COP28 commences: Hopes high for consensus on loss and damage fund operations

The latest United Nations meeting has commenced in Dubai, with high expectations for its successful inauguration. As the meeting begins, nations worldwide are prepared to agree on the operational details of the Loss and Damage Fund. This fund was established to assist vulnerable countries in dealing with extreme weather events caused by global warming.

If consensus is achieved, it would mark a significant success for the ongoing COP28 in Dubai. However, the question remains: Will COP28 reach an agreement on the operation of the Loss and Damage Fund?

The responsibility lies with affluent countries to contribute financially to the fight against climate change, as it is already late for action. All eyes are on COP28 to build upon the progress made by the global community regarding the Loss and Damage Fund announced in Sharm el-Sheikh last year. A report by the Transnational Committee of the United Nations Framework Convention on Climate Change (UNFCCC) in September acknowledged “significant progress” in establishing funding mechanisms. However, it remains to be seen whether this will lead to any major announcements.

The UNFCCC website says COP28 President-designate and UAE Special Envoy for Climate Change, Sultan Ahmed Al Jaber, called on countries to be creative in identifying funding sources and defining financing arrangements to ensure To ensure that funds are adequate and distributed efficiently. Therefore, while Egypt's long-standing demand for a Loss and Damage Fund for climate mitigation was met in November 2022, the distribution of funds and the establishment of a mechanism for contributions to the fund remains a complex issue.

What is Loss and Damage Fund?

Loss and Damage Fund is a type of compensation package where rich countries have to pay the costs of damages to developing countries. The Conference of Parties (COP) member states have agreed to establish such a fund after an arduous journey of almost three decades.

How did idea of ​​Loss and Damage Fund come about?

The groundwork for the Loss and Damage Fund was laid during the Paris Agreement at COP21 in 2015. This was the first time that affluent countries acknowledged the need to recognize losses and damages caused by extreme weather events at COP21.

However, this acknowledgment did not lead to any concrete compensation beyond climate action funding, and the resources provided were still insufficient. The expectation was that the Loss and Damage Fund would be established approximately seven years later at COP27 in Egypt, but this did not materialize.

India, representing the Global South, has been a significant advocate for the Loss and Damage Fund. Other organizations, such as the Alliance of the Small Island States (AOSIS), an intergovernmental organization advocating for environmental policies, have also played a role in promoting the concept.

As one of the most powerful countries in the UN, the United States has the most far-reaching influence on UNFCCC decisions, particularly those related to financial payment commitments to developing countries. Conversations around the Loss and Damage Fund declined significantly during the tenure of President Donald Trump, who was described as a climate change denier.

Relevance of Loss and Damage Fund

The University of Delaware has analyzed this fund and explained what should be kept in mind for the operation of this fund. According to this analysis, this report looks at how climate change is affecting the world's money and economies. This shows that climate change is particularly causing problems for poor countries and hot regions. The report says that rich countries should help poor countries deal with these issues.

Globally, in 2022, climate change has already reduced the world's gross domestic product (GDP) by 6.3%. But this effect is not the same everywhere. Rich countries are less affected, and some even benefit, from climate change. But poor countries, especially in Southeast Asia and Africa, have been hardest hit, losing 14.1%, 8.1% and 11.2% of their wealth each year, respectively.

The report said that developed countries suffer little loss or gain, while the least developed countries lose 8.3% of the wealth. This worsens global inequality, and it calls for plans to help developing countries deal with this unfair burden.

The report also talks about how climate change affects money and the things we own. Rich countries may not suffer much, but others, such as low- and middle-income countries, stand to lose a lot. This makes it difficult for them to grow and stay strong.

This report is helpful to leaders and groups around the world, especially as they prepare for COP28. It uses a mix of research methods to understand how much money and things are lost due to climate change.

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