After almost 30 years of delay and inaction, parties at COP27 in Sharm el-Sheikh agree on the creation of a Loss and Damage Fund which will provide financial resources to developing countries battered by the effects of climate change. But will the transitional committee complete its work in time for COP28?
By Marco Lopez
SHARM EL-SHEIKH, Egypt, Mon. Nov. 21, 2022
The establishment of a Loss and Damage (L&D) Fund was agreed upon by governments at the tail end of the United National Climate Change Conference in Sharm el-Sheikh, Egypt earlier this month. Historic, and timely, since the impact of intense weather events continues to hammer vulnerable developing states across the world. The fund seeks to channel resources from those “first world” major and historical emitters – developed states to developing countries at the frontlines of the climate crisis.
This is good news, but they are fears of more waits since official meetings on the matter are not to begin until March 2023. The lack of sense of urgency, and the fact that large economies like the US and EU have been against the establishment of such of fund gives credence to those fears in a way. Since loss and damage caused by the climate crisis are estimated to be in the billions already. A bill adds up with each catastrophe.
Below is the decision text:
“The Conference of the Parties …
Acknowledge the urgent and immediate need for new, additional, predictable, and adequate financial resources to assist developing countries that are particularly vulnerable to the adverse effects of climate change in responding to economic and non-economic loss and damage associated with the adverse effects of climate change, including extreme weather events and slow onset events, especially in the context of ongoing and ex-post (including rehabilitation, recovery, and reconstruction) action;
Decide to establish new funding arrangements for assisting developing countries that are particularly vulnerable to the adverse effects of climate change, in responding to loss and damage, including with a focus on addressing loss and damage by providing and assisting in mobilizing new and additional resources, and these new arrangements complement and include sources, funds, processes, and initiatives under and outside the Convention and the Paris Agreement; “
In the context of this new funding arrangement referred to above the parties also decided to establish a fund for responding to L&D, “whose mandate includes a focus on addressing loss and damage.”
Loss and Damage takes, and by all indication will take various forms as time progress. Especially if the proper mitigation and adaptation efforts are not put in place by those developing countries in the crosshairs of the adverse effects of climate change. This can take form in both economic and non-economic forms according to experts, with the non-economic losses being more profound in many instances.
Because while the loss of infrastructure remedied by rebuilding, and decreases in agriculture and tourism can rebound, the loss of culture and heritage, terrestrial territory, displacement, and forced migration of entire communities are nearly unquantifiable.
Some estimates say that by 2030 impacts of climate change will cost between $300 billion and upward of $550 billion, exceeding the $1 trillion-dollar mark by 2050. These developing countries with already struggling economies, many of whom have already been impacted by intense weather and require restoration are looking at large polluters and telling them “you must pay”, as a matter of climate justice and international solidary and trust as U.N Secretary-General Antonio Guterres puts it.
As to the implementation the parties, “Expresses deep concern regarding the significant financial costs associated with loss and damage for developing countries, resulting in a growing debt burden and impairing the realization of the Sustainable Development Goals;”
The Transitional Committee, which is to make recommendations on the formation of the Loss and Damage Fund by next year at COP28 will be composed of 24 members who are to be nominated no later than December 15, 2022. Ten members from developed countries and 14 members from developing countries are to make up the group, three from Africa, including the President of COP27, and three from Asia and the Pacific including the president of the incoming COP28. Three members are to come from Latin America and the Caribbean, two from Small Island Developing States, two from the least developed states, and one from a developing country not included in the list above.
The committee will be chaired by two individuals, one from a developed country and another from a developing country, and the committee is mandated to hold only three meetings for the year, the first to be convened on March, 31. The best available science as it relates to Loss and Damage should guild the recommendations from the committee.
