Last year’s UN climate conference in Egypt (COP27) will be best remembered for the decision to establish the loss and damage fund, as well as funding arrangements, for responding to climate-induced losses and damages. Decisions 2/CP.27 and 2/CMA.4 broke 30 years of deadlock on this contentious issue in a major win for developing nations.
Key is the establishment of a Transitional Committee (TC) to oversee the operationalization of the new funding arrangement and the fund. The 24-member committee will be tasked with giving this broad mandate form. It will determine the structure of the fund, areas of funding, the sources of finance, and how comprehensive the fund will be.
For a successful outcome at COP28, the TC’s work must pave the way for the swift operationalization of “new, additional, predictable, precautionary and adequate” financing. The fund must address the whole spectrum of losses and damages, such as slow-onset events, economic and non-economic losses, as well as rapid or disaster responses, including recovery, rehabilitation, and reconstruction. It must be financed through low-cost capital and be able to scale quickly to reach the USD 400 billion floor identified by the Loss and Damage Collaboration’s recent report. What’s more, the fund should be rooted in human rights, allow for public participation, and be designed to deliver to frontline communities in the whole Global South.