The climate change political agenda has been focused mainly on mitigation and adaptation, without addressing the extent to which impacts are felt by developing countries that have contributed little to the root cause. Kala Vairavamoorthy reflects on the complex area of loss and damage and the implications for water.
There is an inherent injustice around climate change – an injustice at the heart of the slow rate at which politicians and their negotiating teams have been able to secure progress in the Conference of the Parties (COP) process of the UN Framework Convention on Climate Change (UNFCCC). This injustice is illustrated vividly by the prospects for Small Island Developing States. They have made minimal contributions to greenhouse gas emissions and, in turn, to a rising sea level or to extremes of weather. Yet, in some cases, their very existence is threatened.
This need to bring the extent to which countries are impacted into climate discussions is captured by the term ‘loss and damage’. Negotiations at the many COP meetings have mainly focused on mitigation efforts to reduce greenhouse gas emissions. It was only at COP 26 in Glasgow that adaptation – and, with it, water – really featured. Loss and damage was first mentioned in the COP process in Bali in 2007 (COP 13). The big change here is that the main success of the COP 27 meeting in Egypt in November was an agreement to establish an international fund to provide a response to loss and damage.
The water sector has long been used to talking about adaptation, preparing measures to better respond to the many climate change impacts that are felt through water. We have been talking increasingly too about mitigation, given the need for carbon emission reductions wherever possible, alongside the growing realisation of the opportunities for mitigation in our sector. The latest progress on loss and damage firmly positions it as the third pillar in the climate change policy agenda, alongside mitigation and adaptation. This brings with it the need for the water sector to understand the complexities and sensitivities around loss and damage if we are to find the correct fit for action on water within these three pillars.
Understanding loss and damage
Multiple complexities and sensitivities come into play in discussions on loss and damage. One is around who is responsible.
Climate change impacts result from cumulative contributions to global emissions, but how does that convert to responsibility? There are a number of principles that can serve as a starting point here, such as the ‘no-harm principle’ seen in the 1992 Rio Declaration, under which states should not harm the environment of other states. Others include the ‘polluter pays principle’, where those who polluted must pay, and the ‘beneficiary pays principle’, where those who have benefited most from carbon intensive industries must pay.
This aspect of the debate might shape, for example, the balance of contributions made to a global compensation fund. But even if that were resolved – which it needs to be for the new fund – how to progress from there?
In particular, what is the link between climate change and any harm suffered during, say, a severe flood? Is there a causal link, meaning there has been loss or damage that can be attributed to climate change? This makes it necessary to distinguish between, for example, flood damage that might have occurred had there not been climate change linked to fossil fuel use and flood damage made worse by such anthropogenic climate change.
This attribution needs to be made at the local level, tied to the specific loss or damage. We are accumulating more evidence to allow this local attribution, but in general our primary tools here – models – have lacked the certainty or coverage to satisfy this need. This is the case for extreme events such as floods and droughts where loss and damage is very visible, but it is also the case for less direct impacts, such as changes in the burden of water-related disease. Attribution also needs to account for local factors that shape the scale of loss and damage incurred. For example, to what extent have local land use changes or creation of large areas of impervious surfaces intensified flooding?
Despite the complexities around attribution, compelling figures have been issued in calls for action on loss and damage in an attempt to secure progress.
For example, the Vulnerable Twenty (V20) group was formed in 2015 as a voice for countries systemically vulnerable to climate change. This group has said that around US$525 billion has been lost by its 58 member countries over the past 20 years – equivalent to about a fifth of their wealth – as a result of climate change.
Such figures expand the geography of loss and damage way beyond the original injustice raised around Small Island Developing States. They also highlight the extent to which loss and damage is an issue with matters of justice and equity at its heart.
The complexities around compensation don’t end there. Should any compensation be adjusted depending on the extent to which a country can fund its own recovery? For example, following extensive flooding in 2021, the German government was quickly able to mobilise €30 billion to pay for reconstruction. Meanwhile, floods in 2022 in Pakistan affected more than 33 million people, with infrastructure damaged including more than two million houses. The country faced flood rehabilitation and reconstruction requirements of more than US$16 billion, with a funding gap of around half of this. These examples are not all climate-related, but they highlight the differences in prospects for a home-grown recovery from climate impacts.
Needless to say, it is typically the poorest who suffer most – at the country level, but especially within countries, all compounded by other inequalities. But even this relative clarity is blurred when mitigation is brought into the discussion. Should countries receive compensation for loss and damage if, for example, they continue to invest in fossil fuels, especially large emerging economies? Or can developing countries counter this, given that developed countries have gained so much from exploiting fossil fuels, sometimes over centuries.
Fault lines in the financing debate
On top of all this, any funding mechanism on loss and damage needs to integrate with the already complex world of climate finance, especially in connection with adaptation. At a basic level, adaptation is focused on steps to ensure better preparedness for future, more extreme conditions. Loss and damage is more about what happens after an incident in which climate change causes harm. But the distinction may not be clear. Adaptation measures may have been accelerated in response to worsening extremes occurring because of climate change. Distinguishing between the two is not just a technical matter: developed countries in particular have been happy to focus on adaptation, as this steers clear of the issue of responsibility.
