The 2022 United Nations Climate Change Conference or Conference of the Parties of the UNFCCC, more commonly referred to as COP27, made a landmark decision to establish a ‘Loss and Damage Fund’ at Sharm El Sheikh, Egypt in 2014. The decision considered a vital ‘third pillar’ in climate action, ignited hope among the Global South nations who have been facing the brunt of climate-induced disasters – from searing heatwaves to floods to supercharged storms or rising sea levels.
The term, Loss and Damage captures the irreversible harm climate change has inflicted on human society and our planet’s fragile ecosystems. Such damage is a direct consequence of inadequate mitigation, insufficient adaptation and scenarios that exceed their current adaptive capacities. The fund is meant to assist communities in recovering from climate-induced disasters.
India, ranking seventh on the Global Climate Risk Index 2021, grapples with significant climate challenges. Predictions by the Overseas Development Institute suggest a potential annual GDP reduction of 3% to 10% by 2100 due to climate impacts. The Intergovernmental Panel on Climate Change further cautions close to 40% of Indians may face water shortage by 2050.
The stark reality is that the wealthiest nations, accountable for an overwhelming 79% of all historical carbon emissions until the last decade, owe a considerable debt. The Global South—communities least responsible for this crisis—find their livelihoods devastated due to the unrestrained expansion of the planet-heating fossil fuels—gas, oil and coal— led by the Global North.
After three relentless decades of advocacy, a glimmer of hope appeared in the form of a Loss and Damage Fund. However, turning this decision into concrete action has proven challenging. The Transitional Committee (TC) set up by the UN to operationalise the fund has faltered in drafting their recommendations despite a series of meetings. This setback underscores the deep divide between wealthy and developing nations.
Civil societies say the breakdown of talks is a result of the developed countries’ reluctance to engage constructively on these issues.
Developing nations argue for the Loss and Damage Fund to operate independently under the UN, while richer nations want it hosted by the World Bank—an institution criticised for exacerbating both climate change and global inequalities. These affluent countries aim to restrict the fund’s scope to low-income and island nations, sidelining the vulnerable communities in the process and attempting to fragment the solidarity of developing nations. Moreover, affluent countries resort to financial manoeuvres, such as predominantly offering loans instead of grants for climate finance. They intend to apply the same approach for Loss and Damage finance, despite being fully aware that such debt-oriented strategies exacerbate the very issues they claim to address.
These intentions are getting exposed at a time when studies are predicting that Loss and Damage expenses could soar to between US$290 billion and $580 billion annually for developing nations by 2030.
Developed countries are unwilling to establish systems for new, additional, predictable and adequate resources; and are avoiding discussions on immediate capitalisation of the Loss and Damage Fund.
India served as a member of the TC at the inaugural meeting and has since acted as an observer in subsequent engagements. India should hold developed nations accountable for their historical obligations and exert pressure on them for action.
An additional meeting is scheduled for November 3-4, hosted by the COP28 Presidency in Abu Dhabi, with the goal of breaking the deadlock and reaching a consensus before the climate conference this December.
Communities at the heart of this climate catastrophe merit genuine support, not evasion. Rich nations must recalibrate their approach at the earliest; otherwise, the world will not only remember but also rebuke their legacy of climatic apathy and injustice.
By Harjeet Singh
The writer is the head of Global Political Strategy at Climate Action Network International and the Global Engagement Director at the Fossil Fuel Non-Proliferation Treaty initiative. He co-founded a social enterprise, Satat Sampada