The UN Climate Change Conference – COP28 – started yesterday in Dubai with a milestone: an agreement to operationalise up a fund to provide financial assistance to countries most impacted by climate change.
Known as the “loss and damage fund” during negotiations, it was initially agreed during last year’s COP27 held in Egypt, and became operational on November 30th after agreement was reached during a series of transitional committee meetings, according to a statement by the COP28 Presidency. “Loss and Damage is essential even if the world meets climate mitigation goals because a ‘locked-in’ level of warming already impacts particularly vulnerable communities”, recognized the COP28 Presidency.
Loss and damage is not so much aid but compensation, a way for rich, high-polluting nations to support vulnerable communities that are most suffering the impact of climate change, and has been called for by poorer nations for 30 years. Addressing loss and damage is a crucial part of climate action together with mitigation and adaptation. While climate adaptation includes protecting communities from the effects of climate change, loss and damage entails helping those communities after they have experienced those effects. Basically, it is necessary when efforts to reduce emissions are not ambitious enough and adaptation efforts have not been implemented or have not been successful. It recognizes that as climate change progresses, we approach limits to adaptation, where the impacts are so severe that it is not possible to prevent loss and damages.
The set up of the fund on the first day of the conference, which will last until December 12, opens the doors for countries to announce contributions. Several did already: the UAE pledged $100 million, Germany also pledged $100 million, the UK pledged £40 million for the fund and another £20 million for other arrangements, Japan $10 million and the U.S. $17.5 million. To put that in context, the Adaptation Gap Report 2023 recently released by UNEP estimated the finance needed to implement domestic adaptation priorities at US$387 billion per year. The fund will be initially hosted by the World Bank, and further details such as who can receive funding, and how much of it will be grants versus loans, are yet to be announced.