Call Us Now

+91 9606900005 / 04

For Enquiry

Climate Change New Loss and Damage Fund Deal


The recently revealed draught decision text of the COP27 of the UN climate negotiations included both of India’s key mitigation points in the mitigation clause. Furthermore, the draught agreement appeared to be on track to meet a critical demand of developing countries by establishing a new loss and damage fund.


GS Paper 3: Conservation, environmental pollution and degradation, environmental impact assessment

Mains Question

Discuss the schism between the developed and developing worlds in climate change negotiations and the development of a global collective action plan. (250 Words)

The following are the key points of the draught decision:

  • There is no mention of phasing out fossil fuels in the text;
  • the 1.5-degree Celsius goal remains intact;
  • a financial system transformation is required; and
  • counties are urged to “significantly scale” adaptation finance.
    • It is weaker than the Glasgow pact because it fails to meet the call to double funding (COP26).
  • Requests that countries that have not yet updated and strengthened their climate plans do so before COP28; and
  • Applauds the new UN net zero rules for corporations to stop greenwashing.
  • Greenwashing is the practise of making false claims to mislead consumers into believing that a company’s products are more environmentally friendly or have a greater positive environmental impact than they actually do.

The mitigating clause in the draught decision and India’s influence on it:

  • Mitigation provision: It now urges countries to o Accelerate technology development, deployment, and dissemination.
    • Implement policies to transition to low-emission energy systems.
    • Accelerate the deployment of clean energy generation and energy-efficiency measures.
    • Accelerate efforts to phase out unabated coal power.
    • Phase out inefficient fossil fuel subsidies while providing targeted assistance to the poorest and most vulnerable people, recognising the need for assistance in achieving a just transition.
  • India proposed two significant insertions:
  • Continued “phase-down” of coal power.
  • The conditionality of fossil fuel subsidies relating to “targeted assistance to the poorest and most vulnerable.”
    • The initial draught used “phase-out” (rather than “phase-down”) for coal and missed the targeted support point, resulting in India’s objections.
    • India obtained inclusion of both of these points in the Glasgow Climate Pact (COP26) last year. These two will now remain in the COP27’s final decision.
    • The draught decision text will now be discussed in the plenary for final decision (COP27 outcome) with 195 countries.

The following are the draught decision’s loss and damage (L&D) points:

  • The text addresses the fundamental demand – a fund – as well as new ‘funding arrangements.’
  • It aims to connect L&D with a 1.5-degree Celsius warming limit (an indirect reference to mitigation).
  • While the main body of the text acknowledges the need for assistance for “particularly vulnerable” developing countries, the funding decision makes a more general reference to “developing countries.”
  • There are several references to using existing funds.
  • Attempts to broaden funding sources, including “innovative sources.”
  • Advocates for discussions on financial reform at the International Monetary Fund (IMF) and World Bank (WB) next year.


  • No funds have been pledged for the fund. Climate disaster-affected developing countries are still a long way from obtaining financial resources to rebuild.
  • The precise definitions of terms such as “particularly vulnerable” and “most vulnerable” are potential points of contention that will be resolved at a later stage.
  • An additional burden is placed on developing countries. One of the arguments is that each country should revise its climate action plans, known formally as nationally-determined contributions (NDCs), with progressively stronger actions each year.
  • Developed countries have failed to meet their promise of mobilising a relatively small sum of USD 100 billion per year. The draught text simply “urges” developed countries to achieve this goal, with no mention of a timetable.

December 2023