Loss and Damage Funding and Vanuatu’s ICJ Initiative: Parallel Processes Relevant to Climate Obligations under International Law   

The outcomes of COP 27 have been described as disappointing; however, the negotiations in Sharm el-Sheikh did give us a reason to remain optimistic: Parties established a fund for assisting particularly vulnerable developing countries in responding to loss and damage associated with the adverse effects of climate change. Simultaneously, a group of 18 countries led by Vanuatu in New York was engaged in drafting a United Nations General Assembly (UNGA) resolution requesting an advisory opinion from the International Court of Justice (ICJ). Should this draft resolution be adopted, we would shortly witness two parallel processes highly relevant to the application of international law in determining State obligations and legal consequences relating to the impacts of climate change.

Funding for loss and damage

The fund created during COP 27 addresses the fact that climate change impacts cause loss and damage to vulnerable developing countries, which need support to address them. For instance, economic losses due to the recent floods in Pakistan were estimated at approximately 30 billion dollars, a significant sum for a lower middle-income country like Pakistan. It is important to note that certain fundamental aspects of the fund –which will ultimately determine its success or failure– still need to be defined, including funding sources, beneficiaries, conditions, and governance.

The first step to advance these definitions is nominating the 24 members of the Transitional Committee, whose main task will be making recommendations to operationalize funding for loss and damage. To this end, the Committee must identify funding sources, explore options to expand them, and ensure coordination and complementarity with existing funding arrangements. In addition, it will consider the institutions currently engaged in financing for loss and damage and how coherence, coordination and synergy between them can be improved, as well as the existing gaps concerning the speed, eligibility, adequacy and access to finance, among other relevant aspects.

The loss and damage fund is undoubtedly an encouraging result of COP 27. However, there is still much work – and arduous negotiations – ahead to fulfill its objective in a way that effectively meets the needs of developing countries particularly vulnerable to the adverse effects of climate change.

Vanuatu’s ICJ Initiative

From a legal perspective, loss and damage relates, inter alia, to the right of access to justice, establishing responsibilities, and reparation mechanisms, including compensation. From the perspective of climate politics, however, loss and damage caused by climate change impacts is not associated with reparations to the affected countries and people. This is mainly because developed countries insist that negotiations on loss and damage do not involve liability or compensation. An international judicial discussion on the rights and obligations of States relating to climate change impacts could be opened thanks to the initiative of the small island state Vanuatu to request an advisory opinion from the ICJ.  

Indeed, in parallel to the negotiations in Sharm el-Sheikh, 18 countries led by Vanuatu were engaged in drafting a UNGA resolution requesting said advisory opinion. The objective is for the ICJ to clarify, under international law, 1) the obligations of States to ensure the protection of the climate system and other parts of the environment for present and future generations; 2) the legal consequences under these obligations for States which, by their acts and omissions, have caused significant harm to the climate system and other parts of the environment, with respect to: a) small island developing States and others States which are injured or specially affected by or are particularly vulnerable to the adverse effects of climate change; and b) peoples and individuals of the present and future generations affected by the adverse effects of climate change.  

The draft resolution was sent to all UN member states on 29 November 2022. A consultation process will follow leading to a UNGA vote in early 2023. To request the advisory opinion, it is required to obtain a simple majority of the members present and voting (50% plus one). To date, of the 193 UN member states, more than 80 have expressed their support.

The existence of a parallel process seeking to involve the ICJ to clarify rights and obligations in relation to the climate system, as well as legal consequences in case of significant harm, could have influenced the decision of developed countries to propose (EU) and support creating a fund to respond to loss and damage. Should the draft resolution be adopted, the ICJ proceedings would be expected to take place over at least the next two years (2023–2024). If so, and considering that the Transitional Committee established in Sharm el-Sheikh will begin to operate in early 2023, we would be witnesses to two parallel processes relevant to determining State obligations and legal consequences relating to climate change impacts under international law, and to key considerations such as climate justice and human rights.

Featured image credit: Elena Mozhvilo