When your negotiator says ˜Why do we need Loss & Damage Finance’? Who you gonna call? ˜ECO!’
6 December 2019
When your negotiator says “Why do we need Loss & Damage Finance”? Who you gonna call? “ECO!”
ECO welcomes the new direction from Parties to hone in on the nuts and bolts of the discussion on finance to address Loss & Damage (L&D). What’s clear is that vulnerable, developing countries need assistance to address L&D, so developed countries must urgently ramp-up action and support. Discussions about some of the central issues like improving the effectiveness of existing institutions or assisting vulnerable countries in better planning are all key, but will be largely insufficient without raising new and additional finance to confront the climate crisis. What ECO observed during yesterday’s discussions made it clear that not all countries are on the same page when it comes to L&D finance. Never fear, ECO is here to answer some burning questions to help negotiators find the light at the end of the COP25 ambition tunnel:
First things first. Why do we need additional financing?
At only 1°C of global warming, climate change fuelled events such as extreme heat waves, rampant forest fires, devastating droughts, ecosystems losses, catastrophic floods, and increasingly destructive hurricanes, typhoons and cyclones, are stealing people’s lives and livelihoods. All are examples of climate driven loss and damage impacts that go beyond what people and ecosystems can adapt to. Currently available funding through existing mechanisms, such as humanitarian aid and disaster response finance, the Green Climate Fund, or Multilateral Development Banks, are either grossly inadequate, or come with problematic conditions such as a requirement for loan repayment. Parties must agree to establish new and innovative sources of public finance that can generate at least US$50 billion by 2022.
Developed country rebuttal: Should the UNFCCC now become a humanitarian agency?
ECO says: Not at all. What the UNFCCC is, is the institution responsible for tackling the global climate challenge. And as a result of its inability to ensure the implementation of adequate efforts to mitigate and adapt to climate change, a significant proportion of the global population is now suffering irreversible climate impacts. The UNFCCC can help by promoting funding mechanisms to fill existing gaps in humanitarian aid, ODA and other existing finance mechanisms, with respective funds being channelled through existing, effective institutions.
Developed country rebuttal: How would loss & damage be defined under a finance facility?
ECO says: Losses and damages are adverse impacts of human-induced climate change that cannot be avoided now or in the future by using mitigation or adaptation measures. L&D measures focus on addressing the socio-economic or human effects of actual irreversible impacts, both before and after a disaster (ex-ante and ex-post) for both sudden and slow onset events. L&D measures are not expected to prevent climate impacts, but mitigation and adaptation can be used to avert L&D. For non-L&D policy wonks, more information on L&D can be found in Article 8 of the Paris Agreement and COP19 Decision 3CP.18.
Developed country rebuttal: We have enough institutions, why do we need a new L&D financing facility?
ECO says: Addressing L&D requires a variety of actions, depending on the specific needs in a developing country. New and additional finance needs to be raised in significant amounts for a L&D facility to specifically fund these actions. This facility should channel resources to address diverse needs via existing channels (if useful and effective) and new institutions (to fill identified institutional gaps). ECO thinks it prudent to remind delegates that discussions on the role of different institutions to raise new finance has yet to happen under the WIM. This discussion is long overdue.
ECO hopes this Q&A has been useful and invites Parties to reach out with any questions they may have.