The 27th Conference of Parties (COP-27) at Sharm el-Sheikh in Egypt concluded with the establishment of the much-awaited Loss and Damage Fund. The most vulnerable, developing countries, including South Asian ones have been demanding finance from the industrialized countries (that have ‘historical responsibility’ for climate change) for the losses and damages suffered by the former. Hence, this outcome is regarded as a historic victory for them, and more generally, for climate justice. “Loss and damage” refers to climate change impacts that cannot or have not been avoided by greenhouse (GHG) emissions reduction/climate mitigation or climate adaptation. Loss and damage is an issue on which developing countries have had essentially similar positions since the beginning of these discussions within the United Nations Framework Convention on Climate Change (UNFCCC); yet they have not until recently been able to influence the agenda through concertedly galvanized efforts.
Climate change-related extreme weather events have become the new normal in South Asia. The human and economic impacts of these events have grown manifold. In 2022 alone, the region witnessed a deadly heatwave (mainly in India and Pakistan) and catastrophic floods (the worst being in Pakistan). The future does not look promising either as studies reveal that such phenomena are expected to get worse in the coming decades. The sixth assessment report of the Intergovernmental Panel on Climate Change (IPCC) estimates that about 3.6 billion people across the globe live in “contexts that are highly vulnerable to climate change,” which includes South Asia. Importantly, the report also mentions “historical and ongoing patterns of inequity such as colonialism” as contributors to vulnerability of many such regions – an acknowledgement that is often overlooked in global climate governance. The magnitude of the impacts of 2022 Pakistan floods aptly underscores these patterns of inequity. It is against this background that South Asian nations spoke in one voice about the urgency of setting up a loss and damage financing facility at COP-27, held in November 2022. Interestingly, they have traditionally not had a official common position on climate change (despite common interests) in the climate change negotiations.
South Asia’s Growing Climate Vulnerabilities
Stretching from the lofty Himalayan mountain range system in the north and largely arid/semi-arid ecosystems of Afghanistan in the north-west to the tropical island nations of Sri Lanka and (low-lying) Maldives in the south and the mostly low-lying deltaic plains of Bangladesh in the east, South Asia is home to diverse ecological/climate conditions. The region thus faces multifaceted and diverse challenges, including increasingly erratic monsoon patterns, glacial melting, flooding, forest fires, cyclones, and droughts among others – all exacerbated by anthropogenic climate change. Factors such as high population density, poverty and inequity, and (geo)political tensions having socio-economic, cultural, colonial, and other historical roots, also contribute to increased vulnerability of the region in the face of rapidly intensifying impacts of climate extremes.
The region’s climate vulnerabilities are well-established. The IPCC’s sixth assessment report highlights that with rising temperatures, increasing inter-annual variability of the monsoon could become a new normal in the region. This could adversely affect economic, water, livelihood, and food security in South Asia, considering that about three-fifth of the region’s cropped area accounts for rain-fed agriculture, on which a significant proportion of the population is dependent for livelihoods. While studies have estimated a reduction in crop yields (especially cereal production) in South Asia by the end of the century due to various reasons including climate change, they also assess the risks posed by a 2°C rise in temperature in terms of malnutrition and micro-nutrient deficiencies in the region.
Additionally, the IPCC report has identified South Asia as one of the “global hotspots of high human vulnerability” because of the scale and nature of development-related challenges. In this context, it is important to acknowledge that climate change-related impacts could create not only a hindrance to development, but also trigger a reversal of recent developmental gains made in the region. Infrastructural damages and impacts on human health and well-being due to recurring floods, cyclones, and many other such climate extremes have led to significant loss of both physical and human capital.
A 2018 study has predicted that by 2050, the South Asian economies will collectively lose 1.8 percent of its GDP on account of climate change. This would also have other knock-on effects such as potential decline in living standards. Other studies estimate that floods alone could cost the region as much as USD 215 billion every year by 2030, and by 2050, the number of climate migrants in the region could go up to 40 million. Hence, an understanding of the complex and systemic risks posed by climate change becomes extremely crucial to design policies and measures to address these vulnerabilities.
South Asia at COP-27
The intensified scale and magnitude of disasters that the South Asian region faced in 2022 however seemed to be the trigger that strengthened the G-77 and South Asian nations’ positions on the loss and damage issue. The devastating 2022 Pakistan floods, which affected almost 33 million people and caused damage amounting to USD 15 billion, in particular led to the country’s leadership taking charge of the loss and damage negotiations as a part of the G-77 & China. As large parts of Pakistan continue to remain under water, with many people still living in relief camps and many having lost their shelter and livelihoods, the country is in dire need for international assistance for recovery, rehabilitation, and reconstruction.
Loss and Damage fund has remained a significant concern for developing vulnerable countries, since almost three decades. The Maldives, a member state of the Alliance of Small Island States (AOSIS) has been highlighting the existential threat posed by climate change to its survival since the beginning of the climate change negotiations. Having been a leading voice on loss and damage for decades, before the commencement of COP-27, the Maldives brought up the issue in the September 2022 UN General Assembly (UNGA) meeting and advocated for a “mosaic of approaches” to address loss and damage in a holistic manner.
