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  • The question of who should pay damages for climate change-induced losses is finally on the table at the COP27 climate summit in Sharm el-Sheikh, Egypt.

  • While mitigation and adaptation goals aim to curb carbon emissions and prepare for future impacts, loss and damage is concerned with harm already wrought by climatic disruptions or locked in by current emission levels — and with who should foot the bill.

  • Emerging research on climate-related damages shows that the U.S. could face the biggest claims for reparations, even though drawing direct causal links between carbon emissions arising in one country and damaging climatic events in another country is complicated.

  • “Is there a scientific basis for loss and damage and climate liability? The answer is yes,” says Justin Mankin, a climate scientist at Dartmouth College in the U.S. and co-author of a recent study on calculating climate damages.

More than three decades after the Pacific island nation of Vanuatu raised the issue at international climate talks, the question of who should pay damages for climate change-induced losses is finally on the table at the COP27 summit in Sharm el-Sheikh, Egypt.

“Weather and climate extremes are on the rise and pushing people and ecosystems beyond the limits of what they can adapt to,” said Rueanna Haynes, a former diplomat from Trinidad and Tobago. “Losses and damages are inevitable.”

Vulnerable countries least responsible for carbon emissions have long demanded that rich nations, who prospered on the back of unchecked burning of fossil fuels, should compensate them for climate impacts. But now, with estimated global losses spiraling beyond $100 billion annually, and expected to soar far higher, less-industrialized countries are looking for relief to save them from bankruptcy and indebtedness to more industrialized ones.

While mitigation and adaptation goals aim to curb carbon emissions and prepare for future impacts, loss and damage is concerned with harm already wrought by climatic disruptions or locked in by current emission levels — and with who should foot the bill.

Losses and damages from climate change will increase rapidly with further warming, in many cases producing risks that people and nature will not be able to adapt to. Photo by John Englart via Flickr (CC BY-SA 2.0).

Losses and damages from climate change will increase rapidly with further warming, in many cases producing risks that people and nature will not be able to adapt to. Photo by John Englart via Flickr (CC BY-SA 2.0).

“The rich countries have pushed against this idea for years because they know they will be on the line” to pay out astronomical sums, said Jason Hickel, a scholar of the ecological economy at the Autonomous University of Barcelona.

Emerging research on climate-related damages shows the U.S. could face the biggest claims for reparations, even though drawing direct causal links between carbon emissions arising in one country and damaging climatic events in another country is complicated. But scientists are now venturing into that politically fraught territory of tracking how individual carbon polluters have shaped the fortunes of other countries over past decades — and continue to do so in the present.

Vanuatu first drew attention to the question of loss and damage in 1991 during negotiations to set up the United Nations Framework Convention on Climate Change (UNFCCC). In many ways, the climate crisis, and the attendant economic injustice, first dawned on low-lying island nations like Vanuatu, threatened by rapidly rising seas.

Today, Pakistan is leading the G-77 and China bloc of more vulnerable nations in calling for loss and damage funding. The country suffered catastrophic flooding this year that left at least 1,500 people dead and displaced 33 million — approximately half the size of France’s population. Subsequent disease outbreaks like malaria, dengue and a looming food crisis threaten to add to the toll for the South Asian nation.

A man carries relief items along the only surviving road in a flooded region in Pakistan in Sept., 2022. Image by Abdul Majeed/European Union via Flickr (CC BY 2.0).

A man carries relief items along the only surviving road in a flooded region in Pakistan in Sept., 2022. Image by Abdul Majeed/European Union via Flickr (CC BY 2.0).

Pakistan has already suffered $15 billion in economic losses from this year’s floods that left nearly a third of the country underwater, according to the World Bank, though another estimate puts losses of infrastructure, crops and food production at more than $30 billion.

Such immense losses in poorer nations raise a difficult question regarding liability: With higher-income countries responsible for 90% of all human-generated carbon emissions, the poorer states most affected by warming are all in Asia or Africa. So who should pay?

Unpacking how much a particular country’s emissions contributed to climate-related monetary losses in another nation — possibly a full hemisphere distant — remains a tricky business. But researchers have demonstrated it is possible.

A study published this year in the journal Climatic Change estimated that over a period of 25 years, U.S. emissions depressed Pakistan’s GDP by $33 billion (calculated in 2010 dollars). The carbon footprint of the U.S. over the same time period also resulted in the most climatic harm to countries globally. But, paradoxically, U.S. emissions may have also benefited economic activity in countries like Canada and Russia, the analysis shows, where warming weather opened up new, formerly inhospitable areas to settlement and exploitation.

“Is there a scientific basis for loss and damage and climate liability? The answer is yes,” said study co-author Justin Mankin, a climate scientist at Dartmouth College in the U.S.

