Policy paper

Discussion paper: UK action to support countries to avert, minimise and address the risk of loss and damage from climate change

Published 8 November 2021

Section 1: Intro and context

COP26 will be an opportunity to set out more detail on responding to the call made at COP25 for greater action on loss and damage. The Presidencies have undertaken consultations on how best to do this, including developing the Santiago Network. The UK recognises the growing risk of loss and damage from climate change and has responded through our climate, development, and humanitarian investments. Considering the stark warning from the latest IPCC report on the impacts of climate change across the globe, now is the time to take stock and move the dialogue on loss and damage forward. The UK has prepared this paper as a contribution to the debate; reflecting our experiences to support practical actions relevant to averting, minimising, and addressing the risk of loss and damage from climate change.

Section 1 sets out the importance of the issue and the challenges of defining appropriate action. It recognises that there remains a lack of consensus on loss and damage definitions and approaches and that relevant action is needed from a range of actors and sources of finance. Against this background, Section 2 provides an overview of relevant action the UK has invested in and a summary of lessons learnt. Section 3 sets out proposed areas for action to strengthen efforts on loss and damage.

This is a discussion paper and does not constitute a formal UK policy position on loss and damage, nor part of any negotiation position.

Context

The latest report of the Intergovernmental Panel on Climate Change (IPCC)^{[footnote 1]} states that “It is unequivocal that human influence has warmed the atmosphere, ocean and land.” Evidence of observed changes in extremes such as heavy rainfall, droughts, and cyclones, and their attribution to human influence, has strengthened since the last IPCC report. It is clear climate change is already having impacts across the globe. Impacts are through both extreme events such as heat waves, fiercer and more frequent storms, unpredictable rainfall bringing floods and droughts; and slower onset events such as rising sea levels, acidification of our oceans and desertification of our land. While no- one is immune, it is the poorest and most vulnerable who are hardest hit, including young people, women and girls, people with disabilities and indigenous peoples.

Global warming of 1.5°C and 2°C will be exceeded during the 21st century unless deep reductions in carbon dioxide (CO2) and other greenhouse gas emissions occur in the coming decades. The goal of the Paris Agreement to limit warming to this level is within reach, with rapid and immediate decarbonisation. However, impacts are already locked in due to temperature rise and even at 1.5 C will be severe, but less serious than at higher temperatures. Every fraction of a degree of warming reduced makes a substantive difference to the impacts experienced.

Snapshot of climate- and weather-related disasters and their impacts (source: Red Cross World Disasters Report 2020):

• in the past 10 years, 83% of all disasters triggered by natural hazards were caused by extreme weather- and climate-related events, such as floods, storms, and heatwaves
• the number of climate and weather-related disasters has been increasing since the 1960s and has risen almost 35% since the 1990s
• the proportion of all disasters attributable to climate and extreme weather events has also increased significantly during this time, from 76% of all disasters during the 2000s to 83% in the 2010s
• these extreme weather- and climate-related disasters have killed more than 410,000 people in the past 10 years, the vast majority in low and lower middle-income countries. Heatwaves, then storms, have been the biggest killers
• a further 1.7 billion people around the world have been affected by climate and weather-related disasters during the past decade

What is loss and damage from climate change?

As our climate changes, there are many ways we can adapt our way of life, from water efficient farming methods, to building flood defences and storm shelters and redesigning cities to cope with heatwaves. But our ability to adapt has limits. Some impacts will not or cannot be prepared for. This will lead to loss and damage to income and physical assets and non-economic loss and damage, for example to lives, livelihoods, cultural heritage and biodiversity.

There is no globally agreed definition of loss and damages from climate change. It is generally considered to refer to climate impacts which occur despite efforts to mitigate or adapt to climate change^{[footnote 2]}. Loss and damage can occur because measures put in place to cope or adapt are not adequate, resulting in costs that are not regained or are erosive.^{[footnote 3]} For example, a flood event may breach flood defences or drought may lead to individuals selling assets to cope that are not regained and increase vulnerability to future events.

Loss and damage can also occur because measures are not put in place because limits to adaption have been reached. The IPCC differentiates between “soft limits of adaptation”, where adaptation options exist but are not available or accessible and “hard limits of adaptation”, where adaptation options do not yet exist^{[footnote 4]}.

The IPCC Special Report on Global Warming of 1.5oC^{[footnote 5]} gives an assessment of current understanding of these limits under 1.5 oC and 2 oC of global warming. It states that while most adaptation needs will be lower under a 2 oC scenario, there are “limits to adaptation and adaptive capacity for some human and natural systems at global warming of 1.5°C, with associated losses… Some vulnerable regions, including small islands and Least Developed Countries, are projected to experience high multiple interrelated climate risks even at global warming of 1.5°C”. The report highlights limits in natural systems such as tropical coral reefs and acutely vulnerable areas, particularly small islands stating: The combination of rising seas, larger waves and increasing aridity “might leave several atoll islands uninhabitable” with 1.5C of warming.

