contain an exhaustive list but provides an overview of options and their opportunities and challenges.
Key Messages on Human Rights and Loss and Damage (OHCHR, 2023)
Climate Change is already having negative impacts on a wide range of human rights, including the right to a clean, healthy and sustainable environment, water and sanitation, food, life and culture. These Key Messages describe human rights obligations related to loss and damage from climate change.
How This Links to Other Routes
Communicating Loss and Damage within the NDC can raise its urgency on the international stage. Addressing this opportunity using other opportunities, such as setting targets and improving linkages between NDCs and NAP processes can build the case for international support. Linkages to other Routes include the following. Navigate to these to read more:
Route: Delivers a Just and Equitable Transition
The most vulnerable are more likely to experience climate impacts, including climate-induced loss and damage. Incorporating all of society into action on Loss and Damage ensures this reflects national realities, increases awareness of Loss and Damage, and the needs and opportunities to address this.
Route: Mobilizes All-Of-Government and All-Of-Society
Engaging all of society in the development of Loss and Damage components of the NDC ensures what is communicated reflects national circumstances and realities, and increases awareness of potential Loss and Damage and the needs or opportunities for action.
Route: Technology and Capacity-Building as Needs and Enablers
Scoping the current state of loss and damage and the action required to address this can highlight needs in terms of technology and technical capacity.
Route: Unlocks Finance
Aligning Loss and Damage needs and opportunities with financial pipelines, mechanisms, and priorities can increase financial resources for addressing Loss and Damage. Communicating the scale and nature of finance requirements can increase clarity on needs and opportunities, which contributes to better integration into national budgeting and access to international financial support.
