October 27, 2022 9:45 AM EDT

Loss and damage, as historically defined in international climate treaties, refers to the permanent loss or repairable damage caused by climate change, including extreme weather events like hurricanes and heat waves as well as slow-onset events such as sea-level rise and desertification. At the onset, the term was just one item on a long list of climate issues that would have to be addressed. But as nations prepare to attend the COP27 climate summit, its importance is expanding in ways that could either cement in long-sought aspects of climate justice—in which big emitters pay vulnerable groups for the loss and damage they have incurred as a result of climate change—or shut down the climate discussions entirely.

What’s at stake

By 2030, climate change will cost developing countries an estimated $290 billion to $580 billion annually, and up to $1 trillion by 2050. The countries that have contributed the least to climate change, yet are most vulnerable to its impacts, want to hold big emitters responsible for their past excesses by forcing them to cover the costs of climate change.

Who is against

The U.S. and the E.U., historically the world’s biggest emitters, argue that agreeing to such terms would open them up to never-ending litigation. Instead, they say it’s enough to utilize existing finance mechanisms. Additional costs, they add, could be covered by humanitarian aid or private insurance schemes. But the $100 billion fund is approximately $17 billion short; much of it comes in the form of loans, not grants; and most of it has gone to investments in clean-energy sources, not the adaptation plans that are the primary concern of vulnerable countries. Furthermore, critics say, few insurers are likely to take on risk in countries already impacted by climate change. Developing countries and climate-justice activists want a new pot of money set aside solely for the purpose of paying for the impact of climate change.

Proposed alternatives

U.N. Secretary-General António Guterres describes the issue as a “fundamental question of climate justice, international solidarity, and trust” and says “polluters must pay.” If they won’t, he suggests other mechanisms, such as a windfall tax on the excess profits of oil-and-gas companies during the energy crisis that could be collected by nations and deposited into a global kitty. Some countries are calling for debt cancellation as a mechanism to alleviate the financial burdens of poorer countries, others for a worldwide system of carbon pricing to support a loss-and-damage fund.

Now or never

At last year’s climate conference in Glasgow, developing nations called for a discussion on loss and damage. It never happened, primarily because of strong opposition from the U.S. and the E.U. But with the mounting toll of climate disaster in vulnerable countries, from Pakistan to Somalia to small island nations of the Pacific, the pressure is growing.

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