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Loss and Damage in the context of Adaptation to Climate Change

Oxford University, UKSeptember 2011

Dr. Sumaya Ahmed Zakieldeen, Institute of Environmental Studies, University of Khartoum

Dr. Koko Warner, Munich Climate Insurance Initiative & United Nations University

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for sustained capacity building in support of international climate change negotiations

pour un renforcement durable des capacités en appui aux négociations internationales sur les changements climatiques

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Introduction

• In the past years, there has been a large rise in the number of disasters (from between 200 and 250 in the period 1987–97 to about double that in the first seven years of the 21st century).

• This rise is caused almost entirely by an increase in weather-related disasters

• Disaster statistics also show that floods are occurring not just more often but also damage greater areas than they did two decades ago

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Number of natural disasters (Red cross/Red Crescent, 2007)

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Con…

• In the past quarter century over 95% of deaths from natural disasters occurred in developing countries, and

• direct economic losses (averaging US$100 billion per annum in the last decade) were more than double in low-income versus high-income countries.

• accompanied by losses in livelihoods and increase in the number of people affected

• Limited chances of recovery in developing countries (lack of insurance, indebtedness etc.)

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IPCC, AR4

• The IPCC’s Fourth Assessment Report confirmed that:

climate change will bring more frequent and more intense extreme weather events

• The increase in hazard exposure and in vulnerability; point to a continuing trend of increasing losses due to natural disasters; particular in developing countries

• Most vulnerable are people living in Least Developed Countries, Small Island Developing States and African countries

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Link between disaster risk reduction adaptation

• Climate variability causes changing weather patterns which will most likely result in more extreme weather events; including a higher frequency and magnitude of weather-related hazardous events ( e.g. floods, droughts and tropical cyclones).

• The changes in the regional climate, environmental conditions as well as continuous societal changes, such as demographic changes and the global increase of urban settlements in coastal areas, make it likely that the exposure and vulnerability to extreme events will increase

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• Consequently, comprehensive and holistic risk and vulnerability reduction strategies should be a core part of adaptation to weather-related extreme events.

• link the expertise in the disaster risk reduction community with the knowledge of the climate change adaptation community in order to promote resilience and to reduce due to the adverse effects of climate change.

• Reducing vulnerability to today’s climate through disaster risk reduction is a central approach to build adaptive capacity  

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UNFCCC discussion on loss and damage

Focus on mitigation and compensation of loss and damage (1990s to early 2000s).

• was marked by an emphasis on mitigation – the collective reduction of greenhouse gas emissions linked to changes in global temperature increases (creation of KP)

• States harmed by loss and damage related to climate change claimed compensation to rehabilitate their societies

• Enforcement of polluter pays principle

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A range of issues related to loss and damage – including: impacts of extreme weather-related natural disasters (floods, storms, drought, hail, etc.),

• human migration and displacement,

However, avoidance was the only acceptable approach, and some Parties (least developed countries, AOSIS, and other vulnerable countries) championed the 1.5 degree Celsius goal.

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Adaptation & solutions to managing loss & damage (Mid-2000s to 2011

• With the publication of the IPCC 4th Assessment Report in 2007, there were a lot of relevant findings.

• Accordingly it was necessary to discuss adaptation and issues around negative impacts of climatic change on human society

• This realization contributed to discussions about the need for adaptation finance, and activities that would help countries to adapt, and to manage loss and damage.

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• The Bali Action Plan contained an entire section about risk management and loss and damage associated with climate change. Following Bali the developing countries supported the AOSIS proposal for a mechanism for risk reduction, management and sharing to be established, that has the following components: 

• (a) risk management and prevention component to promote risk assessment and risk management tools and strategies at all levels,

• (b) insurance component to address climate-related extreme weather events,

• (c) rehabilitation and compensation component

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• Bali created the Ad Hoc Working Group on Long-Term Cooperative Action (AWG-LCA), and the issue of loss and damage was assigned to adaptation discussions from that time onwards

• a subsequent draft negotiating texts included several key references to risk reduction and specific tools like insurance

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• In Cancun: The COP decided to established the SBI Work Program on loss and damage (Decision 1/CP.16 )

• It has been suggested that SBI make recommendations on loss and damage to the COP for its consideration at its 18th session, as well as to strengthen international cooperation and expertise to understand and reduce loss and damage associated with the adverse effects of climate change, including impacts related to extreme weather events and slow onset events.

