A nearly 30-year fight has ended as the Loss and Damage Fund has been adopted at COP28, the international climate conference underway in Dubai, the United Arab Emirates.
COP28 President Dr. Sultan Al Jaber gaveled the adoption of the draft decision for the Loss and Damage Fund on Thursday afternoon during the conference’s opening. Dr. Al Jaber addressed the standing ovation, “We have delivered history today. It is the first time a decision has been delivered on day one of any COP.”
Loss and Damage have been a contentious topic, particularly for wealthier, long-polluting countries, primarily contributing to abundant greenhouse gas emissions, leaving developing nations to recover from unfolding climate disasters.
His Excellency Dr. Sultan Al Jaber, COP28 President during the UNFCCC Formal Opening of COP28 at the UN Climate Change Conference COP28 at Expo City Dubai on November 30, 2023, in Dubai, United Arab Emirates. (COP28, Mahmoud Khaled)
The chair of the Alliance of Small Island Developing States (AOSIS), Ambassador Pa’olelei Luteru and Permanent Representative of Samoa to the United Nations since 2021, stated that the fund was adopted, welcoming the recommendations drafted over the last year. “Our representatives on the TC [Transitional Committee] have been working assiduously to ensure that at COP28 we waste no further time in bringing this fund to fruition. We look forward to finally putting words into action and delivering on this commitment we made to help the people who suffer most from a crisis they did not cause.”
He continued, “And the work is far from over. After the gavel drops at COP28, we cannot rest until this fund is adequately financed and starts to actually alleviate the burden of vulnerable communities. Success starts when the international community can properly support the victims of this climate crisis, with efficient, direct access to the finance they urgently need.”
What is “Loss and Damage”?
The term refers to the irreversible economic and non-economic costs of extreme weather events and slow onset climate disasters such as rising sea levels and melting glaciers. The “loss” refers to irreversibly lost things, while “damage” refers to things that can’t be repaired or recovered.
Economic costs include lives, jobs, property, food systems, and territory irreversibly lost. In contrast, the harder-to-quantify non-economic costs refer to the loss of culture, identity, sovereignty, human dignity, biodiversity, and psychological well-being.
Ultimately, these funds are meant to be used for finding shelter for the thousands displaced by catastrophic hurricanes like 2019’s Dorian in the Bahamas, 2017’s Irma in Barbuda, or 2017’s Maria, which devastated Dominica and Puerto Rico. It is also meant for relocating coastal communities that are already or nearly underwater because of rising seas.
A brief history of “Loss and Damage”
“Loss and Damage” is far from a recent issue in the world of climate change. In fact, from the early 1990s, when world leaders and diplomats gathered at the United Nations, small islands began asking for help to deal with climate-related impacts. However, wealthier nations resist these talks as they avoid becoming legally or financially responsible for the unfolding climate impacts.
With shared climate challenges, small islands formed AOSIS in 1990 at the Second World Climate Conference in Geneva. Trinidad and Tobago was a founding member, and AOSIS, a critical negotiating alliance at COP, is now 39 members strong.
“Loss and Damage” formally entered the negotiations in 1991 with a proposal from AOSIS for the UN Framework Convention on Climate Change (UNFCCC). It included a particular request for “industrialised” nations to pay for the “loss and damage” that would harm vulnerable small island nations due to rising sea levels. Ultimately, the proposal did not make it into the UNFCCC, but the nearly three-decades-long negotiations began.
It took until 2015 at COP21 for “Loss and Damage” to be formalised within Article 8 of the Paris Agreement, which is distinct from previous references to adaptation. Successive COPs included more debates, negotiations, and work plans, but there was little progress on financing “Loss and Damage.”
At COP26 in Glasgow, G77 plus China, a negotiating block at the United Nations representing six out of seven people globally, called on wealthy countries with the largest greenhouse gas emissions to pledge money for Loss and Damage. The United States, the European Union, Australia, and others opposed it. Instead, the Glasgow Climate Pact and the Glasgow Dialogue were formed to move forward on a path and process for “Loss and Damage” financing.
