3 June 2023
Non-Economic Loss and Damage in Fiji (Pacific)
How is loss and damage impacting people's lives?
Pacific Island countries and communities are among the most vulnerable in the world to the impacts of human-induced climate change and are increasingly facing loss and damage inflicted on their economies, livelihoods and cultures by the climate crisis. Loss and damage (L&D) generally refer to the permanent loss or irreparable damages caused by the impacts of climate change on human societies and their natural environments, that go beyond the adaptive capacity of countries and communities. The impacts of climate change in the Pacific are manifesting through both slow-onset events as well as extreme weather events. Examples of slow-onset events in the Pacific Islands are the gradual loss of biodiversity, land and forest degradation, rising temperatures, ocean acidification, sea level rise, and salinization. Extreme weather events unfold more suddenly and unpredictably and can manifest as tropical cyclones, floods, droughts, heat waves, and storm surges. With the gradual warming of the planet, these extreme events are expected to increase in frequency and intensity. This means that Pacific Island countries will continue to grapple with economic L&D such as damages and costs of repair to infrastructure and the loss of incomes and revenue from destroyed agricultural crops due to saltwater inundation, cyclones and floods[1]. The same events are causing non-economic L&D such as emotional trauma after extreme weather events as well as the social and cultural implications of community displacement due to climate impacts on their lands.
Failing to act to address and put an end to the causes of human-induced climate change will ensure the worsening of extreme weather events – which disproportionately afflict Pacific Island nations. This is especially true for vulnerable groups, such as women, children, LGBTQI[2] communities and people with disabilities within our countries. Emergency humanitarian action, including financial aid towards disaster recovery from the international community, cannot replace large-scale mitigation or long-term financial planning for the inevitable loss and damage that Pacific Islands will face. Nor can Pacific peoples be expected to continue to adapt to and recover from the escalating impacts of climate change at their own cost.
Case study from Fiji
In less than a decade, Fiji has experienced several extremely destructive cyclones, causing loss and damage to infrastructure, disrupting livelihoods, threatening food and water security, and exacerbating social issues such as poverty, gender-based violence and discrimination.
20 February 2016, TC Winston, a Category 5 tropical cyclone struck the shores of Fiji and placed the country under a State of Natural Disaster for 2 months. 540,414 people (62% of the population) were impacted by the damage and destruction of the cyclone; 44 human lives were lost; 40.000 people were in need of immediate assistance; Approximately 80 % of the population lost power; 495 schools, 88 health clinics and medical facilities were destroyed or damaged[3]; Livelihoods of 60 % of the population were compromised due to destruction of crops; By end of April 2016, an estimated 31,200 houses severely damaged or destroyed[4].
TC Winston caused an estimated FJD 2 billion dollars in damage, approximately 25 per cent of Fiji`s GDP in 2015. This further exacerbated the country`s vulnerability to the combined extreme and slow onset events caused by climate change which cost approximately 2.5 % of the country`s GDP each year[5].
The road to recovery after TC Winston would be gradual and stretch over the next few years, and the process would not look the same for communities across the country. While the Government mobilized various channels in the aftermath of TC Winston to make available cash, food and building materials for people to survive and recover, certain communities reported having received less assistance than others; some still waiting for financial or material assistance to rebuild in November 2016, and finding that they had to rely entirely on their own efforts and resources.
8 April 2020, TC Harold struck Fiji as a Category 4 cyclone and caused damages to crops and livestock of approximately F$ 29 million[6]. The homes and livelihoods of more than 180,000 people were affected; 917 homes across the nation were entirely destroyed, and 2,629 were severely damaged. The agricultural sector was critically impacted, and there was severe damage to infrastructure, 59 schools and a number of health centres across the country. Fiji suffered agricultural damages for more than FJD 27 million in agricultural damages, and an estimated FJD 66 million in damages to infrastructure including roads, power lines and jetties[7]. The Government of Fiji conducted a Detailed Damage Assessment in April 2020, estimating the total cost of the damages caused by Tropical Cyclone Harold at FJD 100 million.
