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Explainer: What is Loss and Damage?

The unavoidable and irreversible impacts of climate change are known as 'Loss and Damage'

Burre, from Dassench in the South Omo Zone in Southern Ethiopia, has experienced several years of drought. Photo: Trócaire Burre, from Dassench in the South Omo Zone in Southern Ethiopia, has experienced several years of drought. Photo: Trócaire

2022 was a year of unprecedented climate disasters.

Many regions of the world experienced record-breaking temperatures, wildfires, droughts, and storms. From the floods in Pakistan – which left a third of the country under water – to the worst drought in East Africa in 40 years, developing countries that have contributed least to the climate crisis are facing its worst consequences.

At the same time, longer-term climate impacts such as sea-level rise, glacial retreat or desertification are putting natural and human ecosystems at risk of irreversible collapse, forcing displacement and threatening to make parts of the planet uninhabitable.

A recent scientific assessment found that six out of nine “planetary boundaries” have been broken because of human-caused pollution and destruction of the natural world and warned that the planet is “well outside the safe operating space for humanity.”

Floods in Pakistan in August 2022. Photo: Caritas/Trócaire Floods in Pakistan in August 2022. Photo: Caritas/Trócaire

What is Loss and Damage?

Decades of rampant extraction and burning of fossil fuels by the world’s wealthiest countries, as well as failure to take the action necessary to reduce emissions and build resilience to climate change, have driven increasingly frequent and catastrophic climate disasters.

These unavoidable and irreversible impacts – referred to as Loss and Damage – have had a disproportionate impact on the most vulnerable countries and communities in the world. These costs have been left to fall heavily on the shoulders of the world’s poorest, who are picking up the tab for a problem they overwhelmingly did not create.

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The climate crisis is a crisis of inequality, and its scale is staggering. The poorest half of the world, nearly 4 billion people, are responsible for just 12% of all greenhouse gas emissions. It is estimated that Sub-Saharan African countries will have to take on almost $1 trillion in debt over the next ten years, unless long-promised financial support is finally delivered at scale.

The most complete economic and climate modelling suggests that loss and damage financing needs in developing countries could reach US$290-580 billion by 2030, US$551–1,016 billion in 2040 and US$1,132– 1,741 billion in 2050.

Kula Halake, 58, an agro-pastoralist from Mora Mora village in Borena Zone, Ethiopia stands next to one of her dead cows during Ethiopia's 2022 drought. Photo: Barnaby Jaco Skinner/Trócaire. Kula Halake, 58, an agro-pastoralist from Mora Mora village in Borena Zone, Ethiopia stands next to one of her dead cows during Ethiopia's 2022 drought. Photo: Barnaby Jaco Skinner/Trócaire.

Is there existing financial support?

In Copenhagen in 2009, and again in Paris in 2015, wealthy countries initially pledged to provide $100 billion per year in financial support to developing countries for climate action, in recognition of their greater responsibility for historic emissions and financial capacity. However, more than a decade later, this target has still not been met.

OECD data states that just $83bn was provided in 2020, while academic and civil society estimates suggest that the true value is less than a third of what has been reported.

Ireland has also fallen well short in making progress on this global goal, with our current contributions of €100 million per year just one-fifth of our fair share – which in 2019 Christian Aid Ireland & Trócaire estimated as being approximately €500m per year.

Crucially, this global climate finance target and the infrastructure built around it was limited to support for just two facets of climate action: emissions reductions (mitigation) and building resilience (adaptation). The failure of wealthy and high-polluting countries to provide the resources pledged has meant less investment in these areas, and ultimately more frequent and intense climate related impacts (loss and damage).

A climate protest in Dublin Photo: Trócaire A climate protest in Dublin Photo: Trócaire

What progress is being made?

Over the past three decades, developing countries, civil society organisations and activists have fought for loss and damage to be recognised as the so-called “third pillar” of climate action – already enshrined in the landmark UN Framework Convention on Climate Change (UNFCCC) but largely ignored and resisted by the world’s wealthiest states.