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Implications for SBI Work Program Africa region

• Africa is the hardest hit continent by climate change and has the weakest coping capacity, resources help Africa manage disaster risk and adaptation to climate change are limited and segmented

• The new SBI work programme stands as a good opportunity for strengthen resilience of vulnerable and poor communities in Africa. That could be facilited through a combination of improved resource management, microcredit and insurance.

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• To protect themselves against adverse effects of climate variability, the farmers in coping strategies, such as : income diversification, crop diversification, livestock holdings, crop storage and informal credits (inadequate)

• Insurance (e.g. drought insurance) is somehow found popular in some part of Africa.

• Insurance has been described as a way to mitigate the adverse events, by providing an indemnity to farmers in dry years (covering the risk of climatically-induced crop failure)

• Insurance has the potential to play an important role in disaster risk reduction and climate change adaptation in Africa

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• Insurance based on a weather index which is used as a proxy for crop yield is an emerging alternative for traditional agricultural insurance

• The farmer, in a given geographic area, pays an insurance premium every year, and receives an indemnity if the weather index of this area falls (model from Burkina Faso)

• There are some good examples for the use of micro-insurance for helping climate change vulnerable communities in different parts of the continent.

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Some African examples

• In the Horn of Africa (Ethiopia) a Micro-Ensure project called the Horn of Africa Risk Transfer for Adaptation (HARITA) is helping the farmers to get access to loans which will be used to purchase farm inputs.

• The farmers receive agricultural extension services including securing better market access.

• The Micro-Ensure also provide Weather Index Insurance to cover the farmers in the event of crop failure due to drought

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• In Malawi Micro-ensure provide protection against crop failure caused by drought or excess rain and enabled farmers to access credit in order to purchase quality seeds and fertilisers in order to maximise output

• By linking farms to local weather stations and introducing an automatic payout process farmers were not required to file a claim or go through an expensive loss verification process in the event of crop failure

• Following a successful pilot scheme Weather Index Crop Insurance was extended to cover farmers across Africa in Tanzania and Rwanda.

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• In north Kenya (Marsabit region) an insurance program was launched which uses index-based livestock insurance.

• subscribers in the pilot plan pay a premium when they sign up based on the value of the insured livestock and receive an indemnity payment if they experience loss beyond a certain level during the covered time period

• It uses an index based on satellite images showing the amount of available vegetation to estimate the aggregate loss in the region (instead of using inspectors)

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Policy & practice: Tools to address loss & damage at different levels

Assess and characterize exposure to loss and damage• One of the basic requirements for effective management and

reduction of loss and damage is risk assessment and understanding what is exposed to loss and damage?

• Exposure could be: assets like man-made, natural and social

• SBI work programme on loss and damage will help countries understand what tools are needed to help Parties characterize exposure (e.g. risk assessment, mapping, typologies of assets exposed to loss and damage) through rapid-onset events, or through slower-onset foreseeable events related to climate change

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Range of possible instruments

Variety of tools are available to help vulnerable countries address exposure to loss and damage related to medium and macro level risks such as:

• Pre-disaster preparedness

• Risk reduction measures

• Emergency response measures

• Post-disaster rehabilitation measures

It would be useful for these tools to be discussed in the SBI Work Program on Loss and Damage. In order to address lessons learned, good practice, challenges, analysis of relevance of various instruments in the context of adaptation, etc.

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Options for implementation of activities to address loss and damage

• This could explore alternative combinations of elements needed for implementation options would look like, depending on different combinations of issues such as Party needs, institutional arrangements/ operational entity, governance considerations, alternative financial arrangements, etc.

• Implementation options should consider placing the avoidance and reduction of loss and damage as a leading priority.

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Way forward

A useful outcome for the SBI Work Program in Durban would be to increase level of understanding about risk management and loss and damage

• Risk management workshop in Lima, Peru

• Build capacity of delegates to feel comfortable (technically) in talking about loss and damage issues

• Set achievable milestones at Durban for SB 36, SB37 (COP18) and beyond