In December 2020 and January 2021, Fiji was struck by TC Yasa (Category 5) and TC Ana (Category 2), respectively. TC Yasa had a severe impact on people's lives, which was only exacerbated by TC Ana. The storm caused widespread damage to infrastructure including roads and bridges, 90 school buildings and 25 health facilities; people experienced power outages across the country; approximately 97,000 people across the country were affected; 24,000 people took shelter in evacuation centres; health concerns on top of COVID-19 included increased risk of leptospirosis, typhoid, dengue and diarrhoea due to poor access to clean and sufficient water. Across Fiji`s second largest island Vanua Levu, 100% of households lost access to food crops[8], with nearly 90% of Fiji`s main cash crop, sugarcane crops, severely damaged. In 2020 36.6k people were displaced in Fiji[9], and an estimated 8,000 homes were damaged or destroyed[10]. TC Yasa caused USD 250 million worth of damages, largely to the agricultural sector.
Both TC Yasa and Ana took place during the COVID-19 Pandemic which saw Small Island Developing States (SIDS) once again disproportionately impacted by the global decline in international travel, commodity prices as well as the overall disruptions in worldwide trade and supply chains. Fiji’s GDP reduction in 2020 was estimated at 20% as a result of the pandemic. Fiji’s COVID-19 restrictions meant that the Fiji Red Cross Society (FRCS) TC Yasa/Ana operation was effectively suspended from mid-April until mid-September with the inability to travel across contaminated zones. Significant supply chain issues were also faced in accessing critical WASH materials during the pandemic period.
The impact of Cyclone Yasa on people's lives was severe. The storm caused widespread flooding, landslides, and power outages across the country. The significant health concerns, on top of COVID-19, included increased risk of leptospirosis, typhoid, dengue, and diarrhoea due to poor water access and standing water.
Unequal burden of economic loss and damage and recovery post-disaster (Pacific).
Up to 9 months after TC Winston villagers in some areas reported still not having received the promised/expected construction materials or aid from Government to repair or feed their families[11]. Non-indigenous communities reported not receiving equal amounts of food supply as indigenous communities, and also lacking the socio-cultural practices that indigenous communities have to give each other support where Government support was lacking.
In addition, there is gender disparity in financial recovery. Because of gender norms in Fiji, women often rely on subsistence livelihoods, and find it challenging to pursue paid work or access loans (which might require assets or collateral they do not have)[12]. After a cyclone, they are likely to be bound to the household and be responsible for feeding and providing care to their families and homes as well as providing for elderly and disabled people in their communities[13]. Men are found to be more likely to migrate away from their households for work or access to alternative fishing grounds or farms to feed their families to cope with financial pressures post-disaster, which might add pressure to the responsibility of women left in the community.
Why do we need a loss and damage fund?
Climate finance has so far been focused on funding adaptive measures such as building seawalls and mitigative measures like shifting to renewable energy, rather than loss and damage[14].
The provision of climate finance from some international partners after TC Winston has come in the form of loans, placing Pacific SIDS (PSIDS) in deeper national debts and further out of reach of achieving the Sustainable Development Goals.
The need also arises from the recognition that despite mitigation and adaptation efforts, some adverse impacts of climate change are inevitable. L&D refers to the irreversible harm caused by climate-related events such as sea-level rise, extreme weather events, and slow-onset events like desertification and ocean acidification. These impacts can have severe consequences on vulnerable communities and countries, particularly those with limited resources and capacity to respond effectively.
Loss and Damage fund is necessary, for the following reasons:
The costs will add up. The Global Assessment Report on Disaster Risk Reduction (2022) states that the reality of disasters is not in line with the prevailing perceptions of risk which are “optimism, underestimation and invincibility”. The report warns of a projected increase in disasters, as a whole, from 400 in 2015 to 560 per year by 2030. Whilst disasters are claiming fewer lives annually thanks to greater resilience and early warning systems, they are costing more and increasing poverty.: Climate change disproportionately affects developing countries that have contributed the least to greenhouse gas emissions but are more vulnerable due to factors such as poverty, limited infrastructure, and geographic location. A Loss and Damage fund helps address the injustice by providing financial support to these countries to cope with the damages and losses incurred.
