On the inaugural day of the two-week climate conference in Dubai, COP28 officially adopted the Loss and Damage Fund on Thursday, November 30, 2023, marking a significant milestone for the COP28 presidency. Nations that are most vulnerable and impacted by the effects of climate change linked to global warming have for many years made a call for a loss and damage fund.
After a series of five meetings this year, the Transitional Committee on Loss and Damage reached a consensus on a set of recommendations for the fund. However, discrepancies emerged between developing and developed countries, particularly concerning the World Bank’s role as the fund’s entity, and operational mechanisms such as direct access.
The Loss and Damage fund is set to have the World Bank as its interim host for possibly the next four years, only as long as it operates in a transparent and easy-to-access way. During the biannual meeting of European member states, Ajay Banga, the President of the World Bank, stressed the need for inclusive governance, advocating for robust representation from G77 countries on the fund’s board.
Members of the Transitional Committee urged the fund’s operations to align with UNFCCC and Paris Agreement principles. To ensure autonomy and impartiality the fund will have an independent secretariat and is accountable to a board.
The current pledges include: UAE: $100 million; UK: Up to £60 million (£40 million for the fund and £20 million for funding arrangements); US: $17.5 million for the fund, $4.5 million for the Pacific resilience facility, and $2.5 million for the Santiago Network; Japan: $10 million; Germany: $100 million; and EU: $225 million.
The fund’s replenishment cycle and scale remain unclear, despite increasing needs. The 2023 UNEP Adaptation report estimates up to $387 billion is needed annually for developing countries to adapt to climate-driven changes.
African civil society organisations and African climate leaders have however been reacting to the adoption of the Loss and Damage Fund.
Joyce Banda, Former President of Malawi, said: “The establishment of the Loss and Damage Fund is a big win for vulnerable countries, especially those in Africa that contributed little to the climate crisis. It is a step in the right direction for countries like Malawi that have suffered extreme losses due to cyclones that killed more than 500 and displaced half a million others just this year.
“We welcome the pledges from rich nations, but we need clear directions on how the most vulnerable communities can benefit from this fund, which must also not lock countries into more debts. It is time that commitments must be implemented. We need action and less statements of intent.”
Mohamed Adow, Founder and Director, Power Shift Africa: “The initial funding pledges are clearly inadequate and will be a drop in the ocean compared to the scale of the need they are to address. In particular, the level announced by the US is embarrassing for President Biden and John Kerry. It shows how this must be just the start.”
Mike Terungwa, Director, Global Initiative for Food Security & Ecosystem Preservation (GIFSEP): “The pledges sound good but they are political statements and not REAL money. It would be great if specific time frames could be included for many of the pledges that were made 8 years ago at the Paris Agreement. The pledges should not turn into emission or pollution permits from the countries pledging.”
Julius Ng’oma, National Coordinator, Civil Society Network on Climate Change, Malawi: “It is a welcome decision and an encouraging one for African countries particularly the least developed countries as they are the ones that suffer the most from climate-induced loss and damage. It’s a big win for Malawi which has seen the worst climate change impacts in the past few years from new climate hazards.
“We hope the financial pledges will quickly be turned into commitments and that money will quickly flow to address loss and damage associated with the impacts of climate change as these impacts can not wait. We hope the hosting by the World Bank won’t undermine the noble course this fund was created for.”
Mithika Mwenda, Executive Director, Pan African Climate Justice Alliance (PACJA): We’ve a long way to see this Fund functional, though as African civil society, we celebrate the small steps made by the adoption of the report. We however caution our leaders not to be blinded by the announcement of around $400 million, as we need massive responses for loss and damage, as well as adaptation and resilience building by the people at the frontline of climate crisis.