The type and severity of loss and damage experienced will be highly context dependent. The IPCC AR5^{[footnote 6]} report noted that loss and damages will depend not only on the mitigation and adaptation efforts, but also disaster risk preparedness and disaster response capacity. It will also be dependent on non-climatic factors and policy choices which affect the country’s level of vulnerability. For example, neglect of sea defences can lead to devastating floods. It is therefore very difficult to define the proportion of any loss and damage caused by climate change alone. The report declined to define ‘loss and damage’ as a category, referring to specific ‘losses and damages’ instead.

The potential risk of experiencing loss and damages by any country or population will depend on their exposure and vulnerability to climate hazards. Conflict, weak economy and poor governance is a major exacerbating factor both reducing capacity to cope and increasing vulnerability for the poorest. Poor people are disproportionality affected by climate related shocks and stresses because they are more exposed and more vulnerable and have less access to resources to prevent, cope and adapt^{[footnote 7]}.

What can we do about it?

Action to avert, minimise and address the threat of loss and damage is urgently needed. World leaders, global institutions, private business and civil society must work together to deliver on the call from COP25 (Decision 2/CMA.2) to scale up action and support to avert, minimise and address loss and damage.

The range of action needed is reflected in UNFCCC Article 8 (Paris Agreement), which sets out “areas of cooperation and facilitation to enhance understanding, action and support” which may include:

(a) Early warning systems

(b) Emergency preparedness

(c) Slow onset events

(d) Events that may involve irreversible and permanent loss and damage

(e) Comprehensive risk assessment and management

(f) Risk insurance facilities, climate risk pooling and other insurance solutions

(g) Non-economic losses

(h) Resilience of communities, livelihoods and ecosystems

There is broad consensus that adaptation, risk reduction, disaster preparedness and early action is essential to minimising and averting loss and damage. There is less consensus on what actions are needed to address loss and damage when they occur. However, they should include responses following climate shocks, recovery, rehabilitation and reconstruction. More transformative actions are needed when limits to manage climate related risks are reached eg. support for voluntary migration or planned relocation, support for alternative livelihoods and economic systems.

There is a need to develop understanding and enable open dialogue on what loss and damage practical action should constitute, particularly in relation to complex issues linked to slow onset events and non-economic loss and damages. The Warsaw International Mechanism under the UNFCCC is helping bring together technical expertise to address some of these gaps. Current actions to deliver responses to loss and damage are through a range of mechanisms, including social protection and financial measures and draw on multiple sources of finance including development, climate and humanitarian assistance and private finance. A greater common

understanding of how these existing systems can respond to loss and damage, how to strengthen and align them; and what may be needed in addition is required.

Section 2: UK approach and experience: practical action to addressing the risk of climate related loss and damage

The UK has committed to doubling our International Climate Finance to £11.6 billion over the next 5 years. This will help support efforts to avert, minimise and address loss and damage alongside other relevant sources such as humanitarian finance. The UK spent £2 billion of our International Climate Finance (ICF) in 2016-2019 on adaptation and investments in areas needed to address loss and damage. This included around £202 million on Humanitarian assistance (directly linked to climate change and building resilience to it), £283 million on Social protection and £115 million on Financial protection and risk management. A summary of these areas and lessons learnt is set out below:

Investing in adaptation

The UK has invested in research and technology to understand and equip vulnerable countries and populations to adapt to climate change. For example, research to identify cost-effective and sustainable ways to improve the resilience of the poorest and most vulnerable people and communities in climate change ‘hot spots’. We have invested to increase access and availability of agricultural technology to improve climate resilience of small-holder farmers in Sub-Saharan Africa. We have also invested in practical action on the ground: for example, developing integrated disaster risk reduction and climate adaptation development approaches in fragile and conflict affected communities; and helping cities plan and invest in reducing the impacts of weather-related changes and extremes. Our adaptation investments have provided technical support to increase government capability in vulnerable countries to mainstream adaptation into national planning, policy and budgeting.

Investing in risk management

Our investments in this area include increasing vulnerable countries capacity in Asia and Africa in climate science, forecasting and early warning systems to understand and manage climate risks. We have deployed the best UK expertise through establishing partnerships in a range of highly vulnerable countries with the UK Met Office. We have worked to galvanise international investment and action in early warning and preparedness by establishing the Risk informed Early Action Partnership (REAP). This aims to bring together stakeholders to scale up practical action to improve early warning and action to make 1 billion people safer from climate risk and disasters by 2025.

