“States shall also cooperate in an expeditious and more determined manner to develop further international law regarding liability and compensation for adverse effects of environmental damage caused by activities within their jurisdiction or control to areas beyond their jurisdiction.” (Principle 13th of the 1992 Rio Declaration on Environment and Development)
The concept of loss and damage is increasingly important today because we have already passed a crucial turning point: we failed to mitigate or adapt to climate change in time to avoid losses and irreversible impacts. These losses and irreversible impacts will be suffered by those vulnerable Southern countries lacking institutional, economic and financial capacities to cope. These nations are also the least responsible for the climate crisis.
According to Verheyen (2012) there are three types of loss and damage: avoided, unavoided and unavoidable. Avoided loss and damage can be better understood as losses that can be avoided through mitigation and adaptation efforts. When those efforts are insufficient or inadequate, unavoided loss and damage will occur. Finally, unavoidable impacts are those that cannot be avoided no matter how ambitious mitigation and adaptation efforts are. This type of loss and damage will require another set of tools that may include risk retention and risk transfer measures. Strong mitigation efforts, however, remain the most effective measure for reducing future loss and damage.
Tackling Loss and Damage – A New Role for the Climate Regime? (Verheyen 2012)