What is Loss & Damage?
Loss and damage refers to the negative effects of climate change that occur despite mitigation and adaptation efforts. While mitigation addresses the causes of climate change (like reducing greenhouse gas emissions) and adaptation addresses its impacts (like building sea walls to prevent flooding), loss and damage is concerned with the unavoidable and irreversible impacts of the climate crisis.
Climate change impacts and risks are becoming more complex and difficult to manage. Scientific evidence suggests that loss and damage is unequally distributed and not comprehensively addressed by current adaptation and mitigation, particularly in vulnerable developing countries. Multiple climate hazards will occur simultaneously and interact, resulting in compounding risks across sectors and regions.
Hard limits to adaptation have already been reached in some ecosystems. One clear example of this is seen in various low-lying islands that may become uninhabitable due to sea-level rise. Vulnerable islands have experienced losses in biodiversity, ecosystems, property, cultural heritage, and livelihoods. In some cases, there will be limits to what communities can do to adapt, with many subject to displacement, migration, and relocation.
A 2023 analysis found that, between 2000 and 2019, the world suffered at least $2.8 trillion in loss and damage from climate change – costing around $16 million per hour.
The concept often falls into two categories:
- Economic loss and damage refers to negative impacts where the costs are quantifiable, such as damage to infrastructure or reduced crop yields.
- Non-economic loss and damage refers to negative impacts that are not easily traded in markets, and typically harder to measure in monetary terms, such as loss of culture, ecosystem services, and displacement. These tends to be more irreparable and irreversible.
Loss and damage is closely related to the concept of 'just transition' and equity because the world’s most climate-vulnerable countries are often the lowest emitters of greenhouse gases. This raises the question of who exactly should pay for loss and damage in poorer countries where resources are limited.
The term ‘loss and damage’ was formally recognised in 2013 at the 19th Conference of the Parties (Cop19) in Warsaw, where the Warsaw International Mechanism for Loss and Damage was established. Since then, interest has grown and an increasing number of countries are discussing loss and damage in their Nationally Determined Contributions.
Loss & Damage Funding Arrangements
At Cop28 in 2023 countries agreed to operationlize the Loss and Damage Fund, which will provide financial assistance to climate-vulnerable countries. The World Bank was invited to host the Fund secretariat and to operationalize the Fund as a financial intermediary fund (FIF) for an interim period of 4 years.
Whilst progress in recognising and addressing loss and damage is increasingly urgent, it is widely acknowledged that such efforts should not detract from tackling the root causes of climate change and building global resilience to its impacts. The best method for reducing loss and damage is still – and will always be – climate adaptation and mitigation.
What is UNEP doing on Loss & Damage?
“The absolute necessity of a Loss and Damage Fund has come to the fore.” – Inger Andersen, Executive Director of UNEP.
Driving Action through Science and Research
UNEP is at the forefront of producing up-to-date, accurate science on the impacts of climate change. The Adaptation Gap Reports quantify the level of adaptation finance needed to avert loss and damage, while the Emissions Gap Reports examine the extent to which greenhouse gas emissions will need to fall to limit global warming to 1.5 degrees above pre-industrial levels.
Through its compilation of climate vulnerability assessments, developed from its portfolio of climate adaptation projects around the world, UNEP produces the scientific basis that informs the understanding of extreme weather events impact, and how solutions can be designed to avert and minimise loss and damage. UNEP’s research also covers key emerging loss and damage issues, such as how governments will respond to and integrate refugees displaced by climate impacts.
Technical Assistance and Strategic Advocacy
UNEP extends its expertise to the Transitional Committee on Loss and Damage and the Glasgow Dialogue, providing technical assistance to help members states make progress on addressing loss and damage, to support the creation of new loss and damage funding arrangements, and to identify possible financing solutions like carbon pricing, taxes levies, and ‘cap-and-trade’ systems. Through programme development, written submissions, technical presentations, and the sharing of best practices, UNEP’s contributions have a particular emphasis on ecosystem restoration, recovery and implementation of nature-based solutions.
Furthermore, UNEP crafts its advocacy to drive reforms within the world’s financial institutions and banks to be better able to provide finance, and calls for simplicity and expediency for the institutional arrangements of the structure of the Loss and Damage Fund, arguing that countries will need to have access to the fund with a degree of predictability. This closely ties in with the kind of financial reforms needed to deliver on the 1.5 degree goal, doubling investment by 2025 and eliminating nature-negative finance flows (see UNEP State of Finance for Nature).
Climate Adaptation & Mitigation
UNEP underscores the importance of averting and minimising loss and damage through scaled-up, expedient and accelerated climate adaptation and mitigation strategies. Prioritising ecosystem-based approaches, the implementation of National Adaptation Plans, and expanding Early Warning Systems and Climate Services, UNEP has grown a climate adaptation portfolio of over 75 projects in over 50 countries, while aiding countries in accessing much needed adaptation finance.
Limiting global warming to 2°C and 1.5°C requires Nationally Determined Contributions (NDCs) to reduce global emissions by 30 and 45 per cent, respectively, by 2030. UNEP has supported partner countries to translate these NDCs into concrete sector strategies and actions ready for financing and implementation, and to increase the their ambition. On climate mitigation, UNEP takes a multifaceted approach to help countries move towards low-emissions strategies, particularly through the Six Sector Solutions – a roadmap for reducing greenhouse gas emissions to limit global warming to 1.5 degree above pre-industrial temperatures by 2030.
