What is loss and damage – and why is it so vital for climate justice?

Lyndsay Walsh Climate Change, Events, Influencing

Ignored for decades by rich countries, ‘loss and damage’ is going to be high on the agenda at COP27 in Egypt. Oxfam’s Lyndsay Walsh explains what it is – and why we’ll be fighting for rich countries to pledge real money to address it

Last week, COP26 President Alok Sharma gave a speech outlining his climate priorities for the year ahead. (Well, at least until November, when Egypt takes over from the UK in leading on COP.)  As Sharma was talking about Glasgow’s legacy and what needs to be done on climate, one term kept cropping up: “loss and damage”. Wilfully ignored by rich countries for decades, loss and damage is now firmly on the global climate agenda, whether historical emitters like it or not. But what exactly is loss and damage and why is it so important for climate justice? Here, I’ll try to explain.

What is Loss and Damage?

“Loss and damage” (L&D) is the term used for climate impacts which cannot be or have not been mitigated or adapted to. The “loss” refers to things that are irreversibly lost such as lives, a way of living or historical site, while the “damage” refers to things that can be repaired or recovered such as roads, buildings or crop yields.  For example, when deadly Cyclone Idai hit Mozambique in 2019, over a thousand lives were lost and numerous buildings were damaged, leaving hundreds of thousands without shelter. Climate change can intensify such extreme weather events, leading to more destructive rainfall and resulting flood damage. Three years on, Mozambique is still trying to rebuild.

Oxfam campaigners pose as world leaders playing in a traditional Scottish pipe band at the COP26 summit in Glasgow in November 2021, demanding action by governments for real climate justice, not just ‘hot air’. (Photo: Andy Aitchison / Oxfam)

Loss and damage not only refers to the impacts from extreme weather events such as cyclones, but also slow-onset events such as sea-level rise and desertification. Such loss and damage is happening already and comes at an enormous cost, both human and financial.

Some forms of L&D cannot be quantified in monetary terms: non-economic losses include, for example, biodiversity, cultural monuments and traditions, as well as loss of life and health. Think of losing a precious family heirloom in a flood, the value attached to such an item is unquantifiable and money alone could not make up for its loss.

‘Ultimately, someone ends up paying for the loss and damage already being experienced and this cost often falls upon households’

It is important that we draw a distinction between L&D and adaptation, though the boundary between them can be blurry in practice. L&D is when climate impacts, due to failed ambition in mitigation and adaptation, go beyond adaptation and make it impossible for the affected community to continue their traditional way of living. One example is if (a) mitigation fails to stop sea level rise and (b) adaptation to this, in the form of salt-resistant crops, becomes untenable because the saltwater encroaches so far inland. This will lead to (c) loss in the form of farmers having to abandon their traditional sources of livelihood.  However, finance for both adaptation and L&D is urgently needed and it is important to emphasise that one should not take away from the other but rather, that investment in adaptation can minimise L&D.

Why does Oxfam work on it?

Loss and damage is making people poorer – a key concern for an organisation focused on ending global poverty. We have heard it many times before but it always bears repeating: those who have done the least to cause the climate crisis are going to be, and already are, the worst impacted. Ultimately, someone ends up paying for the loss and damage already being experienced and this cost often falls upon households.

Ensuring that ongoing loss and damage does not further impede poverty eradication will require a huge injection of finance. That is why we are pushing hard for an L&D finance facility to be established at COP27. It is doubly important to do so in light of mitigation efforts being far below what is required to keep the world on track for 1.5C (climate action tracker’s latest estimates show we are headed for 2.4C), and adaptation finance being woefully under resourced.

A  brief history of loss and damage

L&D is often regarded as the ‘taboo topic’ of climate negotiations. As far back as 1991, when the United Nations Framework Convention on Climate Change was still being drafted, small island states highlighted the need to address climate-related loss and damage for the most vulnerable countries, and to provide finance for this. Yet there has been almost no movement on loss and damage finance in the past 30 years, as it was labelled ‘politically toxic’. This largely comes down to wealthy country concerns that making progress on L&D finance will hold them liable for ever-increasing pay-outs. 

Under the Paris Agreement there is a dedicated article (Article 8) on Loss and Damage, however this was only included on the basis of an accompanying paragraph which says that Article 8 “does not involve or provide a basis for any liability or compensation”. Wealthy countries have since used this to obstruct any finance for L&D being mobilised under the UNFCCC.

This needs to change, and going into COP26, one of Oxfam’s key priorities was to make substantial progress on establishing an L&D finance facility under the UNFCCC.

What happened at COP26?

The biggest negotiating group ‘The G77 plus China’ proposed that an L&D finance facility be agreed at COP26. This group represents six out of every seven people on Earth – yet this proposal was blocked outright by wealthy countries. Instead, the Glasgow Climate Pact (the big political outcome from COP26) decided on a set of dialogues to be held over the next two years to discuss finance to address loss and damage. This was incredibly disappointing, with many seeing it as a delay tactic.

However, outside the venue, there was a lot of movement with Scotland being the first wealthy nation to commit funding for L&D, as its First Minister, Nicola Sturgeon, emphasized how finance for L&D is “not an act of charity but an act of reparation.” Wallonia in Belgium also committed to give 1 million Euro to L&D and philanthropic organisations also offered to kickstart funding for it.

Dialogues need to deliver real money

President Sharma spoke about “ambitious text on loss and damage” in the Glasgow climate pact in his speech last week. The L&D finance dialogues set out in the Glasgow climate pact must work toward concrete outcomes sooner rather than later for this to be true.

That is why it is so crucial that we keep building momentum on L&D finance right up to COP27 to make sure wealthy countries can no longer ignore this issue. There are hopeful signs, not least that more and more people and the media are finally talking about L&D finance. As Oxfam’s climate policy lead Nafkote Dabi said: “Loss and damage, [is] no longer obscure rhetoric”.

Let’s continue the fight for climate justice by making sure that the people and communities impacted by the climate crisis are supported, and not left to pick up the pieces by themselves. That means real money from rich countries to address loss and damage. For our part, Oxfam will keep up the pressure all the way to COP27 and beyond.  


Lyndsay Walsh

Lyndsay Walsh is a climate policy adviser at Oxfam GB

Want to find out more? Oxfam Aotearoa, Oxfam in the Pacific and Oxfam Australia recently put together a briefing paper on L&D finance. Also Oxfam GB chief executive Dhananjayan Sriskandarajah sets out the three things we need for climate justice here. And Oxfam GB kicked off its post-Glasgow climate campaigning by calling on the UK Government to get to work in the first 100 days after COP26.