Central Idea

In the escalating climate crisis, the terms “adaptation” and “loss and damage” (L&D) have taken center stage.
While the concept was embraced at COP 27, recent meetings of the Transitional Committee (TC) to operationalize the fund have encountered major roadblocks.

Birth of the L&D Fund

Historic Pollution Accountability: The call for affluent nations to acknowledge their historical pollution accountability dates back over 30 years.
COP 19 Agreement: In 2013, at COP 19 in Warsaw, Poland, member countries formalized the creation of the L&D fund. It aimed to provide financial and technical support to economically developing nations grappling with L&D due to climate change.
Subsequent Developments: COP 25 introduced the Santiago Network for L&D, and COP 26 established the Glasgow Dialogue on finance for L&D. COP 27 in November 2022 saw the creation of the L&D fund and a Transitional Committee (TC) tasked with operationalizing the fund.

Contentious Issues: TC meetings have grappled with contentious issues such as hosting the fund at the World Bank, the principle of common but differentiated responsibilities (CBDR), climate reparations, and eligibility criteria for developing nations.
Developed vs. Developing Nations: These disagreements have deepened the divide between developed and developing nations, hampering progress.

TC4 Impasse: The fourth meeting of the TC concluded without a consensus on how to operationalize the L&D fund, reflecting divisions on key issues.
TC5 Draft Recommendations: An impromptu fifth meeting of the TC led to draft recommendations forwarded to COP 28. Developing nations conceded to the fund being hosted by the World Bank temporarily, but developed nations, including the U.S., remained non-committal regarding primary donor status and rejected references to CBDR, equity, and liability in the draft.
Lack of Clarity: The draft does not specify the fund’s size due to pressure from certain developed nations.

Erosion of Trust: The outcome underscores a severe trust deficit between affluent and emerging economies concerning historical responsibilities, deepening the rift between wealthy and impoverished nations.
Failure to Fulfill Commitments: The unwillingness of wealthy nations to fulfill intended commitments undermines global climate negotiations, cooperation, and climate justice.
Humanitarian Consequences: The watering down of the L&D fund can lead to humanitarian crises, food shortages, displacement, conflict, and exacerbate the suffering of vulnerable communities.
Economic and Environmental Impact: It also has economic consequences, with potential financial crises and environmental degradation, exacerbating global economic instability.
Security Implications: Climate-induced instability may lead to security implications as conflicts emerge in vulnerable nations, threatening to spill across borders.

Balancing Adaptation and L&D: Adaptation and L&D are not mutually exclusive but coexist on the continuum of climate resilience.
Moral and Financial Responsibility: Addressing L&D is a moral and financial responsibility of affluent nations, ensuring climate justice, equity, and solidarity.
Global Climate Action: Failure to meet these obligations can derail global climate action, adding pressure to future COP talks.

The protracted impasse surrounding the Loss and Damage fund reflects a troubling lack of consensus and trust between nations, hindering climate justice and cooperation.
As the world grapples with the consequences of climate change, balancing adaptation and addressing L&D remains paramount.