WISER: Weather and Climate Information Services for Africa

Aims to help at least 24 million people across Africa to be more resilient to natural disasters and climate change by 2030 by improving early warning systems.

Example of activities: delivering early warning products and services to populations and sectors in Tanzania. The Multi-Hazard Early Warning Tanzania project enhances the capacity of the Tanzania Meteorological Agency (TMA) to reduce the impacts of extreme weather on coastal regions of Tanzania . The project initially focussed on public weather service and sectors including marine, fishing, agriculture. The TMA and the Met Office worked closely with sector stakeholder partners as well as representatives from the Disaster Management Department to understand requirements and jointly develop relevant early warning products and services.

Investing in humanitarian response to climate shocks

Our ability to adapt has limits and these limits will be context specific. We need to continue and improve our humanitarian response to climate related shocks. The UK has invested in supporting vulnerable people and their governments to cope with the impacts of climate variability and shocks through our humanitarian programmes, including with life-saving assistance to natural disasters when they occur. Alongside this, we have invested in piloting work to support better anticipatory action in advance of climatic shocks and swifter responses that help build back better. We are also working to transform humanitarian action to make it more proactive, more innovative and more locally led, for example through the START network.

The START Network

Aims to transform humanitarian action through innovation, fast funding, early action, and localisation. Catalysing change in 3 ways:

• shifting humanitarian financing from a reactive to a proactive model
• creating a more balanced system that shifts power and decision-making to those closest to the frontline
• facilitating collective innovation to solve humanitarian problems locally and globally

Example of activities: Start Fund Bangladesh (SFB) is a £10 million rapid emergency response fund that was created in 2017 with support from UK Aid. Modelled on the Start Network’s successful Start Fund, which activates funding within 72 hours of a crisis alert, it fills a crucial gap in humanitarian funding. It is accessible to local, national, and international member non-governmental organisations (NGOs) operating in Bangladesh to respond early to under the radar emergencies.

Investing in social and financial protection

The impacts of climate related loss and damages are uncertain and context dependent. We need to invest in well-designed social and financial protection measures that can support vulnerable countries and communities to prepare and respond to both climate shocks and slow onset impacts. The UK has invested in flexible social protection systems to build resilience of the most vulnerable groups to the impacts of climate variability and change in highly vulnerable areas such as the Sahel. We have invested in safety net programmes that provide cash transfers to vulnerable populations during drought emergencies.

We are working with partners to develop innovative financial protection measures such as forecast based financing, Index based risk insurance pools and contingent credit. We are also working to help develop markets for private sector disaster risk responses. These innovative financial measures can enable access to more rapid finance in emergencies and strengthen preparedness of local systems for disaster response and recovery.

Galvanising international action

We recognise that finance on its own is not sufficient. Addressing the risks of climate related loss and damages will require scaled up and coordinated action across multiple sectors and actors. Leadership is needed and the UK is seeking to deliver real action, for example through the Adaptation Action Coalition and LIFE-AR which build on the 2019 UN Climate Action Summit (UNCAS) ‘Call for Action on Adaptation and Resilience’ launched by the UK, Egypt, Bangladesh, Malawi, Netherlands, St Lucia and supported by UNDP. The Call for Action has been signed up to by 122 countries, the EU and 86 organisations. Further efforts are needed to increase dialogue on loss and damage to respond to the what the science is telling us on the growing risks and identify practical action needed.

What have we learnt: key lessons from UK experience

1. Increase local action and ownership: the most vulnerable in society are hit hardest by the risk of climate related loss and damages. We need to increase support for locally-led adaptation and projects that explicitly involve, and deliver for, marginalised groups, including women and girls, indigenous people, and youth – this is an important requisite for effective action. The new LDC LIFE-AR initiative, supported by the UK, aims to place local action at the heart of efforts on adaptation and resilience.

2. Vulnerability and resilience to natural disasters needs to be strengthened and considered explicitly in all key sectors: the UK’s Independent Commission on Aid Impact (ICAI) found that the UK’s humanitarian, environmental and climate related programmes were consistently contributing to reducing vulnerability and strengthening resilience^{[footnote 8]} (ICAI Review 2018). However, the review also found that performance was more variable in other sectors, such as health, education, infrastructure and governance, where resilience to natural disasters was not an explicit objective.

3. Improve lesson learning and tracking of results and spend across the continuum of activities contribution to action on loss and damage: actions to help avert, minimise and address climate related losses and damage take place across a range of funding sources, organisations and sectors. We therefore need to develop ways to systematically track relevant expenditure and to gather, synthesise and communicate lessons and knowledge. This is particularly true in terms of tracking and learning lessons from non-climate finance eg. humanitarian. This can help build better programmes that integrate the two sectors.

