There is an urgency for the loss and damage fund to become a reality as many developing countries are impacted due to climate change. Credit: Busani Bafana/IPS
By Busani Bafana
BULAWAYO, Apr 14 2023 – In March 2023, more than 600 people died in Malawi after Tropical Cyclone Freddy dumped heavy rain, flooding the southern part of the country, displacing over half a million people, and damaging property and livelihoods.
The Malawi disaster is a stark example of “loss and damage” – the negative impacts of human-caused climate change that is affecting many parts of Africa.
Last November, COP 27 achieved a historic agreement to establish a dedicated Fund for damage, and the growing negative impacts of climate change highlight the urgency of financial support to address loss and damage for vulnerable countries.
Climate finance now
Malawi, like many developing countries, neither has the capability nor the capacity to defend itself against climate change events such as floods and droughts that are increasingly experienced across the African continent.
The need for climate action in tackling loss and damage is articulated in Article 8 of the Paris Agreement, which recognizes the “importance of averting, minimizing and addressing loss and damage” associated with the adverse effects of climate change.
Loss and damage have taken centre stage in all UN climate discussions for more than 30 years, championed by the Pacific island state of Vanuatu, itself threatened by climate change. Recently Vanuatu led a global campaign for the International Court of Justice to give an advisory opinion on states’ legal obligation for climate action and making them liable for climate failures.
Nearly 200 countries meeting at the annual Conference of the Parties to the IPCC in Sharm El Sheikh last November agreed to establish a “loss and damage” fund to help poor countries, many suffering adverse weather events. The establishment of the Fund comes after spirited resistance by developed countries on taking responsibility for causing climate change through their historic carbon emissions.
Africa has suffered the brunt of climate change impacts even though it contributes a minuscule amount to global carbon emissions. From tropical cyclones in Malawi, Mozambique and Madagascar, flooding in Nigeria, Uganda and South Africa to devastating drought in the Horn of Africa.
Pakistan’s climate minister Sherry Rehman, whose country was hit by heavy floods that killed more than 1,000 people and damaged property worth billions of dollars, described the decision to establish the Loss and Damage fund as a “down payment on climate justice”.
However, climate justice may be denied than delayed for many vulnerable countries like Pakistan and Malawi, given divisions on the operationalization of the new funding arrangements for Loss and Damage and the associated fund – key issues that formed the agenda of the first meeting of the Transitional Committee.
The Transitional Committee established at COP27 comprises 10 members from developed countries and 14 members from developing countries. It met in Luxor, Egypt from 26-29 March 2023 to ‘present recommendations on the institutional arrangements, modalities, structure, governance, and terms of reference for the Loss and Damage fund’.
Furthermore, the Committee discussed the elements of the new funding arrangements; and identified and expanded sources of funding. In addition, the coordination and complementarity with existing funding arrangements on climate change formed the agenda of the meeting.
While the initial meeting has been described as successful, there were no agreements on the key questions as to who will finance the fund and who qualifies for the funding under the fund. However, Mohamed Nasr, Egypt’s lead climate negotiator, told an online media briefing that there was agreement on a road map to establish the fund, at least by COP28, to be held in the United Arab Emirates in November 2023. Nasr was optimistic, stating:
“Will it be created? I hope so and assume so, and this is what we are working towards.”
Nasr further explained that there was a movement forward in the understanding of how to deal with these contentious issues by the next Meeting of the Transitional Committee. Not much to go with but Nasr noted that:
“By the next meeting, there will be another stocktake of what we agreed to do … I hope it will deliver in UAE”
The Transitional Committee should tackle three issues on Loss and Damage funding key before COP28, which include what type of fund, the boundaries of the fund and where the money will come from, experts from the World Resources Institute (WRI) argue in a commentary.
“The fund and funding arrangements need to ensure their ability to help vulnerable countries which are experiencing the brunt of climate impacts,” Preety Bhandari and five other authors in an insight paper on finance.
“They must consider the continuum between loss and damage and adaptation and how funding can also enhance future adaptive capacity,” the experts said, noting that loss and damage was intrinsically linked to adaptation, with increased adaptation leading to less loss and damage.
Asked if the meeting had a clear understanding and achieved what it had set to do, Nasr said:
“I would say it partially happened because the meeting has a lot of different topics for decision. What we want to achieve is already agreed upon among the parties, be it on funding arrangement, be it on complementarity, be it on the resources of the Fund … we moved forward on the understanding of how we are going to deal with them between now and the next Transitional Committee meeting.”
Counting loss and damage
Loss and Damage, according to the climate talks, refers to costs being incurred from climate-fuelled impacts such as droughts, floods, extreme heat, rising sea levels and cyclones.
UN chief António Guterres described loss and damage as a “fundamental question of climate justice, international solidarity and trust” during the 2022 UN General Assembly, stating that “polluters must pay” because “vulnerable countries need meaningful action”.
Scientist and director of the International Centre for Climate Change and Development (ICCCAD), Saleemul Huq, says the agreement to set up the Loss And Damage Fund was a major breakthrough for the vulnerable developing countries who had been demanding it for many years highlighting that Parties to the UNFCCC have now agreed to find ways to provide funding to the victims of human-induced climate change who are suffering losses and damages.
Huq is confident that if all countries proceed in good faith, the Fund – which is based on shared responsibility and voluntary contributions – could become formalized and operational at COP28 in Dubai in November 2023.
“We will need to find innovative sources of funding for Loss and Damage such as making the polluting companies (not countries) pay from the exorbitant profits they are making from their pollution,” Huq said to IPS.
Research by the United Nations Environment Programme (UNEP) shows a big financial gap for adaptation. The 2022 Adaptation Gap Report indicates that international adaptation finance flows to developing countries are five to ten times below estimated needs and will need over USD 300 billion per year by 2030.
“It is important that a Loss and Damage Fund tackles the gaps that current climate finance institutions such as the Green Climate Fund do not fill,” the UNEP notes, highlighting that combined adaptation and mitigation finance flows in 2020 fell at least USD 17 billion short of the US$100 billion pledged to developing countries at COP19 in Copenhagen,
UNEP said for the fund to be effective, the root cause of climate change must be tackled – and that involves reducing emissions and finding more resources for mitigation, adaptation and loss and damage.
While the deliberations continue on the arrangement of loss and damage and, more critically, the financing of a deliberate Fund, communities in vulnerable countries like Malawi do not have tomorrow; they have lost today, and the damage they have suffered is not undoable.
IPS UN Bureau Report
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