The historic agreement to finally establish a new Loss and Damage Fund (LDF) at COP27 is an acknowledgement that these impacts are happening, that those experiencing it are disproportionately poorer people in lower-income countries, and that rich countries must urgently provide new and additional finance to address it.

How will a Loss and Damage Fund work?

We estimate that Ireland’s “fair share” of this new loss and damage finance will be at least €1.5 billion per year by 2030. This figure is based on global climate and economic modelling of loss and damage needs, pathways to staying within the global target of 1.5 degrees of warming, and key factors including historic responsibility for climate change and current financial capability.

While the scale of finance required is significant, it is important to remember that governments spent $7 trillion on subsidies for the fossil fuel industry in 2022 alone.

The COP 27 agreement to set up the LDF also recognises that, given the significant level of funding required, revenue will likely also need to come from new and “innovative” sources. A number of proposals, both national and international, could ease the burden on domestic budgets – including better taxation of wealth and obscene supercharged corporate profits, contributions from fossil fuel producers, debt relief or progressive levies on shipping and aviation.

Along with a broad alliance of civil society organisations and developing countries, Christian Aid Ireland and Trócaire are calling for loss and damage funding to flow through a new, centralised LDF, anchored by the core elements of climate justice already enshrined in the 1992 UNFCCC and 2015 Paris Agreement.

Nkhulambe Health Centre Destroyed by Cyclone Freddy Photo: Trócaire Nkhulambe Health Centre Destroyed by Cyclone Freddy Photo: Trócaire

Cyclone Freddy, Malawi 2023

Estimated cost: US$507 million


In early March 2023, Malawi experienced one of the worst tropical cyclones on record. Cyclone Freddy led to extreme rainfall, flooding and mudslides, affecting Malawi’s Southern Highlands in particular. An estimated 2.25 million people were affected, including over 650,000 displaced, and over 1,000 people were killed. The cyclone caused extensive damage to transport, water and sanitation systems and other infrastructure, and to housing. It also caused extensive agricultural losses, worsening the already significant problem of food insecurity in Malawi.

Although climate change does not make cyclones more frequent, scientists have observed that climate change has increased the occurrence of more intense and destructive storms.

The direct losses and damage caused by Tropical Cyclone Freddy in Malawi are estimated at US$506.71 million. The cyclone caused an estimated US$347.2 million in physical damages, including destruction or damage to infrastructure ($178.04 million), transport ($110.83 million) and housing ($124.47 million).

Cyclone Freddy also caused an estimated US$159.4 million in economic losses. The largest share of these losses relates to the agriculture sector, with over US$55 million in lost crops.

According to Malawi’s Post-Disaster Needs Assessment, the total recovery needs for the physical damages and economic losses are estimated at $680.4 million.

This includes the estimated cost of rebuilding housing and infrastructure, as well as recovery interventions, such as supporting farmers to replant, use more resilient seeds and avoid cultivation on the most “marginal” lands, and rebuild more resilient irrigation systems.

The estimated recovery cost also includes estimates for implementing a new disaster recovery framework, ranging from early warning systems to a planning process for more resilient infrastructure, reflecting the fact that Malawi is extremely vulnerable to climate-related disasters.

It is important to stress that the above figures reflect only immediate post-disaster costs of Cyclone Freddy, and do not cover the full extent of the economic and non-economic loss and damages that Malawi is experiencing. The Government of Malawi estimates that the country loses an average of 1.7% of its GDP every year because of climate change-related disasters.

At the same time, rising temperatures (resulting in higher evaporation losses) and changes in rainfall patterns are slow- onset changes that pose a lasting challenge, given that Malawi is heavily dependent on rain- fed agriculture. The cumulative effects of climate change may also become a driver of migration in Malawi, which could imply relocation and support costs that are not taken into account by needs assessments after particular disasters.

For more information read Trócaire’s policy report “The Cost of Inaction”

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