The Loss and Damage Fund should become operational at the Cop28 in Dubai in December
Nine months after COP27 in Sharm el-Sheikh, the commission in charge of creating the new Loss and Damage Fund has given birth to the most important number of all. At least 100 billion dollars a year. Figure to reach by 2030. This is the (provisional) request to address the losses and damage caused by the climate crisis in the poorest and developing countries. This money, as is already the case with the climate finance instrument created in 2009, must come from countries with the most advanced economies. That for the rules of the UN Framework Convention on Climate Change, written in the early 1990s, correspond substantially with what we call the West.
What does the new Loss and Damage Fund point to?
The 14 members of the commission, called to follow up the historic decision of the last Cop to create a support mechanism for so-called loss & damage, have made public the preliminary version of the document that contains the objectives and rules of the Loss and Damage Fund and that must be approved in 3 months at the Cop28 in Dubai.
“The Fund should be able to plan at least $100 billion a year by 2030,” reads point 23 of the document. The value “should potentially increase” and “is not intended as a ceiling but rather as a minimum commitment“, specify the extenders. Then there is an important phrase, which will probably cause much discussion in Dubai: “The Fund should be ready to adapt to the new realities of climate change with the growing trajectory of losses and damage”. It calls, in essence, for a mechanism to be incorporated into the Fund to revise the target upwards in a manner consistent with the course of the climate crisis.
How was the figure of $100 billion calculated? The document explains this in a note. Derived from estimates contained in a report by the Independent High-Level Expert Group on Climate Finance, a group of independent experts who published in November 2022 a study commissioned by the UN on how to adapt climate finance to the new reality of climate change. The previous target – $100 billion a year by 2020 for mitigation and adaptation – is considered too low, now completely exceeded by the level of global warming achieved, as well as being misaligned by the real needs of the countries receiving the funds (which mainly feed mitigation interventions, useful for donor countries, instead of adaptation, crucial for receiving countries). In that study, it is estimated that losses and damage could be between $150 billion and $300 billion a year by 2030 to meet immediate needs and reconstruction.