Climate Reparations: A History of Discussions and Future Perspectives

Strategic Insights -

Climate change is a pressing issue that affects human and natural ecosystems worldwide, with Least Developed Countries (LDCs) and Small Island Developing States (SIDS) being disproportionately impacted. The concept of climate reparations, or financial compensation for climate-induced losses and damages, has been a contentious topic in international climate change negotiations. Despite the lack of clear definitions and frameworks, the idea of climate reparations has been present in various forms since the early days of COP negotiations.

The term "loss and damage" (L&D) was first mentioned at the 13th Conference of the Parties (COP) to the United Nations Framework Convention on Climate Change (UNFCCC) in 2007 and has been developed since then through COP negotiations. In 2022, the Intergovernmental Panel on Climate Change (IPCC) defined L&D as harm or risks arising from the negative impacts of climate change. However, the concept remains ambiguous, with some countries framing it as a risk management strategy and others as a reparative tool.

Since 1991, various countries have proposed different mechanisms for addressing climate change-induced losses and damages. For instance, in 1991, Vanuatu proposed an International Climate Fund and Insurance Pool. The concept of insurance was revived at COP7 in 2001, and subsequent COPs have seen the introduction of new proposals for climate change compensation mechanisms. However, none of these efforts have led to a concrete decision on climate reparations.

The Paris Agreement, adopted in 2015, established L&D as one of the pillars of climate action, along with mitigation and adaptation. However, Paragraph 51 of Decision 1/CP.21 explicitly excluded liability for climate-induced L&D. This exclusion has been interpreted by some scholars as prohibiting compensation claims, but others argue that it is not applicable to the Paris Agreement. A review of COP negotiations, including the decision-making process of the Paris Agreement and the Vienna Convention on the Law of Treaties (VCLT), suggests that the implications of these provisions can anchor a normative basis for climate reparation discourse at future COPs.

Moreover, the ICJ advisory opinion on climate change and international law, delivered in July 2025, reinforces states' binding obligations to prevent significant environmental harm and protect the climate system for present and future generations. The ITLOS advisory opinion on climate change, delivered in May 2024, also has global implications in developing consensus on state obligations regarding climate-induced risks. Additionally, the LLIUYA v. RWE case sets significant precedent on corporate responsibility for climate-induced harm.

Key Takeaways:

  • The concept of climate reparations, or financial compensation for climate-induced losses and damages, has been a contentious topic in international climate change negotiations since the early days of COP negotiations.
  • The term "loss and damage" (L&D) was first mentioned at the 13th Conference of the Parties (COP) to the United Nations Framework Convention on Climate Change (UNFCCC) in 2007 and has been developed since then through COP negotiations.
  • In 2022, the Intergovernmental Panel on Climate Change (IPCC) defined L&D as harm or risks arising from the negative impacts of climate change.
  • Since 1991, various countries have proposed different mechanisms for addressing climate change-induced losses and damages, including an International Climate Fund and Insurance Pool.
  • The Paris Agreement established L&D as one of the pillars of climate action, but excluded liability for climate-induced L&D.
  • The decision-making process of the Paris Agreement and the Vienna Convention on the Law of Treaties (VCLT) can anchor a normative basis for climate reparation discourse at future COPs.
  • The ICJ and ITLOS advisory opinions on climate change and international law have global implications in developing consensus on state obligations regarding climate-induced risks.
  • The LLIUYA v. RWE case sets significant precedent on corporate responsibility for climate-induced harm.

Statistics:

  • At least 30 years of COP negotiations have resulted in no concrete decision on climate reparations.
  • The Paris Agreement established L&D as one of the pillars of climate action in 2015.
  • The IPCC defined L&D as harm or risks arising from the negative impacts of climate change in 2022.
  • The ICJ advisory opinion on climate change and international law, delivered in July 2025, has implications for climate-induced risks worldwide.
  • The ITLOS advisory opinion on climate change, delivered in May 2024, has implications for state obligations regarding climate-induced risks.

Sources:

  • [https://www.ipcc.ch/report/ar6/wg2/chapter/chapter-1/](https://www.ipcc.ch/report/ar6/wg2/chapter/chapter-1/)
  • [https://unfccc.int/topics/adaptation-and-resilience/the-big-picture/introduction](https://unfccc.int/topics/adaptation-and-resilience/the-big-picture/introduction)
  • [https://enb.iisd.org/events/poznan-climate-change-conference-december-2008](https://enb.iisd.org/events/poznan-climate-change-conference-december-2008)
  • [https://unfccc.int/topic/climate-action/adaptation](https://unfccc.int/topic/climate-action/adaptation)
  • [https://www.researchgate.net/publication/305695003_Loss_Damage_and_Responsibility_after_COP21_All_Options_Open_for_the_Paris_Agreement](https://www.researchgate.net/publication/305695003_Loss_Damage_and_Responsibility_after_COP21_All_Options_Open_for_the_Paris_Agreement)
  • [https://www.researchgate.net/publication/305695003_Loss_Damage_and_Responsibility_after_COP21_All_Options_Open_for_the_Paris_Agreement](https://www.researchgate.net/publication/305695003_Loss_Damage_and_Responsibility_after_COP21_All_Options_Open_for_the_Paris_Agreement)
  • [https://itlos.org/fileadmin/itlos/documents/cases/31/Advisory_Opinion/C31_Adv_Op_21.05.2024_orig.pdf](https://itlos.org/fileadmin/itlos/documents/cases/31/Advisory_Opinion/C31_Adv_Op_21.05.2024_orig.pdf)