Loss and Damage fund operationalised, countries make initial pledges | Latest News India - Hindustan Times
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Loss and Damage fund operationalised, countries make initial pledges

ByJayashree Nandi
Nov 30, 2023 07:20 PM IST

The fund will address the needs of developing countries vulnerable to the adverse effects of climate change

New Delhi: On the opening day of COP28, 196 parties adopted the decision to operationalise the Loss and Damage fund with parties approving the draft text that was adopted by the Transitional Committee in Abu Dhabi earlier this month.

 (AFP)
(AFP)

Several countries pledged funds: UAE pledged $100 million; Germany: $100 million; UK: $40m to the Fund and £20m for other funding arrangements for loss and damage; US: $17m and Japan: $10m.

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The Word Bank will be the interim trustee of the fund and the fund will be conferred with legal personality, legal capacity as necessary for discharging its roles and functions, in particular the legal capacity to negotiate, conclude and enter into a hosting arrangement with the World Bank, the draft text stated.

The fund will address the needs of developing countries that are particularly vulnerable to the adverse effects of climate change in responding to economic and non-economic loss and damage associated with the adverse effects of climate change, including extreme weather events and slow onset events, the text adds.

The fund will provide finance for addressing a variety of challenges associated with the adverse effects of climate change, such as climate-related emergencies, sea-level rise, displacement, relocation, migration, insufficient climate information and data, and the need for climate-resilient reconstruction and recovery. It also clarifies that funding is “based on cooperation and facilitation and do not involve liability or compensation.”

The text stated that developed countries are “invited” to make contributions. Developing countries have said the actual needs are closer to $400bn per annum. All developing countries are eligible to directly access resources from the Fund.

The decision to operationalise the fund was adopted unanimously with parties clapping, cheering and giving a standing ovation to honour the spirit of solidarity in dealing with Loss and Damage.

HT reported on November 5 that the Transitional Committee on Loss and Damage reached an agreement on operationalising the Loss and Damage fund late on November 4 night in Abu Dhabi but with US objecting to the outcome.

The agreement will now be sent by the Committee to the UN Climate Meeting (COP28) for further deliberations, along with the objections US has put on record. The final text was adopted but US and developing countries had several reservations to the text. US wanted to withdraw support to the text because it insisted that the text should make it clear that contributions to the fund are in nature. Developing countries said the funding arrangements are very weak and take away from the historical responsibility of rich nations.

In a submission made to the Transitional Committee on Loss and Damage, by the representatives of developing country TC members representing Africa, Asia-Pacific, Latin America and Caribbean, Least Developed Countries, and Small Islands Developing States said the fund should be able to programme at least USD 100 billion a year by 2030. It would have to potentially scale up because this amount is not meant as a ceiling but rather as a minimum commitment. The Fund should be prepared to adapt to new climate change realities with the rising trajectory of losses and damages.

Also Read: COP28 summit should seek total fossil fuel ‘phaseout’: UN chief

Union environment minister, Bhupender Yadav congratulated the COP28 Presidency and said its a landmark decision in addressing the impacts of climate change.

Avinash Persaud, developing country negotiator and special climate envoy to Barbados and PM Mottley said in a statement: “This is a hard fought historic agreement. It shows recognition that climate loss and damage is not a distant risk but part of the lived reality of almost half of the world’s population and that money is needed to reconstruct and rehabilitate if we are not to let the climate crisis reverse decades of development in mere moments.”

“We understand that its interim host will be the World Bank. The fund should be fully funded at scale. Developed countries particularly US should lead in funding and money should be disbursed to the people on the frontlines. The fund should find a landing zone in the global stocktake. Human rights should be embedded in it,” said Rachel Cleetus, policy director with the Climate and Energy program at the Union of Concerned Scientists.

“Developed countries worked hard to make sure that contributions to the #LossAndDamage Fund remain voluntary. Let me tell you, that there is nothing voluntary about the devastating impacts and loss of lives that people are experiencing as a result of #LossAndDamage,” she added.

“Amid the historic decision to operationalise the Loss and Damage Fund within a year of its establishment, addressing underlying concerns becomes critical. On one hand, rich countries have pushed for the World Bank to host this Fund under the guise of ensuring a speedy response. Conversely, they have attempted to dilute their financial obligations and resisted defining a clear finance mobilisation scale. The absence of a defined replenishment cycle raises serious questions about the Fund’s long-term sustainability. Therefore, a robust system, particularly integrated with the Global Stocktake process and the new climate finance goal, is needed to ensure that COP28 results in a meaningful outcome,” said Harjeet Singh, head of global political strategy at Climate Action Network International.

“The responsibility now lies with affluent nations to meet their financial obligations in a manner proportionate to their role in the climate crisis, which has been primarily driven by decades of unrestrained fossil fuel consumption and a lack of adequate climate finance delivered to the Global South,” he added.

“Loss and Damage pledges are welcome, but this is not the end goal. We want a financial mechanism that is able to ensure that developing countries will have access to adequate, grant-based, and additional finance to address loss and damage on the ground. Pledges need to be accompanied with clarity on how the finance will be maintained for generations, especially now that it is framed that it will be voluntary to provide finance for loss and damage,” said Grace Ineza, Global coordinator of Loss and Damage Youth Coalition in a statement.

Climate change is already causing GDP and capital wealth losses at the global level, with developing countries bearing the brunt of impacts, according to a new report published today by the University of Delaware’s Gerard J. Mangone Climate Change Science and Policy Hub.

Globally, climate change has led to a population-weighted GDP loss of 6.3% in 2022. The unweighted percentage of global GDP lost is estimated at 1.8%, or about $1.5 trillion, and the difference between those two numbers reflects the uneven distribution of impacts, which concentrate in low-income countries and tropical regions that typically have more population and less GDP.

“The world is trillions of dollars poorer because of climate change, and most of that burden has fallen on poor countries. I hope that this information can clarify the challenges that many countries already face today and the support they urgently need to address them”, says Dr. James Rising, author of the study and Assistant Professor at the University of Delaware.

The total GDP loss to India in 2022 is 8% compared to a world without climate change. As of 2022, India has also suffered a cumulative decrease of 7.9% in capital wealth, mostly due to climate impact on human-produced capital (infrastructure), the study said.

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