4. Invest in anticipatory action: climate change is having a growing impact on the severity and frequency of crisis. Investing in anticipatory action before the worst impacts of a climate shock occur can save lives, stop needs growing, reduce suffering and maximize the impact of limited funding. In recognition of the importance of progress on this agenda, the United Nations and the governments of Germany and the United Kingdom convened a High- Level Event to advance anticipatory action and galvanise a collective push to act ahead of crises. As part of this push, the UK committed £3.1 million in new funding to the Start Network and to work with the Centre for Disaster Protection to assess levels of pre-arranged financing for action ahead of crisis across all our ODA. A range of robust signals of support followed from Ministers and senior officials from 75 UN Member States and leaders from 60 UN agencies, Red Cross partners and civil society leaders in attendance. Through testimony from beneficiaries and results from the numerous pilot projects, speakers demonstrated that for predictable humanitarian crises, anticipatory action is faster, less expensive, more effective and provides a more dignified response. It saves lives, reduces needs and protects development gains.

5. Support countries to understand and plan for loss and damage in their local context: countries need to understand their specific climate risks and actions to minimise, avert and address loss and damage. Actions need to be integrated across national climate, development and humanitarian plans and polices, including NAPs and NDCs. For example, the UK is supporting the government of Nepal to better understand loss and damage issues in Nepal and develop a framework to compare risk reduction investments. Its intent is to help in the costing of adaptation and risk reduction efforts at national, provincial, and local levels.

6. Understand the risk and limitations of existing measures: there are potential risks associated with the measures available to respond to loss and damage. For example, the example the risk of maladaptation in measures such as planned re-locations. A recent FCDO evidence review on climate and migration suggests in certain circumstances these could create or worsen vulnerabilities. Measures such as social protection need to be fit for purpose – flexible and embedded into local and national government systems and planning. Financial protection measures have limitations especially for very poor people or those exposed to frequent shocks.

7. Understand and address the limits in our knowledge of the risks of climate related loss and damage: there is a lack of knowledge and deep uncertainty on the risks of irreversible and permanent loss and damage and limits to adaption. Particularly, how these relate to slow onset impacts, like sea level rise and the impacts of reaching tipping points. These impacts may need more transformative measures to respond to bio-physical limits being reached or because options to manage the risk are not economically or politically feasible. The UK is investing in relevant research, such as on climate change and migration and agriculture but it is an area where further attention is needed. Along with increasing knowledge of the risks, practical solutions that deliver help to impacted communities need to be developed and tested. For example, solutions that can respond to the combined impact of slow onset events and shocks e.g. the impact of gradual salt water intrusion on agriculture from sea level rise may be sharply accelerated due to a cyclone event. Solutions can bring together different sectors and agendas, for example the UK’s work on valuing nature through the Dasgupta Review^{[footnote 9]} provides scope for governments to better understand potential non-economic loss and damage to biodiversity and ecosystems.

Section 3: Forward look: areas for action

The UK is committed to championing loss and damage during our Presidency in response to the challenges set out by the latest IPCC report. We will work with key partners including the forthcoming COP Presidency and through UNFCCC bodies; the Warsaw International Mechanism and the Santiago network, to keep building momentum towards COP27.

The UK as a major donor in this area will build on our investments and lesson learning outlined in this paper. Based on our experience to date and dialogues with partners, there are 3 key areas where we will prioritise dialogue and action to step up global efforts to address the risks of climate related loss and damage

1. Delivering on adaptation:

• scale-up, accelerate and finance adaptation efforts commensurate with the scale of the challenge
• improve access to finance, particularly for the most vulnerable
• shift to more long term, locally led programmatic support

2. Making the systems work:

• integrate climate risk and science into national, local and business planning
• scale up support for preparing and responding to impacts, including anticipatory action
• align disaster, humanitarian and climate communities and financing; streamline processes to enable better access and response

3. Step change in understanding, dialogue and action on loss and damage:

• catalyse greater technical assistance for developing countries vulnerable to the impacts of climate change to avert, minimise and address loss and damage - including through operationalising the Santiago Network
• support scientific understanding and technical work on averting, minimising and addressing loss and damage and the limits to adaptation
• testing new approaches and bringing partners together across the climate, development and humanitarian space
• work with non-state actors, particularly private sector to increase understanding of implications of loss and damage and help find innovative solutions

Key loss and damage events at COP26: the launch of the OECD working group paper on loss and damage and the Red Cross Climate Centre event being held as part of the Adaptation, Loss and Damage Day will take dialogue forward. Key insights from those events and feedback on this paper will help inform our work on loss and damage over the course of the UK presidency.

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