For their analysis, Mankin and Dartmouth colleague Christopher W. Callahan considered total accumulated emissions, which drive escalating climatic effects. (The U.S. is historically the largest global emitter of greenhouse gases, though China has overtaken it in terms of annual emissions in recent years.)

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Floods in Unity State, South Sudan, October 2022. Photo by UN Peacekeeping.

Floods in Unity State, South Sudan, October 2022. Photo by UN Peacekeeping.

Hickel at the Autonomous University of Barcelona proposed another way of assigning potential liability: estimating how much a country is responsible for the planet overshooting its carbon budget. Climate scientists believe the safe limit for atmospheric carbon is 350 parts per million (ppm). In Hickle’s formulation, countries would pay for loss and damage in the same proportion they contribute to excess emissions, with their fair share of the carbon quota based on their population size.

In 2019, for example, before the COVID-19 pandemic hit, U.S. per capita greenhouse gas emissions stood at 15 metric tons (MT) per person, compared to just 10 MT for China. For Pakistan, that figure was less than 1 MT.

“Pakistan is still well within its fair share of the safe planetary boundary [for per capita carbon emissions], and therefore it has not contributed to climate breakdown at all,” Hickle said. Therefore, “The damages it has suffered this year represent a straightforward case for reparations.”

Advances in climatic attribution research and economic accounting for destruction from extreme events and slow-onset disasters have made such calculations possible. “We can identify clear signals of culpability [now],” Mankin said. “It is for the world to decide what to do with [that evidence].”

Under the UNFCCC framework, member states have agreed not to hold individual countries liable for specific climate damages. Negotiators from the G-77 are asking for a multilateral Loss and Damage Finance Facility (LDFF), distinct from the Green Climate Fund and adaptation financing.

Despite agreeing to discuss loss and damage at COP27 for the first time ever, industrialized countries are still offering little by way of direct financing to tackle it. At past COPs, U.S. and European Union negotiators strenuously resisted calls for loss and damage financing. Even a 2009 voluntary pledge to raise $100 billion yearly for climate mitigation and adaptation funds by 2020 remains unfulfilled.

On Nov. 8, European Commission President Ursula von der Leyen took a different stance: “The COP must make progress on minimizing and averting loss and damage from climate change,” she said. “It is high time to put this on the agenda.”

In many ways, the climate crisis, and the attendant economic injustice, first dawned on low-lying island nations like Vanuatu, threatened by rapidly rising seas. Image by Eugene Kaspersky via Flickr (CC BY-NC-SA 2.0).

In many ways, the climate crisis, and the attendant economic injustice, first dawned on low-lying island nations like Vanuatu, threatened by rapidly rising seas. Image by Eugene Kaspersky via Flickr (CC BY-NC-SA 2.0).

The U.S. has yet to commit to loss and damage funding. But a handful of European countries, including Scotland at last year’s COP26 and Germany and Belgium at COP27 announced unilateral plans to begin compensating for climate damages. In September, Denmark agreed to disburse $13 million for climate damages, becoming the first UNFCCC member state to make such a commitment.

Haynes, a climate law expert at Climate Analytics, said during a call with reporters organized by the Commonwealth Foundation that “climate reparations are absolutely essential. It is not about voluntary contributions anymore.”

In lieu of significant direct financing, some developing countries are mulling other ways to tap into the necessary funds. At a meeting of delegates from 55 of the most climate-threatened countries, Mohamed Nasheed, former president of the Maldives, suggested halting repayments on debt owed to international lending agencies such as the International Monetary Fund (IMF). The nations form the V20 bloc, named after the percentage of their combined GDP that they’ve lost due to climate-fueled disasters this century alone, according to a report commissioned by the group.

The IMF is making a case for debt-for-climate swaps, essentially restructuring a country’s debt to free up funds for tackling climate challenges. But experts like Keston Perry, a political economist at Williams College in the U.S., argued in a recent meeting organized by the Commonwealth Foundation that what is required is significant debt relief, not merely restructuring.

Debt cancellation is important as a means of ensuring that badly needed economic resources are not consumed by owed payments and interest, with available money instead assigned directly to address climate impacts, he said. At present, developing countries are being crippled with additional debt to foot the bill for climate damages.

Ironically, the loss and damage money — when or if it ever gets allotted — may not reach the people who need it the most. More than a third of Denmark’s pledged funds, for example, will go to Frankfurt-based InsuResilience, which subsidizes insurance in poorer countries. Under its plan, less than a $1 million will go directly to nonprofits working in less-industrialized countries.

And even though loss and damage is finally being discussed at COP27, the history of such summits shows that international wheels turn very slowly, meaning the prospects for prompt, decisive action to deliver loss and damage payments are likely dim — with more climate-driven floods, droughts, fires and heat waves taking their toll on the world’s most vulnerable before significant economic help ever arrives.

Republished with the author's permission from Mongabay