It will erode development gains. The L&D in one region will have carryover effects on others. As a country experiences disruptions with increasing severity, business activities will be impacted with the risk of stranded assets, and reduced economic output that may sometimes take years to rebuild. The global and regional customers, suppliers, and trading partners of disrupted businesses will also be impacted by spill-over effects causing shocks throughout the global economy.
Uninsurable Losses Some climate-related impacts may be difficult or impossible to insure against due to their nature and scale. For instance, the loss of lives, cultural heritage, or unique ecosystems cannot be adequately compensated through traditional insurance mechanisms. A dedicated fund can provide assistance in such cases.
Climate-Induced Displacement Climate change can lead to forced migration and displacement of people due to the loss of habitable land, increased vulnerability to natural disasters, and other environmental factors. The L&D fund can help support the relocation, rehabilitation, and adaptation needs of displaced communities.
Enhancing Resilience The L&D fund can finance measures to enhance the resilience of vulnerable communities and countries. This includes investing in early warning systems, infrastructure upgrades, disaster risk reduction, and capacity-building initiatives that enable them to better respond to and recover from climate-related impacts.
Filling Financial Gaps Existing climate finance mechanisms, such as the Green Climate Fund, primarily focus on mitigation and adaptation. However, these funds may not be sufficient to cover the costs associated with L&D. A dedicated Loss and Damage fund can fill the financial gaps and provide additional resources specifically allocated for addressing the irreparable losses and damages.
Examples
After TC Yasa, the Fijian Government received assistance from various international partners, including the United Nations Development Programme (Grant, USD 50,000[15]), the European Union (humanitarian funding, FJD 2 mn[16]), the Australian Government (humanitarian relief AUD 4.5 million[17]), the NZ Government (humanitarian funding, NZD 2.5 million[18]), the ADB (Grant FJD 2.1 million)[19], and JICA (loan drawdown, FJD 55 mn[20]) and more. This funding was provided through various instruments, including Prevention Web 2020
Towards recovery from TC Harold, Fiji received a relief grant from the Asia Development Bank of FJD 900.000[21], loans of nearly FJD 45 million from the Japanese International Cooperation Agency[22], a USD 1 million allocation from the United Nations Central Emergency Response Fund (CERF) as well as relief supplies such as shelter (tents and tarpaulins), health and kitchen kits, solar lanterns and more[23].
In the aftermath of TC Winston, the Government of Fiji relied heavily on financial and humanitarian aid from international partners such as Australia, New Zealand, the European Union and the private sector – who along with other donors pledged approximately FJD 152 million (how much of that was loans?). Fiji Government with the United Nations further sought an emergency humanitarian “Flash” appeal for USD 38.6 million for victims’ relief support[24]. In June 2016, the World Bank committed a US$ 50 million loan to the Government of Fiji for the long-term recovery from TC Winston[25].
At the household level, one of the various mechanisms through which the Fiji Government addressed the urgent need to provide funds to citizens after TC Winston was to allow members of the Fiji National Provident Fund (FNPF), Fiji`s only pension fund, to make withdrawals of FJD 1000-5000. Over 9000 members withdrew money from their pensions in the first two months after Winston, in total seeing a withdrawal from the FNPF of FJD 275.5 million. These withdrawals were mainly made by citizens not covered by social security schemes like the Poverty Benefit Scheme (PBS), top-up transfers which the Government increased threefold of regular monthly payments to poor and near-poor households during the first month after the cyclone. Early transfers and withdrawals were mainly spent on essential household items like food (31.1 %), materials to repair houses (21.6 %) and clothing and school supplies (14.9 %)[26]. A similar FNPF programme was offered after both TC Harold[27] and TC Yasa[28], allowing in both latter cases members of FNPF to make withdrawals of up to FJD 2000.
Pacific Island Countries are already facing enormous debt burdens and are vulnerable to economic shocks caused by climate change and global events like the COVID-19 pandemic, which together serve to severely exacerbate their debt situation. Governments being forced to accept loans as a form of aid for disaster recovery demonstrates how the climate debt burden is being shifted onto PSIDS, which already have high debt-to-GDP ratios (debt makes up 81% of Fiji`s GDP)[29].
