The decision to establish a Loss and Damage fund, which will support developing countries in their efforts to avoid, minimize, and address loss and damage associated with the adverse effects of climate change in light of continued global warming, was made on Sunday morning at the UN Climate Conference (COP27) in Egypt's Sharm El Sheikh.
The conference, which saw polarised debates on responsibility and accountability among the global North and South, made history.
Environmental experts hailed the recognition of the effects of climate change, in particular, the warming of 1.1 degrees C to date, on people's lives and livelihoods as a significant development. The decision on the Loss and Damage Fund states that limiting future loss and damage will depend on keeping the increase in the global average temperature below 1.5 degrees Celsius.
It also expresses alarm over Working Group II's finding in the Sixth Assessment Report of the Intergovernmental Panel on Climate Change that the severity, scope, and frequency of loss and damage will continue to rise with each additional fraction of a degree of temperature rise.
In order to decide the mechanisms, sources, and other factors that will be discussed at COP28 in November-December 2023, it has been decided to create a transitional committee. The 23-member Transitional Committee will be made up of 10 members from Parties in wealthy countries and 13 members from Parties in developing countries.
Committee will take into account:
(a) establishing institutional arrangements, modalities, structure, governance, and terms of reference for the fund
(b) outlining the components of the new funding arrangements
(c) locating and extending sources of funding
(d) ensuring coordination and complementarity with existing funding arrangements.
One of the key arguments on the Loss and Damage Funding Issue was that developed countries were attempting to confine the beneficiaries to only the most disadvantaged while simultaneously expanding the donor base to include high income countries and growing economies like China and India (island nations and least developed countries).
In addition, the EU had aimed to tie the establishment of the Loss and Damage facility to mitigation measures such peaking global emissions before 2025; reinforcing the need to cut non-carbon dioxide greenhouse gas emissions by 2030, such as methane.
Reports had emerged on November 18 that the United Nations was pressuring all parties to urgently step up their efforts to close the remaining mitigation gap to pathways consistent with 1.5 degrees; speed up the phase-down of unabated coal power as soon as possible; and submit roadmaps towards this goal. But after late-night discussions and attempts to reach an agreement, the interim committee has now been given responsibility for handling the funding source issue.