Similarly, Bangladesh, a member state of several groupings comprising the most vulnerable countries of the world, including the he Least Developed Countries (LDC), is at the forefront of battling climate change impacts. It played a prominent role in putting forth a common demand on a loss and damage fund to the G-77 a few years ago through pre-COP planning workshops and other events. This, along with efforts by other vulnerable countries, led the G-77 to unite further on this issue; and ultimately, the Santiago Network was established at COP-25 (Madrid) – a technical body to address loss and damage.
Loss and damage has been one of the thorniest issues in global climate governance because of its association with liability and compensation, which industrialized countries have long resisted in the negotiations. The first call for addressing climate-induced loss and damage was raised by Vanuatu in 1991 at the Intergovernmental Negotiating Committee, set up by the UNGA to negotiate the UNFCCC, when it called for “an international fund and insurance pool based on the polluter pays principle.” The Warsaw International Mechanism for Loss and Damage associated with Climate Change Impacts (WIM), aimed at addressing loss and damage through dialogue, knowledge sharing, and technical support, was established in 2013 more than two decades later. It took almost a decade since then to establish a Loss and Damage Fund.
The road to establishing the Loss and Damage Fund at COP-27 was also arduous as industrialized countries continued to use various tactics to dilute the CBDR-RC (Common but Differentiated Responsibilities & Respective Capabilities) principle of the UNFCCC by demanding countries such as India and China to contribute to the fund; and at times, by attempting to restrict the number of countries that could access the fund. They also launched an insurance-based mechanism – ‘Global Shield’ – to support the most vulnerable countries, which was seen by developing countries and non-governmental organizations as a mere “distraction” from their obligation to establish the loss and damage fund.
The agreement is a significant win for the Global South, including for South Asia that unitedly fought for the inclusion of loss and damage as a COP-27 agenda item and thereafter, the establishment of the fund itself. For South Asia, owing to the region’s extreme vulnerabilities, this fund could prove to be critical. Moreover, this move is being seen as a victory of climate justice in general. The fact that despite having per capita emissions well below the global average, South Asian countries, including India, Pakistan, Bangladesh, and Nepal are among the top ten most affected countries underscores a form of climate injustice that needs to be addressed in global climate governance.
All South Asian nations collectively demanded support for both ex-ante (early warning, resilience-building, etc.) and ex-post (relief, recovery, etc.) measures to deal with climate-induced loss and damage. They also stressed upon the need for new, additional, adequate, and predictable funding, in the form of grants rather than loans or other financial mechanisms that could push developing countries into deeper debt. As the industrialized countries continued to engage in their efforts to dilute principles of CBDR-RC and climate justice, the South Asian countries uncompromisingly fought for them throughout the negotiations.
The Battle is far from Over
On loss and damage, the battle is far from over. Several questions with respect to who would contribute to the fund, how much, and who would be the beneficiaries, remain unresolved. Which countries would constitute “particularly vulnerable” within the purview of the fund remains unclear and therefore, the probability of the emergence of contentions over it remain high. Until the fund is operationalized, and its decision-making and technical procedures are determined, the Global South would have to continue to keep fighting for their rightful share of finances to deal with climate-induced loss and damage.
Having learnt lessons from the past on climate finance-related pledges made by the industrialized countries that have time and again been broken, the Global South cannot afford to dilute the solidarity that it showcased at COP-27. It is in the interest of countries of the Global South, including South Asian ones, to keep aside their geopolitical and other differences, to push the industrialized ones to deliver on their commitments, and pay up their fair share of climate finance. This is crucial for the upcoming COP-28 in Dubai, wherein the decisions of COP-27 will be further concretized.
South Asian countries have put in place several national plans and strategies to mitigate and adapt to climate change, but progress on cooperation through regional organizations has been slow, the causes of which primarily lay in the complex geopolitics of the region. To deal with a challenge that is not confined by political boundaries, and which is characterized by shared and similar challenges and interests, it becomes imperative for South Asia to strengthen regional collaboration. The region is in dire need of financial and technical resources and capacities to cope with climate change-related impacts. Presenting a united front through a regional common position, not only on loss and damage, but also other pillars of climate action (mitigation and adaptation), would help amplify the region’s concerns in global forums and thus the region’s needs could be better met. The issue of loss and damage presents an opportunity for South Asian countries to collaborate in many ways, including sharing technical knowledge on vulnerabilities and assessing the requirements in terms of resources. However, it remains to be seen whether this would indeed emerge as a catalyst for climate cooperation in South Asia and if the countries would together envisage the possibility of developing an inclusive regional climate action plan.
A shorter version of this article, focussed on the Indo-Pacific region, titled – Can Loss and Damage Trigger Solidarity in the Indo-Pacific? – has been published by the Indo-Pacific Circle. This article is reproduced with permission.
Disclaimer: The views expressed in the article are personal.
Priyanka Jaiswal is an alumna of the Department of Geopolitics and International Relations (DGIR), Manipal Academy of Higher Education (MAHE), Karnataka.
Dr. Dhanasree Jayaram is an Assistant Professor, DGIR, MAHE.
