World leaders gathered in Egypt for Conference of the Parties to the United Nations Framework Convention on Climate Change - COP2, which began on November 6, 2022, with high hopes and aspirations to mitigate emissions of harmful greenhouse gases in order to avoid, minimize, and address climate-related loss and damage. The conference is currently underway, and discussions are taking place. One of the most contentious issues in international climate negotiations has been loss and damage.

Climate-related economic and human loss is increasing at an alarming rate due to its increasing frequency and severity. Despite being the least responsible for CO2 emissions, low and middle-income countries are the most affected by climate change. The developed countries were opposed to the loss and damage, primarily for fear of liability or compensation claim by developing countries. The latest report from the UN Inter governmental Panel on Climate Change (IPCC) provided strong evidence that developing countries have already suffered loss and damage because of human-induced climate change. Delegates from developing countries reiterated their call for a firm commitment to dealing with loss and damage.

Loss and damage have long been ignored, and the costs are being borne by those who are the least responsibility for the global warming. The UN Secretary General António Guterres rightly stated, at COP 27, that there is no way to adapt to the devastating effects of climate change, and that loss and damage cannot be ignored. Addressing loss and damage, as well as compensating poor and vulnerable countries, should be a top priority at COP-27.

The latest IPCC science, released earlier this year, is certain that the effects of climate change will worsen even if emissions are reduced to limit global average temperature rise to 1.5 degrees Celsius above pre-industrial levels, because mitigation and adaptation measures have been slow and insufficient. Moreover, some climate change impacts are unavoidable as they have already been 'locked in' to the Earth's system and losses and damages may occur where adaptation limits have already reached, and adaptation is not possible physically, technically, or socially.

According to the International Fund for Relief and Development extreme weather events and climate disasters have killed more than 410,000 people and affected 1.7 billion people around the world over the last decades. In 2020 alone, 30 million people were displaced due to weather related events. As per World Meteorological Organization study 2021, economic losses due to weather, climate and water extremes have increased from $175 billion in 1970-1979 to $1.38 trillion in 2010-2019.

Even though loss and damage are a worldwide phenomenon, low- and middle-income countries have borne a disproportionately large portion of these losses in spite of their limited capacity. For instance, in Bangladesh, every year thousands of people lose their crops, cattle, land, homestead, and livelihood assets and they are displaced from home due to floods, riverbank erosion, cyclones, and other natural disasters. Thousands of people were displaced by the super cyclones Sidr and Aila. According to a World Bank report published in 2018, as many as 13.3 million Bangladeshi may be compelled to migrate by 2050 due to intensified climate impacts. Losing land, homestead and livelihood assets, most of them move to towns and cities and shelter in slums. According to the IPCC recent assessment, Bangladesh suffers huge economic and non-economic losses due to change in climate. Climate-related disasters have affected approximately 850,000 households and damaged about 250,000 hectares of cultivable land in Bangladesh. A devastating flood affected 33 million people in Pakistan in August 2022 due to climate crisis.

The Cancn Adaptation Framework first recognized loss and damage at COP 16, and the Warsaw International Mechanism for Loss and Damage was established at COP 19. Loss and damage were first recognized separately from adaptation in the Paris agreement, and an Article on Loss and Damage was dedicated, but with no commitment for means of implementation, only for dialogue.

Loss and damage was also a contested issue in COP 26 held in Glasgow, UK. The Glasgow Climate Pact has strengthened the commitment to combat climate change as well as recognized loss and damage as an important aspect of climate negotiation. Loss and damage has been dedicated a full section (Section VI paragraph 37 to 45) at par with mitigation and adaptation. The COP 26 acknowledges, "climate change has already caused and will increasingly cause loss and damage and ..., will pose an ever-greater social, economic and environmental threat". It also reiterated the "urgency of scaling up action and support, as appropriate, including finance, technology transfer and capacity-building, for implementing approaches to averting, minimizing and addressing loss and damage associated with the adverse effects of climate change in developing country Parties that are particularly vulnerable to these effects".

Despite the recognition, no concrete step has been taken to establish separate funding mechanism for loss and damage to compensate the poor people of developing countries who are least responsible for greenhouse gas emission and global warming but withstanding the worst of the climate change impacts.

The COP27 must prioritize loss and damage in order to support climate-vulnerable countries and the poor people. It should also acknowledge developed countries' accountability for historical emissions and the resulting changes in the climate and environment. The existing financial mechanisms, such as the Global Environment Facility, Green Climate Fund, and Adaptation Fund, have not been able to mobilize or deliver funds for loss and damage caused by climate change. Without a mechanism to finance loss and damage, climate justice will remain incomplete. A dedicated funding facility should be established to provide new and additional financial assistance to developing countries in order to address loss and damage caused by the adverse effects of climate change. It is also important to consider the institutional structure and operational modalities necessary to catalyze technical assistance through the Santiago Network on Loss and Damage (SNLD). In addition to establishing a financing mechanism for loss and damage, increased efforts are required to mitigate greenhouse gas emissions and limiting global warming to 1.5 °C as envisioned in Paris Agreement.

Dr. Golam Rasul (Ph.D) is Professor, Department of Economics, IUBAT- International University of Business Agriculture and Technology. He was a Coordinating Lead Author of IPCC Special Report on Ocean and Cryosphere