Climate finance should be provided as grants, not loans; the payment of disaster recovery by major polluters should be re-defined as a down payment on their own climate debts to PSIDS for causing massive, long-term loss and damage. Furthermore, while the Government opening for withdrawals from pension funds was an efficient way to provide immediate disaster response, it illustrates how the financial burden of climate-induced loss and damage is further shifted from Government to communities and households.
While climate change affects the whole of the Pacific Island region, the poorest and most vulnerable island communities are facing loss and damage at a far higher rate than others. As such L&D worsens already existing inequalities within our societies. The establishment of a global, long-term funding arrangement to address the costs of L&D and enhance the adaptive capacity of Pacific economies and peoples is a matter of survival.
Non-economic loss and damage: extreme weather events
The non-economic loss and damages from natural disasters are difficult to measure and therefore often go under-reported, or unreported. As do the ways in which loss and damage are inflicted unequally on vulnerable groups such as women, homeless people, LGBTQI persons and sex workers…
For example, more attention should be placed on the critical need for trauma counselling in the aftermath of a tropical cyclone. UNOCHA estimated that as of April 2016, approximately 6000 people across Fiji were in need of psychological support. While communities had visits from counsellors, villagers reported further counselling needs[30] to begin a long and difficult recovery process from TC Winston that could be expected to take up to a decade[31]. How men and women manage the emotional stress and pressure caused by an extreme event will often differ. Research shows that women in Fiji are more likely to share experiences with each other and ask for counselling support after a cyclone. Men, on the other hand, tend to choose other coping mechanisms. For example, they are more likely to turn to alcohol to process their emotions, which in some cases can contribute to increased gender-based violence. LGBTQI persons and sex workers are in some cases estranged from their families and communities, some experiencing homelessness, and therefore often lack access to information, safe shelter, and welfare options[32]. Teachers commonly reported that children remained visibly distressed by strong wind or heavy rain. They were worried that this would go unaddressed over time, despite support at the outset.[33]
Non-economic loss and damage can also come from the destruction of heritage and ancestral burial sites after a cyclone or flood, places to which people's identities are deeply rooted.
Loss and damage tied to slow onset events
The stressors of loss and damage after natural disasters land on top of already gradually accumulated loss and damage from slow onset climate events that can take a severe toll on a community's resilience and ability to effectively recover after extreme weather events…
To date, Fiji has relocated 6 communities, starting with Vunidogoloa in 2014, and has earmarked 42 villages for relocation in the coming years. The financial costs of community relocation cost USD 980,000[34]
While the economic loss and damage involved in community relocation are severe, it is important that we also consider the risk of non-economic loss and damage inherent in any community relocation process. Local languages, social relationships, cultural heritage, traditional knowledge and practices and ways of life underpin people`s identities and belonging in Fiji, and they are invariably attached to customary lands. Customary attachment to land is so important in fact, that for the sake of cultural obligation to their land, the coastal community of Vunisavisavi village on Vanua Levu has repeatedly refused to relocate despite strong recommendations by Fiji Government to do so, choosing to take the physical risk to their safety and livelihoods over the risk of losing their cultural connections[35]. The village relies on fishing and farming as their main source of income but suffers from damages to their land from flooding and saltwater inundation due to king tides.
The sociocultural aspects to place attachment in Fiji are pillars of resilience on which communities rely to recover from the physical and emotional - as well as financial - shocks of a disaster or other major event like a pandemic. As such, the long-term loss and damage of a relocated community must be measured not only in monetary terms, and the deeper complexities of loss and damage not be underestimated.
How might the loss and damage fund work?
The design of the Loss and Damage Fund – its mandate/functions, its funding sources, administration and governance structure, and disbursement modalities – must be guided by a set of principles. These principles can derive from various sources – the (UNFCCC) Convention, the Paris Agreement, and the Rio Declaration – but must be interpreted and adapted to address the realities of L&D. Importantly, the operationalization of these principles at global, national and subnational levels should be grounded in principles of climate justice and be guided by a human right approach.
Firstly, the mobilization of finance should be led by developed countries acting morally in response to loss and grief and with a view to building trust in climate cooperation which is threatened by mistrust, defiance, and unbalanced power dynamics. It should be guided by principles of international cooperation and solidarity; historical responsibility and the polluter pays principle.
