Loss and damage finance: Code Red to G7 and G20 countries (ECO 4, COP26)

4 November 2021

ECO still gets goosebumps listening over and over to Barbados’ Prime Minister Mia Amor Mottley’s powerful intervention on Monday: “Failure to provide the critical finance, and that of loss and damage is measured, my friends, in lives and livelihoods in our communities. This is immoral and it is unjust”.  

She was not the only one to call on G7 and G20 countries to acknowledge and fulfill their responsibilities: heads of states and governments from Honduras, Kenya, and Antigua and Barbuda, among others, echoed her call to action.

ECO hopes this is the very last time that these countries feel the need to deliver such desperate statements. Now is the time for Parties to show that they have heard the message and are ready to act.  

To do so, three things need to happen at COP26:

Firstly, ECO urges the establishment of a permanent agenda item on loss and damage for UNFCCC   Subsidiary Bodies. Indeed, despite being the third pillar of climate action recognised in the Paris Agreement (alongside adaptation and mitigation), loss and damage (L&D) is discussed under the UNFCCC negotiations only once a year, at the technical level, through the review of the WIM Executive Committee report to the COP.   This is not enough. Having an agenda item on L&D would not only ensure that the topic is considered at each session but that it also gets the attention it deserves and is addressed under other tracks such as finance, capacity building, and technology transfer.

Secondly, for the Santiago Network on Loss and Damage (SNLD) to deliver on its mandate (right, COP President Alok?), ECO calls on Parties to make significant progress on its operationalisation. Indeed if appropriately designed, the SNLD, established at COP25, has huge potential to catalyse concrete action and support to the countries and communities most at risk of loss and damage. However, for now, the SNLD is…a website.

ECO wants a decision at COP26 that turns the SNLD into the technical component of the WIM. This means it needs a dedicated secretariat, and that a process is set up to fully operationalise it at COP27, with sufficient funding. Ongoing discussions under the   SBI are going in the right direction – let’s keep pushing to get to something that really helps vulnerable communities, and ensure that the SNLD is neither just a database nor a pure matchmaking entity.

Last, but certainly not least, ECO urges Parties to commit to providing new, additional and needs-based loss and damage finance and a system to deliver that finance to vulnerable developing countries.      

Does that sound too complex? Parties should not feel like they have to reinvent the wheel as over recent years countries, country groups, civil society and academia have already put many proposals on the table. It’s just that Parties never really took the time to actually assess them.  

Options to secure new and additional finance include a tax on fossil fuel extraction (a “Climate Damages Tax”) or a tax on emissions from maritime and aeronautical sectors.  Options to channel the secured amount could range from a loss and damage fund or facility, to a Solidarity Fund and an L&D finance window under the Green Climate Fund. So the right move would be for the COP to task the WIM ExCom and its Expert Group on “Action and Support”, in collaboration with the Standing Committee on Finance, with the design of the L&D finance system to be approved at COP27.

Parties, it’s time to go from Code Red to Code Green on loss and damage finance!

**** SPANISH ****

Un movimiento prometedor en materia de derechos humanos: es hora de que todo el mundo se suba al carro

A ECO le encanta que le sorprendan gratamente. Así que ayer fue un éxito. Al iniciarse los debates sobre el artículo 6.2, nos sorprendió gratamente escuchar un aparente apoyo a la inclusión del lenguaje de los derechos humanos en el texto. Fue estupendo escuchar a tantas Partes, entre ellas AILAC, EIG, los PMA, los PMD, la UE, Australia, Nueva Zelanda, Canadá, México, Antigua y Barbuda, Ecuador… todas expresaron su apoyo (y si nos olvidamos de alguien, pedimos disculpas, y esperamos que todos se unan). 

Pero el diablo está en los detalles y esos detalles son importantes. ECO está dispuesto a proporcionar cualquier ayuda que podamos dar a las Partes para garantizar la protección de los derechos humanos y los derechos de los Pueblos Indígenas. 

Tenemos algunas sugerencias inmediatas sobre cómo reforzar el lenguaje de las salvaguardias de los derechos humanos en el contexto del artículo 6.4. Se puede hacer esto incluyendo en el diseño de la actividad y asegurando que la consulta con los titulares locales esté en línea con derechos como el derecho de los Pueblos Indígenas al consentimiento libre, previo e informado. Estos elementos son fundamentales para ayudar a prevenir posibles daños. Ah, y hacer que el mecanismo de reclamación -al que las comunidades pueden acceder para buscar remedio si se ven perjudicadas- sea independiente. Este es un punto importante de los derechos humanos que no se puede olvidar. 

ECO también apoya los llamamientos para que los derechos humanos y los derechos de los pueblos indígenas sean protegidos e incluidos en las tres partes del artículo 6 (6.2, 6.4 y 6.8). Los derechos deben ser protegidos en toda acción climática, ya sea bajo un enfoque de mercado o de no mercado. 

ECO se siente alentado por esta convergencia y cree que podemos trabajar juntos para cumplir y garantizar los derechos en el artículo 6, ¡porque es la única opción!