Explainer-COP27: What is 'Loss and Damage' compensation, and who should pay?

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Nov 6 (Reuters) - Nearly 200 countries gathering for the U.N. clime conference successful Egypt are expected to fastener horns implicit whether affluent nations should wage compensation to susceptible states deed by climate-fuelled disasters.

The COP27 acme follows a twelvemonth of specified disasters, from floods that killed much than 1,700 people successful Pakistan to drought withering crops successful China, Africa and the U.S. West. That has intensified developing state demands for a peculiar "Loss and Damage" fund. But with affluent countries resisting specified calls, the contented has been stalled for years.

Here's wherever things basal up of COP27.


In U.N. clime talks, the operation "Loss and Damage" refers to costs already being incurred from climate-fuelled upwind extremes oregon impacts, similar rising oversea levels.

Climate backing truthful acold has focused connected cutting c dioxide emissions successful an effort to curb clime change, portion astir a 3rd of it has gone toward projects to assistance communities accommodate to aboriginal impacts.

Loss and harm backing would beryllium different, successful compensating costs that countries can't debar oregon "adapt" to.

But determination is nary statement yet implicit what should number arsenic "loss and damage" successful clime disasters - which tin see damaged infrastructure and property, arsenic good arsenic harder-to-value earthy ecosystems oregon taste assets similar burial grounds.

A June study by 55 susceptible countries estimated their combined climate-linked losses implicit the past 2 decades totalled astir $525 billion, oregon astir 20% of their corporate GDP. Some probe suggests that by 2030 specified losses could scope $580 cardinal per year.


These questions are highly contentious.

Vulnerable countries and campaigners person argued that affluent countries that caused the bulk of clime alteration with their humanities emissions should present pay. The United States and European Union person resisted the argument, fearing spiralling liabilities.

If countries bash hold to motorboat a fund, they would request to thrash retired details specified arsenic wherever the wealth should travel from, however overmuch affluent countries should pay, and which countries oregon disasters suffice for compensation.

The EU and United States blocked a connection astatine past year's U.N. clime talks to found a fund, agreeing alternatively to a "dialogue" without a wide extremity goal. Over the past month, they person signaled much openness to discussing compensation astatine COP27, but stay wary of creating a fund.

Only a fewer governments person made small, symbolic backing commitments for nonaccomplishment and damage: Denmark and Scotland, positive the Belgian portion of Wallonia.

Some existing U.N. and improvement slope backing does assistance states facing nonaccomplishment and damage, though it is not officially earmarked for that goal.


Developing countries person projected putting nonaccomplishment and harm connected the acme agenda, which indispensable beryllium adopted unanimously earlier the talks get underway.

Frustrated by difficulties and delays successful securing clime finance, processing and emerging economies are present agreed successful demanding that a nonaccomplishment and harm money beryllium established astatine COP27.

Among them are land states similar the Maldives and Jamaica, and China, itself the world's biggest CO2 emitter, which has rankled immoderate European officials who accidental China should beryllium providing clime finance, not demanding it.

Countries person made antithetic proposals for what the money should look like. Even if COP27 yields a woody to signifier a fund, it could inactive instrumentality a mates years earlier it is acceptable to disperse money.

Some diplomats person suggested a "mosaic" of backing sources beryllium organised, alternatively than 1 cardinal fund.

Another connection from the Alliance of Small Island States suggests COP27 hold to signifier a U.N.-hosted "response fund" to cod currency from assorted sources for countries struck by disasters.

The EU has suggested harnessing existing planetary funds to tackle nonaccomplishment and damage, alternatively than launching a caller one, but immoderate experts accidental issues similar agelong delays marque those funds unsuitable for addressing nonaccomplishment and damage.


Already mistrustful aft affluent nations failed to present $100 billion successful climate concern annually by 2020, immoderate countries are exploring different routes.

The "V20" radical of 58 susceptible countries and the Group of Seven affluent nations program to motorboat an effort called "Global Shield" astatine COP27, aimed astatine strengthening security and catastrophe extortion finance.

Meanwhile, climate-vulnerable countries are seeking contributions for a aviator nonaccomplishment and harm backing facility. Other ideas see U.N. Secretary-General Antonio Guterres's telephone for a windfall nett taxation connected fossil substance companies to rise funding.

The Pacific land state Vanuatu, meanwhile, has asked the world's highest tribunal - the International Court of Justice - to contented an opinion connected the close to beryllium protected from adverse clime impacts. An ICJ sentiment could transportation motivation authorization and ineligible weight, strengthening calls for compensating mediocre nations.

Reporting by Kate Abnett; Editing by Katy Daigle and Deepa Babington

Our Standards: The Thomson Reuters Trust Principles.

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