Exploring a comprehensive loss and damage facility for African countries

This policy brief by Zero Carbon Analytics explores the establishment of comprehensive loss and damage facilities at the national level for African countries to address climate-induced economic and non-economic losses. It distinguishes between avoidable, unavoided, and unavoidable risks, proposing a framework that combines risk finance (e.g., insurance, bonds) and curative finance (e.g., trust funds, impact investments) to build resilience and provide compensation.

• Africa is disproportionately affected by climate change despite contributing only 3% of global carbon dioxide emissions since the Industrial Revolution, leading to increased poverty, inequality, and disrupted livelihoods.
• Loss and damage is categorized by the feasibility of adaptation: 'soft adaptation limits' refer to risks that could be addressed by future measures, while 'hard adaptation limits' represent unavoidable risks where current technologies are not feasible, such as islands becoming uninhabitable due to sea-level rise.
• A comprehensive loss and damage facility for African countries should be established at the national level and consist of four main components: knowledge and capacity development, resilience building, funding collection and allocation, and compensation/recognition for unavoidable loss.
• Risk financing mechanisms for avoidable or unavoided loss include catastrophe insurance, microinsurance, national social protection schemes, contingency finance, catastrophe-linked bonds, green bonds, and forecast-based financing.
• Curative finance is required for unavoidable loss and damage that exceeds hard adaptation limits, utilizing mechanisms such as loss and damage trust funds, impact investment funds, and specific trust funds for needs like climate-induced relocation.
• Potential innovative funding sources for loss and damage include luxury carbon or wealth taxes, financial transaction taxes, international airline passenger levies, bunker fuels levies, and a global fossil fuel levy on the 90 companies responsible for 63% of atmospheric emissions.
• Case studies in South Africa, Mozambique, and Malawi highlight critical gaps in current responses, including a lack of reliable disaster risk databases, inadequate early-warning systems for rural populations, and an over-reliance on unpredictable ex-post humanitarian aid.

APA

Team, Z. (2022). Exploring a comprehensive loss and damage facility for African countries. Zero Carbon Analytics. https://zerocarbon-analytics.org/policy/exploring-a-comprehensive-loss-and-damage-facility-for-african-countries/

Chicago

Team, ZCA. Exploring a comprehensive loss and damage facility for African countries. Zero Carbon Analytics, 2022. https://zerocarbon-analytics.org/policy/exploring-a-comprehensive-loss-and-damage-facility-for-african-countries/.

Wikipedia

{{cite report |last1=Team |first1=ZCA |title=Exploring a comprehensive loss and damage facility for African countries |publisher=Zero Carbon Analytics |date=9 November 2022 |url=https://zerocarbon-analytics.org/policy/exploring-a-comprehensive-loss-and-damage-facility-for-african-countries/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{team2022exploring, author = {Team, ZCA}, title = {{Exploring a comprehensive loss and damage facility for African countries}}, institution = {Zero Carbon Analytics}, year = {2022}, month = nov, url = {https://zerocarbon-analytics.org/policy/exploring-a-comprehensive-loss-and-damage-facility-for-african-countries/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }