Decades after the initial calls for its creation, an agreement for a Loss & Damage Fund to fund the climate damages for developing countries was finally reached. Since late November 2022, the fund and its subsequent “transitional committee” have taken a long, conflict-filled journey to release its first draft document on the opening day of COP28.
This blog will provide a brief history of the L&D fund from its first proposal to the recommendations submitted by the COP28 transitional committee. It will provide live updates on the development of the fund during COP28.
Ban Ki-moon (former secretary-general of the United Nations) addressing the audience at COP19
JANEK SKARZYNSKI/AFP/Getty Images
Brief History
The concept of an L&D fund was first proposed by delegates of the Alliance of Small Island States during the Second World Climate Conference in Geneva. The AOSIS delegates asked for funding support for damages caused by sea level rise, with funding determined by each country's relative contributions to global carbon emissions. The proposal was meant to be an institutionalized funding mechanism to be part of the newly crafted United Nations Framework for Climate Change. The proposal was rejected, with the final text for the UNFCCC and the Rio 1992 declaration containing no mention of Loss & Damage.
At COP 19 in 2013, the was established to begin deliberating risk management strategies and financial mechanisms associated with climate damage in developing countries. To note, its creation came only after the walkout of developing countries. For the next nine years, the committee in charge of the Warsaw mechanism would make annual recommendations to the COP parties on technical assistance related to L&D, but importantly made no recommendations on liability or compensation. At COP25 in 2019, the Santiago Network was established as an extension of the Warsaw Mechanism to “catalyze the technical assistance” of organizations involved in L&D.
Developed nation representatives huddled at TC5, a final emergency meeting called by the committee due to a lack of consensus after the first four meetings. (Liane Schalatek)
COP27 and the Transitional Committee
After COP27, the countries of the UNFCCC reached an agreement to establish and operationalize an L&D fund, which included the creation of a transitional committee to determine different aspects of the fund, such as:
Determining sources for the fund
Coordination with existing financing
Institutions that will manage the fund
What would ensue over the next year would be a contentious set of committee meetings, with developing and developed nation representatives staunchly disagreeing on the terms for the L&D Fund. The main points of contention included:
The involvement of civil society on the management board
Private contributions to the fund
The hosting institution of the fund
Funding targets for developed countries
The ending recommendation from the transitional committee was nothing short of disappointing for developing countries and climate activists. The recommendations from the committee included the World Bank being the hosting institution, a board that does not include a spot for civil society and no definitive funding targets for developed nations.