The Loss and Damage Fund is a tool that originated a year ago in Sharm el-Sheikh in its most embryonic form. However, it is up to the COP in Dubai to develop its specifics and operational details. To understand the challenges of the present, it is useful to look back and analyze how we came to talk about this fund.
By Federica Baldo
One of the five major thematic pillars around which the political agenda of COP28 revolves is the so-called Loss and Damage Fund. The origin of this measure dates back to the 27th Conference of the Parties held last year in Egypt, where reaching an agreement on this issue was considered the major milestone of that edition. The fund in question was developed as part of the so-called adaptation policies to climate change, a category of measures aimed at addressing the consequences of climate change that we are already grappling with and have not been able to prevent. We are talking about an intervention downstream, not upstream of the problem.
What does it practically entail?
In Egypt, all the Parties to the Conference agreed to establish a financial fund specifically for the least developed countries, economically supporting them in the costly process of adapting to climate change as nations most affected by its effects. The goal is to help the world’s poorest countries financially cope with the repair of losses and damages inflicted on their human and natural systems by global climate alterations.
How was this agreement reached?
The achievement of this decision was made possible by the extraordinary determination with which the G77+China group approached the negotiation tables and the extremely cohesive and strong position through which it asserted its demands. Such internal cohesion within the group of global developing countries was seen in Sharm el-Sheikh for the first time in the history of the Conference of the Parties. In this regard, the role played by the Alliance of Small Island States (AOSIS) since 1991 in the persistent request for such a financial mechanism has led and guided the achievement of this historic turning point.
The presentation of the issue as a make-or-break matter, whose outcome determined the fate of the entire conference, and the support from civil society and the media for the cause were extremely decisive factors. All of this contributed to the narrative that the decision regarding the fund was the crucial turning point of the entire COP27, thus pushing the group of developed countries (G20) toward consensus.
A decision left halfway (or even less)
As already anticipated, the 27th edition decreed the need to establish a fund, without delving into the formulation of any structural and procedural specifics. All these very thorny but vitally relevant aspects for the existence of the fund, which were effectively left unresolved in Egypt, will be on the negotiation tables of COP28 in Dubai this year. The 28th Conference of the Parties will open with a dense agenda of objectives, among which stands out the need to concretely translate and finally operationalize this idea of a still embryonic, intangible, and inconsistent fund.