Strengthening the Impact of the Loss and Damage Fund: Reflections from COP28,UAE


Compiled by Byron Zamasiya

The Conference of Parties (COPs) meetings within the United Nations Framework Convention on Climate Change (UNFCCC) have historically struggled to produce concrete outcomes, often ending with deferred decisions or vague language. While acknowledging the achievements made since 1992, it’s essential to recognize that terms like “workplan” and “programme” have dominated COP outcomes, leaving many feeling dissatisfied. However, COP28, held in Dubai, departed from this trend by initiating and concluding with a promising tone, particularly regarding the launch of the Loss and Damage Fund. Despite this progress, it’s crucial to examine why stakeholders, especially those from vulnerable countries, believe that simply “good” is not “good enough.” At this point, l acknowledge that vulnerable countries have not yet received financial resources from the Loss and Damage Fund. While Strengthening the Impact of the Loss and Damage Fund may sound premature and may be better looked at after a couple of years of its operationalization, the author would like to think of what may be important to consider as the processes are being finalised.

Inadequacy of Funding
COP28 commenced with a significant gesture from the COP President Designate, Mr Sultan Ahmed Al Jaber, who spearheaded the launch of the Loss and Damage Fund. Notable contributions included US$100 million from the United Arab Emirates, US$10 million from Japan, and US$17.5 million from the USA, totalling pledges amounting to USD 792 million by the conference’s conclusion. While these pledges signify a degree of commitment to addressing loss and damage resulting from climate change impacts they pale in comparison to the estimated US$116 billion annually needed to combat the extensive loss and damage experienced by vulnerable nations, particularly with the escalating impacts of climate change. For instance, in the past 6 years, countries like Madagascar, Zimbabwe , Mozambique, and Malawi are witnessing an alarming increase in devastating yet recurrent cyclonic activities from the Indian Ocean. On the other hand, small island developing states like Tuvalu, Dominica, Marshall Islands, São Tomé and Príncipe in the equatorial Atlantic are already on the climate change frontiers facing varied threats such as sea level rise, severe storms and flooding of low-lying areas . Such developments underscore the sobering reality that even with commendable initiatives, the current efforts fall short of addressing the magnitude of loss and damage induced by climate change.

Sustainability Concerns
While the launch of the Loss and Damage Fund at COP28 was commendable, questions persist regarding its long-term sustainability. Critical considerations include strategies for replenishing the fund over time and ensuring equitable distribution to those most in need. Additionally, mechanisms to prevent mismanagement or corruption must be established. Furthermore, there is a need to link pledges to emission levels, with major polluters bearing a greater financial responsibility. Failure to address these concerns could jeopardize the fund’s longevity, leading to its eventual depletion.

Governance and Accountability                                                                                                                                                                          The decision to house the secretariat of the Santiago network for loss and damage within the UN Office for Disaster Risk Reduction and the UN Office for Project Services was a significant milestone at COP28. This move aims to provide technical assistance to vulnerable countries grappling with climate change impacts. What remains to be seen is whether the funding framework will be a departure from the World Bank terms which require 24% as administration costs in addition to other hosting costs . If that is the case, then deserving countries will fail to access the funds at a time when the effects of climate change are escalating. However, only time will tell, on whether questions regarding governance and accountability will be addressed. Are local communities adequately represented in decision-making processes? Is there transparency in fund allocation and utilization? Will the terms of arrangement for the host secretariat favour vulnerable countries? These questions must be addressed to ensure effective fund utilization and equitable distribution.

Recognition and Integration into Climate Action
Despite being included in the Global Stocktake decision, the Loss and Damage Fund was not formally recognized as the third pillar of climate action alongside mitigation and adaptation. This oversight undermines the importance of addressing loss and damage, particularly for vulnerable communities and developing countries. Integrating the fund into climate action efforts is imperative to comprehensively address the escalating impacts of climate change.

Recommendations for Improvement
To address the lingering concerns surrounding the Loss and Damage Fund, several key steps must be taken:
• Negotiators from least & developing countries, and small island developing states should call for the replenishment of the fund in subsequent COPs to meet the needs of vulnerable communities. This can be spearheaded by the COP Presidency for Azerbaijan and Brazil.
• The COP Presidency must mobilize developed countries to make larger pledges commensurate with the escalating demands.
• Explore innovative funding sources such as taxes on fossil fuels and shipping.
• Parties to the UNFCCC must mobilise financial support to the Santiago Network Secretariat for Loss and Damage to enable small-scale technical interventions that are either in advance of programme formulation or that are too small to be the subject of a wider project and programme funding.
• Developing countries should include detailed sections on loss and damage in the next round of NDCs, accompanied by cost estimates to drive predictable and adequate finance.

While the launch of the Loss and Damage Fund at COP28 signifies progress, there remains significant room for improvement. Addressing funding inadequacies, ensuring long-term sustainability, enhancing governance and accountability, and formally recognizing loss and damage as a critical component of climate action are essential steps in strengthening the fund’s impact. By implementing these recommendations, developed countries can better support communities vulnerable to climate change and work towards a more resilient future for all.

Byron Zamasiya is the climate change and energy governance thematic lead at ZELA.






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