COP28: All Eyes on Loss and Damage Fund
As the world eagerly awaits the COP28 conference, the spotlight is on the operationalization of the Loss and Damage Fund. The responsibility lies with wealthy nations to back up their words with financial contributions in the fight against climate change, which is already reaching critical levels.
COP28 will be a crucial platform to evaluate the progress made by the global community regarding the Loss and Damage Fund, which was announced last year in Sharm el-Sheikh. The United Nations Framework Convention on Climate Change (UNFCCC) Transnational Committee’s September report acknowledged “significant progress” in establishing funding arrangements. However, the magnitude of the announcements made during the conference remains uncertain.
Sultan Ahmed Al Jaber, the president-designate of COP28 and UAE’s Special Envoy for Climate Change, has urged countries to think creatively when identifying funding sources and defining financing arrangements. The goal is to ensure that the funds are sufficient and distributed efficiently. While the demand for a Loss and Damage Fund was fulfilled in November 2022 in Egypt for climate mitigation, the establishment of a mechanism for fund distribution and contributions remains a contentious issue.
To understand the importance of the Loss and Damage Fund, it is crucial to comprehend the Conference of Parties (COP), which serves as the highest decision-making and stock-taking body under the UNFCCC. The 197 countries involved in COP are divided into two groups: Annex I parties and Non-Annex I parties. Annex I comprises developed nations historically responsible for greenhouse gas emissions contributing to global warming. Within Annex I, Annex II countries bear greater responsibility for providing financial resources to mitigate climate change’s impact.
Non-Annex Parties consist of developing countries, often referred to as the Global South. These nations are more vulnerable to climate change’s consequences and require financial assistance and reparations from wealthier countries for the damage caused by historical emissions.
The Loss and Damage Fund serves as a form of reparation package, where developed nations compensate developing countries more susceptible to climate change. After three decades of negotiations, the COP countries agreed to establish the fund at COP27 in Egypt.
The idea for the Loss and Damage Fund originated from the Paris Agreement in 2015 during COP21. For the first time, wealthy nations acknowledged the need to recognize loss and damage inflicted by extreme weather events. However, this recognition did not lead to a separate compensation mechanism apart from climate financing, which itself fell short of adequately supporting vulnerable nations. The Loss and Damage Fund was established seven years later at COP27 in Egypt. COP15 emphasized the importance of developed countries taking the lead in providing financial assistance to less endowed and more vulnerable nations, while also encouraging voluntary contributions from other parties.
India played a significant role in rallying the Global South for the Loss and Damage Fund. Other influential voices, such as the Alliance of the Small Island States (AOSIS), also advocated for the fund.
One major hurdle in establishing the Loss and Damage Fund was the United States’ stance during the tenure of President Donald Trump, who denied the existence of climate change. However, with Joe Biden’s election in 2020 and his strong climate promises, the fund regained attention on the UNFCCC agenda.
Several catastrophic disasters attributed to climate change further underscored the need for the Loss and Damage Fund. These included flash floods in Pakistan, floods and landslides in India’s Uttarakhand, and the devastating wildfires in Australia and California. These disasters not only threatened lives but also livelihoods and food security. Researchers also warned that climate extremes could severely impact crop production.
Decision-making during COP relies on negotiation and consensus. Until consensus is reached and announced, it is challenging to predict the outcome of the negotiations. However, one thing is clear: time is running out in the fight against climate change. Wealthier nations must prioritize their financial commitments for the sake of humanity.