Fifty-five vulnerable countries estimated their combined climate-linked losses over the last two decades totalled about $525 billion, or about 20% of their collective GDP, based on a report in June 2022. Research suggests that by 2030, such losses could reach US $580 billion per year.
What happened at COP27?
Closing plenary at COP27 in Sharm el-Sheikh, Egypt on November 19th, 2022 (UNFCCC/Kiara Worth)
After three decades of making the first call for “Loss and Damage,” United Nations parties agreed to establish the fund at Sharm el-Sheikh, Egypt.
Specifically, the European Union agreed to create the Loss and Damage Fund on the condition that large economies and emitters are considered potential donors, even where they are technically classified as developing nations under the UNFCCC.
Parties also agreed to establish a fund for Loss and Damage as part of broader funding arrangements or a “mosaic of solutions” inside and outside the UNFCCC. Separately, the Santiago Network for Loss and Damage (Santiago Network) was established, and a process for selecting the host organisation was determined.
Loss and Damage fund pledges that were made at the start of COP28 during the opening plenary.
In a landmark decision, the Loss and Damage fund was adopted in the opening plenary of COP28. The United Arab Emirates was the first pledge to the fund, announced by Foreign Minister Sheikh Abdullah Bin Zayed of US $100 million. The European Union has also announced an aggregate pledge of €220 million, which includes a commitment from Germany of US $100 million.
The United Kingdom pledged up to £60 million for the Loss and Damage fund. However, in their statement, up to £40 million would be specifically for the Loss and Damage fund, while up to £20 million would be used for the “funding arrangements and the Early Warnings for All Initiative.”
John Kerry, the United States Special Presidential Envoy for Climate, also pledged US $17.5 million to the Loss and Damage Fund, US $4.5 million to the Pacific Resilience Facility, and US $2.5 million to the Santiago Network. Japan has also pledged US $10 million to the Loss and Damage fund on Thursday afternoon in Dubai.
By mid-2024, the World Bank will confirm whether or not it will act as the interim trustee and host of the funds pledged. If it does with specific conditions agreed to, it has a four-year interim period as the host and trustee of the Loss and Damage fund, which can become permanent toward the end of the four years. If it does not, the UNFCCC will look for a host country for the fund and develop it as an independent, standalone institution. Similar to the World Bank outcome, if conditions are met, the independent, standalone institution proceeds, but there may be further delays for operationalisation (i.e. countries to access the funds when needed.)
T&T’s position on Loss and Damage
Kishan Kumarsingh at the Latin American and Caribbean Climate Week 2023 (UNFCCC)
Historically, T&T has always supported the call for a Loss and Damage fund, being part of AOSIS and the G77+China negotiating blocs within the UNFCCC system.
Last year, Trinidad and Tobago’s Minister of Foreign and CARICOM Affairs, Senator Dr Amery Browne, reaffirmed the country’s position at the United Nations General Assembly. Minister Browne said, “Trinidad and Tobago calls for the full and effective implementation of the Paris Agreement. A dedicated facility to address Loss and Damage under the UNFCCC Financial Mechanism is an absolute necessity. These actions must be prioritised because what is at stake is the very existence and viability of small island States.”
In a recent interview with Guardian Media, the lead climate negotiator for T&T and the head of the Multilateral Environmental Agreements at the Ministry of Planning and Development indicated that part of his wish list for COP28 included the full operationalisation of the Loss and Damage fund, which has now come to pass.
However, he still had one concern. “If the Loss and Damage fund looks anything like the Green Climate Fund, and by that, I mean it’s, you know, tapered with red tape, it’s very difficult to access for those who need it most. Then it becomes a very bureaucratic fund that is very difficult for small island and developing states to access,” Kumarsingh said.