Due to the absence of a resolution at COP26 and Egypt's commitment to focusing on financing for adaptation and loss and damage, the issue will be discussed this year.
The Center for Climate and Energy Solutions anticipates that discussions will centre on institutional arrangements for the Santiago Network for Loss and Damage, which focuses on providing technical assistance to developing countries to minimise loss and damage, and on refining the Glasgow Dialogue, a formal process developed in 2021 to bring countries together to discuss loss and damage funding.
In October 2022, the V20 group of finance ministers, representing 58 countries highly vulnerable to climate change, and the G-7 group of wealthy nations also reached an agreement on the Global Shield Against Climate Risks financial mechanism. The Global Shield focuses on providing risk insurance and rapid financial assistance to countries following natural disasters, but its role in international discussions is unclear. Some organisations are concerned that relying on insurance systems may overlook the poorest individuals and detract from the larger discussion of establishing a dedicated fund for loss and damage.
Two aspects of the reluctance of developed nations to formalise a loss and damage mechanism are the determination of which nations or communities are eligible for compensation and the limitations of such a mechanism.
What would a loss and damage eligibility threshold look like? Limiting countries or communities' ability to receive compensation for loss and damage on the basis of their current emissions or gross domestic product could become a problematic and convoluted procedure. The majority of experts advise determining eligibility based on climate vulnerability, but this can be challenging.
How will global leaders react?
In excess of a decade ago, developed nations pledged to provide $100 billion annually to developing nations for adaptation and mitigation. However, they have been slow to fulfil this commitment, and it does not cover the damages caused by the climate impacts that the world is currently experiencing.
Establishing a loss and damage mechanism is considered one means of redressing climate injustice on a global scale. On November 6-18, 2022, all eyes will be on Egypt to see how world leaders respond.