One challenge is that the joint term loss and damage combines loss, which can be thought of as harm to society that is irreparable, such as loss of life or culture, and damage, which can be thought of as harm that is reparable, such as financial losses or damage to infrastructure that is not insured. Indeed, there has been a shifting, expanding view of loss and damage. This has gone beyond the initial ‘slow onset’ issue of sea level rise, to bring in other slow onset issues and faster-moving extreme events. Loss and damage has also expanded to take in non-economic losses relating to issues such as loss of biodiversity and cultural heritage, and the movement of people as a result of climate change.
At the same time, countries have been, and are increasingly, planning to implement adaptation measures, whether in anticipation of climate change impacts or by including climate-resilient approaches in efforts to ‘build back better’. Numerous financing mechanisms have sprung up to support this drive towards adaptation. But there are limits to what protection adaptation measures can deliver. Indeed, we know they will fail at some point; there will be a flood or a drought that goes beyond this adaptive protection. So there is a whole debate around whether loss and damage can be separated conceptually as something that happens beyond the limits of adaptation, or whether the two are inherently linked.
The promise of progress
COP 27 nonetheless managed to secure commitment to establish a fund for loss and damage.
This was a major milestone, but much still needs to be done to operationalise the idea. The expectation is to finalise arrangements during COP 28 in UAE in late 2023. The intention is to direct assistance at developing countries that are “particularly vulnerable to the adverse effects of climate change”.
While there is much to debate about loss and damage during this operationalisation, there is relative clarity on, for example, the way that financing around loss and damage needs to differ from adaptation when it comes to post-disaster recovery.
Adaptation finance does not cover the immediate impacts of climate-related disasters or of social impacts, such as migration because of sea-level rise. Estimates of the cost to developing countries of impacts that they will not be able to avoid through adaptation have been put at US$290 billion to US$580 billion in 2030 and in excess of US$1 trillion by 2050 – figures that humanitarian aid will not be able to cover. This all means that the fund will need to target recovery and reconstruction, for example, and be on hand to deliver immediate assistance.
The way ahead for water
This all raises questions for our world of water. The operationalised new fund will need to be applied to specific incidents in specific countries. More broadly, the arrival of the fund will more clearly bring loss and damage to the fore as the third pillar of climate change policy.
A water utility in the grip of a severe drought will always have to do its best to maintain supplies to its customers, but the shift on loss and damage may bring with it a change in terms of where financial support for the response may come from. To what extent can that drought be attributed to climate change and, depending on the answer, can a case be made for international support or compensation for the response? But at the same time, has the utility been responsible in maintaining its assets, and dealt with water losses adequately? Our sector has a history of poor infrastructure maintenance – something we must continue to work to remedy. We know that a well-run utility will be better placed to deal with greater extremes of drought.
This marks out a need for progress on the attribution science around climate change, including tools that can be used and the local application of tools to offer location-specific perspectives on the actual impacts of climate change.
Similar questions can be posed when it comes to flooding. If a city’s sewer and stormwater infrastructure is overrun or destroyed during flooding, the utility will always have to do its best to protect the lives and properties of its customers, and to restore services as rapidly as possible. But to what extent can the flooding be attributed to climate change versus badly planned, impervious urban development – and has the infrastructure been sufficiently well maintained to ensure good functioning during extreme events?
It may also be that we, in the water world, can provide leadership in a different direction. Rather than be drawn into a politically led distinction between loss and damage financing on the one hand and adaptation financing on the other, we should emphasise the opportunity for a systems-led recovery, where we build back better in a way that makes us more resilient. Rather than replacing like for like, we push for a transition to a new normal.
The stronger disaster-response focus of loss and damage drives attention here towards rapid action. This potentially connects well with decentralised technology solutions, both for sanitation and supply, including rainwater harvesting. It also connects with the need for greater policy focus on inclusive sanitation, given that poor and marginalised communities are the ones likely to be impacted most by disasters. In all cases, the key is to build the case for these options in anticipation of the need for rapid deployment, and to do so in a way that ensures what gets installed can contribute to a longer-term solution.
This points to the practical need around loss and damage as far as water is concerned. The use of funding will probably be subject to conditions or shaped by technical assistance. In both cases, this presents a window of influence through which to shape solutions – and, in the case of technical assistance, that can mean ensuring that the expertise and competence drawn on has a local base.
There is an opportunity across all of this for IWA’s network to shape the future. Indeed, while the regular workings of the life of a utility are typically shaped by scheduled investment cycles, disaster responses could serve as inflection points, sparking a change of course.
There is further cause for optimism from a water perspective, given that COP 27 built on the relative prominence of water in Glasgow and explicitly called for action on water in its final declaration. No doubt reflecting the scale of the water crisis that is highlighted in the latest IPCC reports, the declaration emphasises the importance of water and water-related ecosystems, and urges countries to further integrate water into their adaptation efforts.
This supports the case for wider use of nature-based solutions, for example. Use of approaches such as sustainable urban drainage systems align with action across the three pillars, with their multiple functions providing options to contribute as adaptation measures, provide low emissions treatment, and soften the harmful blows of loss and damage. While nature-based solutions, like hard infrastructure approaches, can be overwhelmed, their use fits well with the need for antifragility – building systems that come back stronger after being subjected to the stresses of extremes.
We know how closely water and climate are linked. The strengthening of the third policy pillar of loss and damage offers promise that action on water and climate can reflect this closeness and be better aligned. •
Kala Vairavamoorthy is CEO of the International Water Association
