Whether actual money will be brought to the loss and damage facility remains to be seen
he over two-week long Conference of Parties (COP27) ended on a happy note. The establishment of the loss and damage facility, due since 1991, even before the start of the United Nations Framework Convention on Climate Change (UNFCCC) sessions, was announced. Developing countries and least developed countries have fought for more than 30 years for climate justice. The developed world can now be held responsible for increasing global temperatures due to the consumption of fossil fuels. The term ‘loss and damage’ is used to define the economic and non-economic losses incurred due to climate change. Examples of economic losses include loss of property and crops; non-economic losses include health, life and knowledge.
A few countries have already announced symbolic funding for loss and damage. These include Scotland (£2 million), Denmark (100 million Danish crowns), Germany (€170 million), Austria (€50 million), Ireland (€10 million) and Belgium ($2.5 million).
Now comes the real challenge of bringing actual money to this fund which the developed countries are supposed to contribute to. The modalities of this loss and damage fund will be operationalised by COP28, which will take place in Dubai in 2023.
A transitional committee will provide recommendations for the mechanisms and operationalisation of loss and damage. This committee will consist of 24 members i.e., 14 members from developing countries and 10 members from rich countries. The transitional committee will be looking to institutional arrangements, modalities, structure, governance and terms of reference for the fund. It will also define elements of the new funding arrangements, identifying and expanding sources of funding and ensuring coordination and complementarity with existing funding arrangements.
The committee will also work with parties on the current landscape of institutions – global, regional and national – that are funding activities related to addressing loss and damage, and ways in which coherence, coordination and synergies among those can be enhanced. It will also work on gaps in the current landscape, noting that these may vary depending on the challenge, such as climate-related emergencies, sea level rise, displacement, relocation, migration, insufficient climate information and data, or the need for climate-resilient reconstruction and recovery. The committee will also carry out discussion on the most effective ways to address the gaps, especially for the most vulnerable populations and the ecosystems on which they depend as well as potential sources of funding, recognising the need for support from a wide variety of sources, including innovative sources.
How will this committee make its decisions? It has been decided that two workshops, with the participation of a diversity of institutions, relevant to addressing loss and damage associated with climate change impacts will be held in 2023 by the UNFCCC secretariat (on the request of the committee). Parties and relevant organisations will be requested to submit at the UNFCCC website their views on topics for and the structure of the 2nd Glasgow Dialogue by February 15, 2023. The second Glasgow Dialogue will take place in June 2023. It will focus on the operationalisation of the new funding arrangements.
The secretariat will prepare a synthesis report on existing funding arrangements and innovative sources relevant to addressing loss and damage associated with the adverse effects of climate change. UN agencies, intergovernmental organisations and bilateral, multilateral and international financial institutions will also be invited to submit inputs on how they might enhance access to and/ or the speed, scope and scale of availability of finance for activities relevant to addressing loss and damage. Financial institutions such as the World Bank and International Monetary Fund will also be invited to see how they can contribute to innovative funding. The transition committee will request a report within four weeks of the Glasgow dialogue from the secretariat. These reports will be discussed and actions will be taken at COP28.
A landmark decision made at COP27 has been the operationalisation of the Santiago Network for loss and damage. The Santiago Network was established at COP25 in 2019 in Madrid. Its focus was on the technical assistance for loss and damage. The establishment of an advisory board to govern the Santiago Network was a key demand of the G77 and China. Members of the advisory board will include women, indigenous people and the youth. A worrying omission is the civil society organisations working for protection of environment and on climate change. There is a dire need to provide more funding for the Santiago Network to allow it to deliver its work effectively.
A lot needs to be done before COP28. Whether these discussions will bring actual money to the fund remains to be seen. Developing countries were promised climate finance, adaptation fund and a Special Climate Fund in the past. So far, we have not seen that compensation. If we look at the current decision’s text relating to loss and damage, rich countries cannot be held accountable legally. The original wording from the Paris Agreement i.e., “addressing” loss and damage has been changed to “responding and addressing”. It is important to understand the context here to be able to make rich nations accountable. Developed countries have not fulfilled their promise of providing $100 billion to developing countries since the Paris Agreement. False promises on financial arrangements have been made in the past. The present demands action. It is not ‘help’ or ‘aid’ but a human right that is being demanded.
The writer is a US based environmentalist. She is also a visiting senior research associate at the Sustainable Development Policy Institute