A Non-Economic Loss and Damage Explainer
WHAT IS NON-ECONOMIC LOSS AND DAMAGE?
Due to a failure of rapid mitigation and effective adaptation, climate change negatively affects human societies and the natural systems they rely on for material and immaterial wellbeing. This abject failure of countries, particularly in the Global North, to stabilise their greenhouse gas emissions and enable sufficient and effective adaptation financing means we have passed the point of no return, with climate change leading to ever worsening impacts. Those impacts that cannot, or will not, be adapted to have been termed losses and damages1,2. On the other hand, Loss and Damage (L&D*) is a political and legal object of international climate governance linked to action to avert, minimise, and address the very worst climate impacts that disproportionately affect vulnerable developing countries (i.e., the three pillars of mitigation, adaptation, and loss and
damage)3.
The Intergovernmental Panel on Climate Change (IPCC)1 recently defined L&D—scientifically—as “adverse observed impacts and/or projected risks and can be economic and/
or non-economic”. Indeed, it has become common to differentiate between economic and non economic L&D. The economic dimension is understood as the L&D to resources, goods and services that are commonly traded in markets. Examples include wages, crops, cars, electronics,
and buildings. Non-economic loss and damage (NELD) refers to the things of value—intangible or tangible—that are not commonly traded in markets. Non-economic losses
are associated with irreversible impacts such as fatalities or permanent destruction of nature, whereas non-economic damages are associated with impacts that can be alleviated
or repaired, such as decreased social cohesion or soil quality4. It is important to underline that NELD occurs in almostall cases of L&D. NELD is the focus of this explainer.
