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About Loss and Damage Fund


In light of the escalating climate crisis, the ‘Loss and Damage’ (L&D) fund and adaptation have recently come into focus. 


GS III: Environment and Ecology

Dimensions of the Article:

  1. Loss and Damage Fund: Addressing Irreversible Climate Consequences
  2. Challenges Regarding the Loss and Damage Fund
  3. Way Forward for the Loss and Damage Fund

Loss and Damage Fund: Addressing Irreversible Climate Consequences

  • The Loss and Damage (L&D) fund addresses irreversible climate change consequences unmitigated by adaptation efforts.
  • Compensation for real losses encompassing human rights, well-being, and environmental sustainability.
Genesis and Historical Accountability:
  • Persistent calls over 30 years for affluent nations to acknowledge historical pollution’s role in global temperature rise.
  • Historic pollution causes widespread damage, especially affecting the poorest nations.
COP 19 and Fund Inception:
  • Formal agreement at COP 19 in 2013 led to the establishment of the L&D fund.
  • Designed to provide financial and technical assistance to economically developing nations facing Loss and Damage.

Subsequent Developments and Challenges:

  • COP 25:
    • Santiago Network for L&D established, but no country committed funds.
  • COP 26:
    • 2021 summit in Glasgow continued discussions on the fund’s operationalization.
  • COP 27 (November 2022):
    • Agreement to set up the L&D fund.
    • Transitional Committee (TC) formed to devise operational mechanisms.
Stalemate at TC4 and TC5:
  • TC4 Meeting:
    • No consensus on operationalizing the fund.
    • Contention over hosting at the World Bank, common but differentiated responsibilities (CBDR), climate reparations, and eligibility of developing nations.
  • TC5 Meeting:
    • Drafted recommendations forwarded to COP 28.

Challenges Regarding the Loss and Damage Fund

Non-Commitment of Developed Nations:

  • Developed nations, especially the US, show reluctance to be primary donors, raising doubts about their commitment.
  • Voluntary support undermines global climate negotiations and cooperative efforts.

Uncertainty Regarding Fund Size:

  • Lack of clarity on the fund’s size, with attempts to specify it thwarted by the U.K. and Australia.
  • The current draft urges developed nations to contribute without a defined commitment or framework.

Discontent among Developing Nations:

  • Developing nations feel their concerns are inadequately addressed, complicating climate action and eroding trust.
  • Weakness in the L&D fund threatens climate justice, disproportionately affecting vulnerable communities.

Global Implications:

  • Weakening the L&D fund has broader implications, challenging climate justice and worsening the plight of vulnerable communities.
  • Potential security challenges arise as climate-induced instability leads to conflicts with cross-border repercussions.

Humanitarian Consequences:

  • Absence of support for vulnerable communities may result in humanitarian crises, including food shortages, displacement, and conflicts.
  • Communities are left to independently cope with worsening climate impacts, exacerbating the humanitarian burden.

Way Forward for the Loss and Damage Fund

Call for Active Contribution:

  • Urge developed nations to play a pivotal role as primary donors to the Loss and Damage (L&D) fund, demonstrating a robust financial commitment.

Advocate for Transparency:

  • Push for transparent discussions to clearly define the fund’s size, operational guidelines, and allocation mechanisms, ensuring accountability and effectiveness.

Promote Diplomatic Dialogues:

  • Foster open diplomatic dialogues addressing the concerns of developing nations, emphasizing collaboration for impactful climate action and resolution of global issues.

Address Security Implications:

  • Proactively tackle security implications arising from climate-induced instability, implementing measures to manage humanitarian crises and support vulnerable communities.

-Source: The Hindu

December 2023