“The money pledged is the amount Ronaldo earns in less than two years in Saudi Arabia’s Al Nasr football club. We thus want rich countries to provide sufficient money to enable people facing extinction to survive the existential threats posed by the problem they did not cause. With political will, the world can raise the money required. If in three months, the global community was able to mobilise trillions of Dollars for Vaccine development and deployment and Covid-19 recovery, they can as well raise money for this other crisis – climate change.”
Amy Giliam Thorp, the Senior Climate Adaptation and Resilience Policy Advisor at Power Shift Africa: “The adoption and establishment of the Loss & Damage fund at the start of COP28 is a historic moment, representing a victory for equity and justice for nations most vulnerable yet least responsible for climate change. However, the financial pledges leave much to be desired, paling in comparison to the scale of finance required for Loss & Damage, which must reach around $580 billion by 2030.
“Over the coming days, we need to see an increase in the number of pledges from developed nations, the scale of finance committed, and concrete timelines on when the finance will be delivered. Finance for Loss & Damage cannot and should not be the new finance gap that we debate and hold countries accountable to delivering on.”
Sulaimon Arigbabu, Executive Secretary, HEDA Resource Centre: “The operationalisation of the Loss and Damage Fund is an interesting development; Africa and developing countries have fought for this to happen and also the fact that it should be an independent fund and not just something hosted in the World Bank. Amongst the major points of contention is that contributing to the fund should be voluntary and not obligatory by Annexxe 1 countries.
“However, I will advise for caution because if you recall when America was not ready for Kyoto, it fought Kyoto all the way, claiming that it was short changed in the passing of the Protocol. We need to be careful because America can throw up stumbling blocks in its way. It will be interesting to see how rest of the developing countries also react to this. More importatntly, we should be careful that the LDF doesn’t become another Green Climate Fund that has not lived up to expextations in terms of the quantum of money mobilised since 2010. These are important things to keep our eyes on, it is not just to have the fund.
“There are so many climate debts out there that are not being paid, there are so many debt obligations of developed countries that are not being paid, and so I thread with cautious optimism. But, yes, it is a good development that the fund has been operationalised. Gives some sense of hope about how these plays out. The rest of the negotiations in Dubai will tell, and then what happens afterwards will show the world if this has indeed been a success or its just one of those several flukes in the international system around climate negotiation and funding.”
Fadhel Kaboub, Professor of Economics and president of The Global Institute for Sustainable Prosperity: “With the Marshall Plan the US gifted (mostly grants) 5% of its GDP to Western Europe. In today’s dollars, that would be nearly $1.2 trillion. And that was on top of a very expensive world war, which came after the economic misery of the Great Depression. So the $17.5 million pledged today by the US for the Loss and Damage Fund shows how serious the Global North is about climate change.”
Chukwumerije Okereke, Senior Research Associate, Tyndall Centre for Climate Change Research, University of East Anglia: “The operationalisation of the Loss and Damage Fund is a welcome development. It is a testament of what can be achieved by the international community when there is goodwill and commitment to progress. It is potent evidence of the role of justice, equity and fairness in international climate diplomacy and international relations in general.
“I now call on more countries to join those that have already made pledges to commit more money to the Loss and Damage Fund. We must remember that while these pledges are historic the cost of climate Loss and Damage runs into trillions and still much greater than the money so far pledged. I also urge those that have made pledges to redeem those pledges in a timely manner.”
Mathews Malata, Environmental Rights Activist, Malawi: “Good start, let the funds begin to flow and pledges should be significant and target the most vulnerable countries. We should expect hitches but we will get better. We must keep in mind that it’s a great milestone but not an end to the struggle. We must fight on. The same momentum should be seen in other important topics, especially those linked to emissions reduction.
“Reducing carbon emissions and limiting global temperature rise to 1.5 degrees should always be the focus. False and temporary solutions should not come in place of just and sustainable solutions because we know whatever amount they will be paying will not cover the recovery and disaster risk reduction financing gaps. Many tough battles ahead.”
