Time is running out to address the impacts of climate change. The Intergovernmental Panel on Climate Change’s latest scientific assessment makes the severity of the climate hazards we face very clear; even large-scale, high-impact events such as ice sheet collapse and abrupt ocean circulation changes cannot be ruled out. We are in an increasingly perilous situation. A large share of the Earth’s current and future populations will face more frequent and intense climate events. The number of governments adopting net-zero goals is encouraging. However, this needs to be translated into real action and real outcomes. In the short term, actions are in many cases not reducing climate risks, rather the opposite.

This report addresses the urgent issue of already occurring and future climate-related losses and damages. It approaches climate-related losses and damages from a risk management perspective. It explores how climate change currently is and in the future will play out in different geographies, over time, focusing on the three types of hazards: slow-onset changes such as sea-level rise; extreme events including heatwaves, heavy rainfall and drought; and the potential for large-scale non-linear changes within the climate system itself. The report explores approaches to reduce and manage risks with a focus on policy action and finance and the role of technology in supporting effective risk governance processes. Drawing on experiences from around the world, Least Developed Countries and Small Island Developing States in particular, the report highlights a number of good practices and points to ways forward.

Changes in the climate are rapid, widespread and intensifying. Human influence on this change is unequivocal. The heatwaves, wildfires, floods and tropical storms that have affected many parts of the world in recent years provide a foretaste of the future. Unchecked, climate change will affect all aspects of human life and the natural world, leading to increasing losses and damages. Lives, livelihoods and the social and economic stability of countries and regions are at risk along with the natural environment on which we all depend.

Losses and damages are happening now and the risks of future losses and damages will increase with climate change. This chapter briefly summarises the observed and projected physical changes due to climate change. It sets out both the framework for the analysis of climate risks and the associated risks of losses and damages that underpin this report. Some illustrative ways that climate risks manifest are presented and responsibilities for reducing and managing them discussed. The chapter also summarises the key messages and recommendations emerging from this report, including on the policy, financial and technological toolkits that can be used to reduce and manage the risks of losses and damages.

This chapter explores the different levels of confidence and associated uncertainties influencing understanding of risks of losses and damages from climate change. Specifically, it looks at different levels of confidence in projections of the physical climate and in expectations of future vulnerability and exposure. These include and/or relate to uncertainties on emissions trajectories; on how the climate system responds to those emissions; climate variability and uncertainty about socio-economic development patterns. The chapter includes worked analytical examples that unpack and illustrate the different types of uncertainties. It ends by examining how these uncertainties need to be considered together for an effective communication of climate risk.

This chapter characterises observed and projected physical and socio-economic losses and damages, highlighting the interconnectedness of risks across societies. It aims at elucidating the potential cascading effects of impacts from climate change and how these add complexity to the evaluation of risks. The nature and potential scale of climate risks are illustrated by analysis of impacts of sea-level rise in Small Island Developing States; the potential impact of and attribution of extreme events to human-made climate change; and the implications of crossing a tipping threshold for the Atlantic Meridional Overturning Circulation.

This chapter examines the role of policy, governance and institutions in reducing and managing current and future risks of losses and damages from climate change. It first examines approaches to decision making under uncertainty. This is followed by a discussion of approaches to address the components of climate risks (hazards, exposure and vulnerability) before exploring the role of institutions, governance and norms. The final section focuses on the implications of sea-level rise on policy priorities and decision-making processes in Small Island Developing States.

This chapter has two aims. First, it explores the implications of current and future losses and damages from climate change on public finances. These affect the ability of governments to pursue sustainable development and poverty reduction priorities under a changing climate. Second, it examines the critical roles of finance in reducing and managing the risks of losses and damages, namely in risk reduction, retention and transfer. The chapter also provides insights on the landscape of development finance directly or indirectly supporting these efforts, recognising the important role of humanitarian finance in supporting relief.

Technology is essential for effective risk governance, especially for the complex and potentially systemic hazards stemming from climate change. An understanding of the risks and current and future impacts of climate change is needed before developing and implementing approaches to reduce and manage the associated risks of losses and damages. Observation and modelling of the climate system and forecasting capabilities can inform the characterisation of risks. Technologies will provide the underpinning for evaluating risks, as well as developing approaches to reduce and manage those risks. As risks are always evolving, an iterative process of monitoring, evaluation and learning can inform both understanding and management of the risks over time.