Secondly, L&D Finance provided under the LD Fund needs to be new and additional, going beyond existing commitments of Official Development Assistance and to other types of climate finance (mitigation and adaptation). The current tracking and labelling limitations under the Paris Agreement Art. 9 reporting (which does not recognise L&D finance) must be addressed to allow for future L&D finance to be correctly classified, monitored and transparently accounted for.
Thirdly, L&D finance should be needs-based, with the amount of finance provided in line with the scale of needs on the ground. This is in contrast to the existing US$100 billion annual climate finance target, which was an arbitrary, politically set number not based on any formal assessment of climate finance needs. As such, the sources of funding must be:
adequate (correspond to L&D finance needs estimates);
predictable (come from reliable sources and with a regularity that allows for planning and for long-term restorative action);
precautionary (anticipate various levels of L&D at and above the 1.5- and 2-degree thresholds without funding activities that would impede the mitigation, adaptation and recovery processes of other communities).
In addition, in the context of the new quantitative climate finance goal must include L&D finance as a separate and additional sub-goal to be determined through the work programme.
Fourthly, the global mobilization and utilization of L&D finance should be locally driven, with subsidiarity (decision-making and implementation on the most local level possible) at the core. The history of L&D in the UNFCCC and its physical materialization teach us that it is first and foremost an issue led by communities and population groups most vulnerable to and disproportionately affected by climate change at the local/sub-national level – in particular from civil society and local governments from developing countries, including Small Island Developing States (SIDs) and LDCs, as well as women and other marginalized gender groups, the disabled and indigenous communities. As such, local-level ownership and gender- responsiveness must be guiding principles in the disbursement of funds by the L&D Fund, by making it a priority that the funding provided supports the needs and requirements of local beneficiaries in a people-centred, human-rights-based way that assists their rapid and sustainable recovery by strengthening their power of agency. To achieve a just and equal approach to loss and damage, it is crucial that civil society participation in the development of frameworks and practices, as they are the ones who work with and for local communities year-round – and are likely to catch defining aspects of vulnerability, resilience and recovery that a top-down approach might otherwise miss.
Fifthly, the majority of L&D finance provided should be public and grant-based, rather than provided as loans or in the form of other financial instruments (such as equities or guarantees). Loan-based finance, which currently makes up the majority of climate finance (OECD, 2020), has historically increased the debt burdens of recipient countries, threatening to reverse their development gains by reducing their fiscal space, thereby trapping them in a cycle of perpetuating vulnerability to climate impacts. Given that finance for L&D is not a favour to developing countries but rather restitution for developed countries’ historical emissions, grant-based finance would ensure alignment with climate justice (Carty & Zagema, 2020).
Finally, finance for L&D should be balanced and comprehensive. In addition to providing support for rapid-onset events in the aftermath of climate disasters, finance should also be available for continued recovery, rehabilitation and alternative livelihoods provision for communities facing slow-onset events. Funding should also be available for addressing non-economic losses and damages. Importantly, in contrast to humanitarian assistance, L&D finance should be iterative and enable and support longer-term recovery from climate impacts. As such, the conventional project-based model currently employed within much of climate finance is likely to be unsuitable for a significant portion of L&D finance provision, particularly rapid-onset events. Alternative models of finance dissemination should be developed that ensure finance reaches affected communities with urgency and purpose, with its utilization being locally driven, people-centred and gender-responsive.
Furthermore, the L&D Fund could work off triggers, with direct access to funds before an extreme event strikes, or as the State of Emergency (SOE) unfolds which could strengthen social protection etc. The fund could have mechanisms for direct cash transfers to impacted communities - empowering local actors and ensuring local capacity, needs, and contexts are respected.
How can we pay for loss and damage fairly?
It is crucial to recognize the historical responsibility of industrialized countries that have contributed significantly to the climate crisis through mass production and emissions of fossil fuels. The concept of climate debt should be rethought, and the focus should be on seeking equity by holding these countries accountable.
The establishment of an L&D Fund based on the polluter pays principle is essential. Payments from polluting countries should not be seen as an aid to less developed countries (LDCs) and small island developing states (SIDS), but rather as a down-payment on the debt incurred by causing climate-related L&D. The size of the debt should be calculated based on the estimated contribution to greenhouse gas (GHG) emissions and the respective capability of each country.
