Compensating Small Island States for Losses and Damages from Climate Change

Author: Dr Jane Stanley

It is expected that loss and damages compensation will be a focus of discussion at COP27 in November 2022, particularly addressing the needs of small island developing states. It would be helpful if simple and practicable options could be developed and put forward for consideration and decision. The COP should then avoid delay and put a suite of measures in place right away, with possible subsequent work to be done in addressing the more problematic or contentious areas of loss and damage compensation.

  1. Compensation for irreversible damage and loss that has occurred or is occurring

In some areas there is already loss of land due to coastal erosion with a need to relocate and rebuild dwellings and other infrastructure. These costs can be directly assessed, or otherwise estimated by a formula based on average regional land and construction values.

  1. Compensation that addresses repair of damage done

Salt water intrusion into groundwater can be addressed through desalination of sea water plus soil bioremediation. A formula for water supply could be based on population, making allowance for all types of water use (including irrigating food gardens). Bioremediation of soils using biochar produced locally from coconut wastes should also be supported through funding for relevant equipment on each island. Mitigation of climate impacts on marine ecosystems could be funded under component 4 below.

An international fund could be established for physical reparation of storm damage based on an agreed third party assessment method (eg international NGOs), possibly to be managed by the Pacific Community. This could include a property/asset insurance component building on earlier work to establish a Pacific Islands Climate Change Insurance Facility.

  1. Compensation to build resilience against anticipated future damage and loss

This should factor in a 2o increase in average global temperature with associated adjustments to ocean temperature and projected sea level rise.

There are possibilities for revenue raising to fund resilience initiatives through establishing a premium rate for Pacific carbon sequestration (eg $200 per tonne CO2 equivalent), with sequestration activities part subsidising resilience measures, and an easy claims process specifically designed for small island developing states. This could incentivise large scale projects for blue carbon sequestration  throughout the Pacific that would have massive global benefit (eg seaweed farming which also repairs and protects marine ecosystems). Such a mechanism could be introduced in parallel with regional devolution of the Green Climate Fund to improve community accessibility and local responsiveness.

  1. Addressing non-economic damage and loss

Monetising loss of tangible and intangible cultural assets may not be possible in the short or longer term. However it would be possible to examine case by case compensatory investments such as mental health services and physical keeping places. In the meantime it is appropriate to assist local communities to observe and record impacts as they occur, as a basis for making future claims.


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