A little progress in Loss and Damage Fund

Delegates from nearly 200 countries, leaders of business and finance, and representatives of civil society have been gathered in Dubai to participate in the COP28 climate conference with the aim of fast-tracking the transition to a clean-energy future.

COP28, the global mega event, is expected to stress the importance of collective action to stop climate change and the critical role of finance in the low-carbon transition. With our participation we hope to help investors and other capital markets participants see what’s ahead and back climate commitments with action.

Loss and damage is one of the main agenda in the event where small countries are expecting funds for climate actions in the countries. The big countries are therefore will have to commit the contributions and fulfillment of their earlier commitments. 

The ”loss and damage” is a terminology to the estimated economic, non-economic and ecological losses caused due to ongoing and future impacts of climate change.

“This includes losses and damages due to rapid onset extreme weather events such as floods and tropical cyclones and slow onset changes such as sea level rise and drought,” the Centre for Science and Environment explains.

Governments have collectively pledged more than $400 million to establish a loss and damage fund for the victims of climate disaster.

On day one of UN climate talks in Dubai, negotiators rubber-stamped plans to get the fund up and running. The arrangements had been hashed out by a transitional committee over five fraught meetings in the past year.

The Cop28 president Sultan Al Jaber hailed the decision as “historic”, with a broad smile, after watching delegates burst into a round of applause.

“This sends a positive signal of momentum to the world and to our work here in Dubai,” he added.

Moreover, more than $400 million has been pledged initially to the new “loss and damage” fund for countries impacted by climate change since it was approved by nations attending the UN’s COP 28 climate summit in Dubai on Thursday, news agency AFP reported.

The UAE announced $100 million toward the loss and damage fund, “paving the way for other nations to make pledges to the critically important Fund”, a press release said. This fund will help countries cope with “loss and damage” caused by climate change.

The press release further informed about other countries making notable commitments. These countries included:

–     Germany, which committed $100m million

–     The United Kingdom (UK), which committed £40million for the fund and £20million for other arrangements

–     Japan, which contributed $10million

–      The United States (US), which committed $17.5million

–     The European Union, which committed $246 million Italy said it will provide $108.91 million

–      Netherlands said it will contribute 15 million euros

The amount so far falls well short of the $100 billion developing nations say are needed to meet the costs of changing climate, but more pledges are expected in coming days, the AFP report said.

The formal establishment of the “loss and damage” fund long sought by climate-vulnerable nations provided an early win at COP28, where sharp divisions over the phasing out of fossil fuels were immediately apparent, news agency AFP reported.

Significantly more money will be needed to help vulnerable communities benefit from the new mechanism once it gets up and running. The fund is designed to receive contributions “from a wide variety of sources”, including grants and cheap loans from the public and private sectors, and “innovative sources”.

The World Bank is set to initially host the fund for four years, despite strong resistance to its involvement from developing countries.

All developing countries “particularly vulnerable” to the effects of climate change will be eligible to benefit from the mechanism. However, the definition of vulnerability – one of the thorniest issues – is not detailed in the text.

The agreement is an “early win” for the Cop28 hosts, as it sets the start of the conference on a positive collaborative tone, Ana Mulio Alvarez, a loss and damage expert at E3G, told Climate Home.

Speaking at the plenary session, several negotiators underlined the difficult compromises needed to strike a deal.