[COP 25 Side Event] Advancing Loss and Damage governance and finance mechanisms

ACT Alliance and member Bread for the World hosted a joined side event at COP25 with the Institute for Sustainable Development and International Relations, and the German Development Institute.

The side event titled Breaking new ground: Advancing Loss and Damage governance and finance mechanisms brought together negotiators, civil society, academia and others to explore pathways to advance Loss and Damage governance and finance mechanisms.

The event was moderated by Isaiah Toroitich ACT’s Head of Advocacy and Development Policy who connected the realities of loss and damage as witnessed by ACT members around the world to the ongoing negotiations in Madrid. Toroitich noted the need to strengthen the conceptual understanding of loss and damage in the climate talks and to mobilise finance accordingly.

Lola Vallejo, Climate Programme Director of the Institute for Sustainable Development and International Relations explored potential ways forward for the Warsaw International Mechanism on Loss and Damage. Vallejo noted that while there has been progress on understanding the concept of loss and damage and its connections to emissions and human displacement, there is a lack of understanding on whether comprehensive risk management approaches should plan for a two or four-degree world.

While there has been much discussion at COP25 on the need to mobilise support for loss and damage, there is no agreement on the mechanism under which this finance should be mobilised, these varying views were further explored by the panelists.

Richard J.T. Klein, Director of Science and Innovation at the Global Center of Adaptation and Senior Research Fellow at the Stockholm Environment Institute delivered the keynote address. Klein affirmed the need for financial support for developing countries that are particularly vulnerable to climate impacts in order to address loss and damage, and emphasised that he does not believe that a separate financial mechanism on loss and damage is necessary. “What I think is a more fruitful and more pragmatic way to increase funding available for loss and damage is to keep pushing the need to upscale adaptation finance in the broadest sense,” he said.

Sabine Minninger, Climate Change Policy Advisor from Bread for the World shared a different view, “we need a standalone fund for loss and damage because it is not adaptation, and it cannot be funded by the already limited funds that are available for adaptation.” Minninger expressed that finance for loss and damage should be additional to what is already available for adaptation, mitigation and humanitarian response.

“Adaptation is four times cheaper than loss and damage. Developing countries will face costs of up to USD 400 billion annually by 2030 which is anticipated to increase to USD 1.6 trillion annually by 2050 if we continue on a 3-degree pathway of global warming,” said Minninger.

Heike Henn, Federal Ministry for Economic Cooperation and Development (Germany) agreed with Minninger and Klein on the need for climate finance and added that the impacts of climate change also lead to trauma and economic losses and insecurities.

Henn expressed that while finance is important, it is not all that will be needed to address loss and damage. “Finance must come together with capacity building, ownership, political will, strategies, and more to make an impact on the ground.”

While finance for loss and damage is a key area of concern for ACT Alliance and partners around the world, it is also important to strengthen governance on loss and damage in order to tap into the resources of various actors at all levels.

Idil Boran, Associate Professor at York University and Associate Researcher at the German Development Institute identified four elements that would be necessary for effective Loss and Damage governance, noting that it should be:

  1. Inclusive and responsive and should recognise loss and damage initiatives taking place at the local level.
  2. Catalytic to create an enabling environment for community-based actions to inspire other actors and actions.
  3. Collaborative and participatory to encourage interlinkages with various frameworks including the Sendai Framework for Disaster Risk Reduction and other Rio Conventions.
  4. Transparent so that there is clear data in order to identify gaps that should be responded to.

ACT Alliance will continue to advocate for new and additional finance for loss and damage and for an effective governance system. ACT will also continue to work with its members around the world to respond to the urgent needs of climate-vulnerable communities that are already experiencing losses and damages.