To ensure a fair and effective funding mechanism, it is important that the financing is new and additional to existing and planned development funding. It should also be precautionary and adequate, taking into account the needs and the best available scientific knowledge. The scale of funding required to address L&D should primarily be met by developed countries with high levels of emissions.
Several approaches that are unlikely to work in addressing L&D include insurance or a global shield, as well as relying on loans. These options do not adequately address the root causes of climate change or hold the responsible parties accountable.
A key aspect of a fair approach is making the polluters pay for the damages they have caused. The fossil fuel industry, which has profited from activities that have contributed to the climate crisis, should bear the financial responsibility. Currently, fossil fuel companies often pay little or no taxes and even receive government subsidies, which create perverse incentives. These incentives must be eliminated, and innovative global tax solutions should be explored. Alternative sources of finance can also be utilized to address L&D, such as redirecting fossil fuel subsidies, implementing reformed fossil fuel taxes, imposing a wealth tax, or introducing windfall profits taxes specifically targeting the fossil fuel industries. These measures can help generate the necessary funding to mitigate and adapt to the impacts of climate change and compensate for the losses and damages already experienced.
The establishment and shaping of the Loss and Damage Fund should involve active participation from civil society organizations. This will ensure that diverse perspectives and expertise are considered, leading to a more inclusive and effective fund. Consultation with impacted communities, especially women who are often disproportionately affected, should be an integral part of the decision-making process. This will ensure that the fund's interventions align with the specific needs and priorities of those directly affected by loss and damage.
The fund should outline different needs and approaches for addressing loss and damage resulting from extreme events, slow-onset processes, and other climate-related impacts. Each case may require different timeframes, response mechanisms, and resources to effectively address the specific challenges. The Loss and Damage Fund should provide direct access to affected communities, enabling them to seek support and resources independently. Special windows should be established to streamline the process for communities affected by extreme events or facing slow-onset impacts. Efforts should be made to ensure that funding for loss and damage reaches communities directly. This can be achieved by placing communities at the heart of climate finance, involving them in decision-making processes and addressing administrative barriers that may hinder their access to funds.
The fund should consider regional allocation strategies to ensure equitable distribution of resources and support. Additionally, it is crucial to provide assistance to specific initiatives such as the Pacific Resilience Facility, which focuses on building resilience in vulnerable regions.
Lessons should be learned from other funds to overcome administrative challenges. Streamlined procedures, simplified application processes, and transparent accountability mechanisms can help overcome bureaucratic obstacles and ensure efficient fund utilization.
The Loss and Damage Fund should prioritize support for small countries and vulnerable communities that are disproportionately affected by climate change. Adequate resources and capacity-building measures should be provided to enable them to access and utilize the fund effectively.
References
[1] Loss and damage: A moral imperative to act | United Nations [2] Lesbian, Gay, Bisexual, Transgender, Queer and Intersex. [3] Mansur et al 2018 [4] Nakamura and Kanemasu 2020 [5] World Bank 2022 [6] OCHA 2020 [7] DFAT, Australian Government: Tropical Cyclone Harold [8] FairTrade 2021 [9] IDMC: Country Profile, Fiji [10] Refugees International 2021 [11] Nakamura and Kanemasu 2020 [12] Dudley et al 2023 [13] CARE International 2018 [14] Caritas Oceania 2022 [15] UNDP 2021 [16] EU 2020 [17] DFAT: Crisis Hub [18] OCHA 2021 [19] ADB 2021 [20] Fiji Government 2021 [21] Asia Development Bank, 2020 [22] [23] DFAT: TC Harold [24] Government of Fiji 2016 [25] World Bank 2016 [26] Mansur et al 2018 [27] FNFP 2020: TC Harold [28] FNFP 2020: TC Yasa [29] Caritas Oceania 2022 [30] The Fiji Times 2016 [31] Nakamura and Kanemasu 2020 [32] OpenGlobalRights: LGBTIQ+ Resilience in Fiji [33] DFAT.gov.au [34] (Charan, et al., 2017) [35] Singh et al 2017
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