Imagine you inherit a one-of-a-kind china vase from your great-grandmother. It’s a priceless family treasure, and there’s none other like it in the world. You take your responsibility for this heirloom very seriously by building a protective display case for it in your home. You also install burglar and fire alarms, and take out an expensive insurance policy that will pay you $10 million if something happens to the vase. But one day, an unstable tree in your neighbor’s yard falls on your house, smashing your roof, and shattering the precious vase. You’re heartbroken, and your cousins are mad – they loved your great-grandmother’s vase, too, and they think you should take your neighbor to court. Still, even if your neighbor is found at fault and justice is done, your family has suffered a loss. The vase was a priceless, piece of your heritage. You did everything you could to protect it, and while you have funds to buy a new heirloom that someday your great-grandchildren may treasure, the vase cannot be replaced.

This imaginary scenario may seem out of place for a climate-focused blog. Clearly, the loss of a vase is frivolous compared to the threats posed by loss of crop varieties, the submergence of islands in sea water, and the other potentially disastrous effects of climate change on vulnerable people. But we draw this analogy to illustrate some of the challenges that international representatives will contend with when they meet in Warsaw next week.

The COP 19 negotiating agenda calls for parties to establish institutional arrangements to address “loss and damage associated with the impacts of climate change in developing countries that are particularly vulnerable to the adverse effects of climate change.” These negotiations could be contentious and emotional—and not surprisingly, given what is at stake. Losses and damages under scenarios well below four degrees of warming could, over time, include the submergence of mega-cities, the collapse of major ecosystems, and the loss of entire island nations. But the loss and damage (L&D) negotiations need to succeed for COP 19 to succeed—and for the global community to get on track to achieve an ambitious, effective, and equitable climate change agreement in 2015.

3 Key Functions for Loss and Damage

The media have focused primarily on the question of whether dealing with L&D requires setting up a compensation regime under the United Nations Framework Convention on Climate Change (UNFCCC). But just as with the vase analogy, many other issues come into play.

Ultimately, successful negotiations in Warsaw hinge on understanding L&D as a diverse and evolving set of activities, not as a single compensation question. In this context, L&D institutional arrangements should include the following key functions:

1) Institutional arrangements for L&D will need to take responsibility for systematic identification of categories of harms within their remit.

  • Identify Potential Harms: To lay the foundation for concrete action on L&D, institutional arrangements will need to identify what harms—the specific types of loss and damage—need to be addressed, as well as the timeframe on which they are likely to occur. This identification of harms is a job for the institutional arrangements, once established—not for the parties negotiating in Warsaw. The idea is to get an understanding of harms in order to provide the basis for designing effective mechanisms to address them, similar to the ways in which humanitarian response institutions consider human need as their starting point for effective responses.

  • Continue to Determine New Harms: While impacts have already started to occur, the harms associated with climate change may shift over the years as surprises emerge and science provides better understanding of how climate change affects communities. Therefore, identifying harms must be an ongoing function based on the strongest possible evidence, including the International Panel on Climate Change(IPCC), the biennial Global Assessment Report on Disaster Risk Reduction, and the UNFCCC’s Loss & Damage Work Program, among others. Non-economic losses and harms due to slow-onset climatic events will both need special attention, as will the interplay among different impacts and devastating harms caused by repeated exposure to extreme events.

2) Any institutional arrangements established need to enable the full diversity of possible responses to loss and damage, including for loss and damage beyond the scope of adaptation. They should be designed to enable global collective action to support at least three types of activities:

  • Prevention of L&D: Many needed activities for preventing loss and damage – disaster risk reduction activities, adaptive capacity investments, climate-smart development pathways – are fairly well understood, but are far from fully implemented in many developing countries. Institutional arrangements for L&D must support broad application of preventative activities and encourage effective action without duplicating ongoing adaptation initiatives or efforts by humanitarian institutions.

  • Recovery and Rehabilitation from L&D: This category includes important activities like emergency response, safety net systems, and insurance markets, which all help people recover rapidly from L&D and return to normal life. The humanitarian community has experience with recovery and rehabilitation, but as with prevention, also has significant implementation gaps. Moreover, innovation is needed to ensure recovery and rehabilitation efforts support long-term L&D prevention. As the climate changes, “building back better” must become standard practice after disasters.

  • Solidarity in the Face of Unrecoverable L&D: As in the broken vase analogy, prevention efforts sometimes fail, and losses can be unrecoverable or beyond the scope of adaptation. Given current greenhouse gas emissions trends, climate change is very likely to create more unrecoverable losses than in the past, including the collapse of entire ecosystems and large land areas becoming uninhabitable. Early examples of solidarity in the face of such losses are emerging in activities like New York’s above-market buy-out of homeowners in the areas hit hardest by Hurricane Sandy and the sale of land by Fiji to lower-lying Kiribati. However, just as the type and extent of unrecoverable losses will evolve with climate change, approaches to solidarity in the face of unrecoverable L&D will also need to evolve over time. Enabling this evolution of solidarity will be important for any institutional arrangements established in Warsaw.

3) Institutional arrangements for L&D must function effectively both over the next few years, and over the coming decades. This requires a focus on two different sets of institutional links and gaps:

  • In the Near-Term: Over the next few years, effective L&D means linking explicitly with relevant institutional arrangements for adaptation within the UNFCCC and disaster-risk reduction under the Hyogo Framework, as well as sustainable development agendas at national and international levels. The UNFCCC, Hyogo Framework, and post-2015 development agenda (following the Millennium Development Goals) should all hit major negotiation milestones in 2015. This creates important opportunities to ensure coordination and avoid duplication, especially because existing institutions may not yet be prepared to deal with slow-onset events and repeated exposure to extremes.

  • In the Long-Term: Over multiple decades, the treatment of L&D needs to be able to evolve in ways that best address emerging harms associated with climate change. One option to support this type of evolution would be institutional arrangements that enable action based on periodic stock-taking, such as a ministerial-level L&D roundtable linked to UNISDR’s biennial Global Platform, or a five-yearly, high-level L&D activity linked to the IPCC. Institutional arrangements should also consider how to construct funding modalities that function over long-term time horizons, such as a fund supported by long-term investment instruments like bonds.

The IPCC recently reiterated that we have just a short window of time left to respond to climate change as a global community. As extreme weather climate events become the “new normal,” our international leaders must make the right choices to ensure we can respond to these increasingly costly and damaging impacts. Collective action and agreement on dealing with L&D is key to this challenge.