A vital manifestation of climate justice, the long-standing call for a robust Loss and Damage (L&D) fund has finally been addressed at the COP28 climate talks in the United Arab Emirates. While its launch marks a diplomatic triumph for the Emirati president and brings optimism to COP28, challenges persist in ensuring the effective utilization of the fund.
- Environmental Pollution and Degradation
- International Treaties & Agreements
- Government Policies & Interventions
The ‘loss and damage’ fund is finally online but more needs to be done. Comment. (15 marks, 250 words).
About the Fund:
- This fund, essential for addressing the inevitable consequences of climate change, comprises financial resources and technologies contributed by developed nations and utilized by others.
- Despite the challenging negotiations that led to its operationalization, initiated by the G-77 bloc and China, particularly championed by Pakistan during COP27 in Egypt, the fund’s implementation is now underway.
- Initially, the World Bank will host the fund for a provisional period of four years and will be supervised by an independent secretariat, with the Bank anticipated to impose a substantial overhead fee.
- Developing nations initially opposed this proposal but eventually acquiesced during the TC-5 meeting, securing some concessions in return.
Challenges with the Fund:
- Although certain countries have pledged amounts to the fund — ranging from $10 million by Japan to $100 million each by Germany and the UAE — it remains unclear whether these contributions will be periodically replenished.
- The committed sums are also insufficient, totaling $450 million at present, whereas the actual demand is in the range of several billion dollars.
- This shortfall, though not conclusively determined, is set against the backdrop of developed countries failing to meet their 2020 deadline to mobilize the promised $100 billion in climate finance, managing only $89.6 billion in 2021.
- Furthermore, contributions to the fund are voluntary, despite every country being invited to participate.
- Lastly, the World Bank must adhere to certain conditions in managing the fund, including a level of transparency it has not embraced thus far.
- The Bank is also required to submit a report to the Parties to the Paris Agreement. If the stewardship is deemed unsuitable, there is a provision for the fund to ‘exit’ the World Bank.
Ensuring the fund’s contents are easily accessible to those in need, in a timely manner, without bureaucratic hurdles, and in sufficient quantities is crucial. Presently, there is little assurance that these requirements will be met. Although the L&D fund is now operational, much more effort is needed to address these challenges.