LOSS AND DAMAGE FUND - ENVIRONMENT
News: Delegates at the U.N.'s climate conference in Sharm el-Sheikh, Egypt thrashed out an agreement on November 20 to establish a ‘Loss and Damages’ fund to compensate the most vulnerable countries for damages from climate-linked disasters.
● It was an unequivocal confirmation that poor countries, with limited resources, are being most impacted by extreme weather events like floods, heat waves and storms and, at least at some level, industrialized nations that have done the most to contribute to climate change have a responsibility to help.
History:
●
In the early 1990s, the Alliance of Small Island States, a
group of low-lying coastal and small island countries, began calling for the
establishment of a loss and damage fund as the United Nations was creating a
framework to deal with climate change on an international level. Since then,
the idea has always been a part of annual U.N. climate summits.
● However, it was often talked about on the margins of negotiations, something developing nations and activists would push for while many rich nations used their weight to squash the idea. For the first time, at this year’s COP27, it was included in the agenda and became the centerpiece of discussions.
About the fund:
● Financing or a new fund to deal with loss and damage. For example, money needed for relocating people displaced by floods - was a long-pending demand of poor and developing countries, including India.
Some critical questions:
●
Crucial questions - such
as who will manage this fund, whether
contributions are expected from large developing countries and what the fair
share of contributors will be - have been left to a “transitional committee”
that will make recommendations to enable the actual adoption of the fund at the
next Conference of the Parties (COP) of the U.N.’s Framework Convention for Climate Change, to be held in the
United Arab Emirates next year.
●
The agreement and pledges
made on loss and damage aim to unlock greater ambitions for mitigation and
adaptation.
●
During COP27, financial
pledges for loss and damage funding came from multiple countries, including
Austria, Belgium, Canada, France, Germany, and New Zealand, joining Denmark and
Scotland, which had made pledges previously.
●
The expected monetary
compensation from the L&D fund is estimated to be nearly $500 billion and
rising by $200 billion annually,