Nnimmo Bassey, Director, Health of Mother Earth Foundation (HOMEF): “Although approved, the actual operationalising of the Loss and Damage Fund is still hazy. The ‘Loss’ aspect of the title is quickly evaporating as some are referencing the fund as Climate Damage Fund. The volume of funds and those that pledged equally raise concerns. A Loss and Damage Fund (LDF) should clearly be treated as a climate reparation fund that covers historical and present harms and losses. The parties made pledges totalling $400 million, a tiny drop in the ocean of losses at a time when what is needed tops $400 billion a year.
“Those who made pledges include the host country, UAE who pledged $100 million and Germany who pledged $100 million. The UK pledged about £60 million, and the US threw a meagre $17.5 million on the table followed by Japan with $10 million. Unless the LDF is considered as charity, it can be seen that the big polluters that are driving the world to alarming climate heating are not showing much concern about the loss and damage inflicted on the vulnerable nations and territories. It cannot be a matter of lack funds when we see them spending $2 trillion per year in armaments and warfare.”
Lina Ahmed, Policy Advisor, Climate Loss and Damage, Germanwatch: “The gavelling of the Loss and Damage Fund marks a pivotal moment in navigating our collective response to climate change and establishing climate justice. The applause that resonated in the opening plenary, though heartfelt, carried with it an awareness that the fund’s design is far from ideal. In a time when discussions about climate finance should be counting in billions, the current pledges, which only reach into the millions, starkly highlight the discrepancy between need and action.
“As we move forward, it is crucial to ensure that the fund adheres strictly to human rights principles. It is also imperative that wealthier nations commit to meeting the scale of need. Close attention must also be paid to the World Bank’s compliance with the 11 conditions recommended by the Transitional Committee, ensuring that the fund’s goals are not undermined.”
Sam Onuigbo, Nigerian environmentalist and lawmaker: “Loss and Damage, which was ‘exhumed’ from the Article 8 of the Paris Agreement by developing countries, is a fund that recognises the importance of minimising and addressing the loss and damage associated with the adverse effects of climate change. Clearly, Loss and Damage Fund is intended to assist hard hit nations to absorb or overcome the negative consequences that arise from the avoidable risks of climate change.
“The developing countries pushed hard for it and got a resolution for it to be set up and operationalised. Therefore, it’s operationalisation which came into effect on November 30, 2023, in Dubai during COP28, just one year after it was adopted, is a significant and positive development. The operationalisation raises a lot of hope and indicates that the meetings and resolutions over the years can be put into effect. It is a positive development indeed.
“It means that when the developing countries come together as a united front, negotiate and maintain some focus, they stand a great chance to succeed and achieve a significant progress. The donations by developed and rich countries is a clear indication that all hands must be on deck for us to make progress and start solving the problems caused by human activities. As I said a few days ago, it is now, ‘action, action, and less talk’.”
Aurélie Kalenga Njimngou, Branch Manager, African Climate Reality Project: “The African Climate Reality Project (ACRP) welcomes the establishment of the Loss and Damage Fund and hopes it leads to justice for countries battered by the climate crisis. We look forward to seeing money flowing into the fund and want leaders from developed nations to make pledges here at COP that go beyond Adaptation and Mitigation financing, and adequately and effectively address the injustices of the past.
“Those who are affected first and most severely by the climate crisis have contributed the least, and it is their human right to receive financing for loss of life, and damage to infrastructure caused by climate change impacts.”
Leonida Odongo, Founder, Haki Nawiri Afrika: “For Africa and Africans, the climate crisis has had an irreparable impact, for example the loss of loved ones cannot be financially quantified. The least the polluters can do is to pay for the havoc created on Mama Africa.”
Robert Yadama Laar, President, Arocha-KNUST: “Historical polluters shouldn’t just promise without outlining concrete plans to deliver on their promises. Also concerning accessing the L& D fund, the criteria for accessing the funds should be well defined and Africa shouldn’t be given the same criteria as other regions.”