At COP 22, as part of the development of the Paris Agreement, the Warsaw International Mechanism for Loss and Damage Associated with Climate Change Impacts (Warsaw Mechanism for Loss and Damage) will be discussed. The Warsaw Mechanism for Loss and Damage came into effect …. Loss and Damage is a topic parties find have found it hard to agree on in the past.  This article scrutinizes meaning, goals, development and problems of the Loss and Damage Mechanism to understand its international importance.

What does “Loss and Damage” mean?

When we are discussing the negative impacts caused by climate change ,“Damage” means a reversible impact, “Loss” is a irreversible impact.

Opinions on loss and damage vary, party to party, depending on their circumstance. As an example, developing countries and Small Island Sates are vulnerable to the negative impacts of climate change. They need international support to cope with the loss and damage they may face in the future. Unfort. The frequency as well as the intensity of extreme weather events is gradually  increasing.

Because of the progressed climate change, these consequences cannot be completely prevented. Nevertheless, they can be restricted due to ambitious climate protection.

How has the Warsaw Mechanism for Loss and Damage developed?

The developed countries have successfully avoided to discuss the issue for many years by generally denying any claims of assistance or compensation.

At the beginning of the 1990th the Small Island State Vanuatu introduced the issue on behalf of the Alliance of Small Island States (AOSIS) to the UNFCCC negotiations for the first time, but without using the term “Loss and Damage”. The developing countries called for the establishment of a risk management and an insurance pool to assist them.

Nevertheless, the concept was not internationally recognized until 2007, when the parties included the issue in the “Bali Action Plan” at COP13. This was the first time of officially using the term “Loss and Damage”.

At COP18 in Doha, Qatar in 2012, the parties negotiated a long time to arrive at an approach to support developing countries and Small Island States, which prepared the official establishment of the mechanism.

At COP19 in 2013, one of the most important steps finally succeeded with the official establishment of the Warsaw Mechanism for Loss and Damage (Decision 2/CP.19). The mechanism ensures an engaged provided and sophisticated research. Furthermore, the parties talked about possible practices which lead to an enhanced understanding of the topic.

In December 2014 at COP20 in Lima, Peru the work plan of the Warsaw Mechanism was approved and an Executive Committee was established. It comprises of 10 members from developed and 10 from developing country Parties, representing a diverse range of experience and knowledge.

In September 2015 the Executive Committee held its first meeting in Bonn, Germany. The members discussed a set of guidance for work and about steps to move forward.

At COP21 in December 2015 the developing countries demanded an independent mechanism of Loss and Damage and a liability system inside the Paris Agreement. The developed countries resisted that. The topic was controversially discussed, but nobody wanted the Paris Agreement to fail. The parties compromised a system of review and enhancement in Article 8 of the Paris Agreement. At the same time, the Paris Agreement determines, “that Article 8 of the Agreement does not involve or provide a basis for any liability or compensation.” So a procedural mechanism for financial support does still not exist.

Which Problems do exist?

Because of the significant financial and legal implications, the debate about Loss and Damage is sensible, which often results in an aggravation of conflicts. The main areas of conflict are:

Conflicting interests in general

The major problem of the debate are the conflicting interests of the developing countries on the one hand and the developed countries on the other hand. The developed countries are historically responsible for most greenhouse gas emissions whereas developing countries suffer the most from the negative impacts of climate change. Therefore, the developing countries demand for a liability system or at least for any financial compensation system.

The developed countries reject a liability system, what they clearly expressed at COP21 in Paris. Obviously, they are afraid of entering an incalculable obligation of compensation of international law. Furthermore, the developed countries are in general modest in their ambitions to find a financial support system for developing countries. This leads to incomprehension of the developing states, which feel left alone with the problems, mainly caused by the developed countries.

Domestic acceptance

Another problem is the domestic acceptance of a Loss and Damage system. International agreements must be approved by national decision-making bodies. The Paris Agreement for example needs to be ratified in each country to get legal validity there. The more adverse provisions an agreement contains, the more difficult is a national ratification. Therefore it is necessary to find a common denominator which simplifies the national acceptance.

 Lack of knowledge

Furthermore ignorance and unawareness in general public complicate finding an effective solution for Loss and Damage. People in developed countries only notice, that a lot of money shall be spent, without understanding the responsibility of their home countries. And the normal reaction to public expenditures without seeing the reason is disapproval.

This issue is closely related to the domestic acceptance, because the general public influences the decisions of the national governments.

Concrete form of a financial support system

Another difficult question is how a financial supporting system shall be organised. As the last negotiations showed, the realization of a liability system is unlikely. The developed countries want to prevent the possibility of developing countries to assert damage claims, which would lead to an unpredictable liability.

Nevertheless a financial support system is necessary. A conceivable option could be a support in form of an insurance pool. The developed countries would have to provide the fundings for assisting the developing countries with their Loss and Damages.

It would have to be determined, how much each developed country must contribute. Possible ways would be, that they are required to contribute on the basis of their gross domestic product or on the basis of their historic responsibility for climate change, which can be measured by their previous emissions or their ongoing emitting activities.

Another major issue in this context is the apportionment formula for the developing countries. It is more likely, that the support will be limited, so just locating the damages in each country would not be a workable solution. The financial support could be predicated on a certain magnitude of damages or on the percentage of gross domestic product loss in each country.

A further in-depth analysis about the Loss and Damage provisions of the Paris Agreement and the existing problems is given in this expert interview and this article.

What can be expected for Marrakech?

At COP22 in Marrakech, Morocco, the Warsaw Mechanism for Loss and Damage will be reviewed. The Executive Committee will report about the observed effectiveness and limitations. It has to be discussed, how the mechanism can be enhanced. The Presidency of COP21/CMP21 and the incoming Presidency of COP22/CMP22 already summarised the major information to facilitate the preparations for Marrakech by publishing an aide memoire.

The debate about Loss and Damages will especially focus on financial instruments. In the Paris Agreement, the parties expressly declared, that a liability system should not be the viable solution, so this will not be debatable in Marrakech. However, any alternative financial decision to support developing countries has to be taken. The parties need to discuss a workable compensatory tool. The parties will talk about the limits, gaps, benefits and good practices of existing financial instruments used to address the risks of loss and damage and identify further actions that can be taken to scale up, replicate or innovate these initiatives to provide support funding.

Furthermore it needs to be discussed, how a stock take of Loss and Damage impacts can be provided as the Paris Agreement does not contain such a mechanism.

Another discussed topic will be the support of climate refugees. In some regions people need to migrate because of climate-related land losses. They have to give up their home and restart at another, saver place. These land losses as a consequence of the sea level rise will increase in the next decades. Especially the Small Island States will be affected by these climate events. It is important to assist the climate refugees with coping with their difficult fate by providing funding and allocating displacement facilities.

The developed countries should admit their joint responsibility for the Loss and Damages of the developing countries. This does not mandatory imply a liability system as a legal consequence. It is rather possible to separate the issue of responsibility from the development of a financial support system. This might be the most practicable way for a balance of interests. The particularly vulnerable parties need to be supported by the main perpetrators of climate change. It is desirable, that COP 22 will establish a fair and responsible system of burden sharing.

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