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In Cop 28 - Dubai, Loss and damage funds means wealthy states and major polluters will put millions of dollars towards a fund that will in turn distribute funds to poor states harmed by climate change.
What is loss and damage (L&D) fund
A healthy L&D fund, a three-decade-old demand, is a fundamental expression of climate justice.
The L&D fund is a corpus of money and technologies that will be replenished by developed countries and used by the rest to respond to the more unavoidable effects of climate change.
On the first day of the COP28, representatives of the member-states agreed to operationalise the L&D fund.
Four meetings of the Transitional Committee (TC) were to follow to determine how its money would be disbursed.
But the issues in the TC-4 meeting, which spilled over into an ad hoc TC-5 meeting as well, highlight how the newly operationalised fund, while signalling optimism at COP28 and a diplomatic victory for its Emirati president, has crucial issues.
First, it will be hosted by the World Bank for an interim period of four years and will be overseen by an independent secretariat.
Developing countries resisted this proposition at first before yielding at the TC-5 meeting, in exchange for some concessions.
Second, while some countries have committed amounts to the fund — from $10 million by Japan to $100 million each by Germany and the UAE — whether they will be periodically replenished is not clear.
The committed amounts are also insufficient, totalling $450 million against an actual demand of several billion dollars.
The contributions are voluntary even as every country has been invited to contribute.
Finally, the World Bank will have to meet some conditions on managing the fund.
A degree of transparency it has not brooked so far, and submit a report to the Parties to the Paris Agreement.
If its stewardship is determined to be unsuitable, the fund can ‘exit’ the World Bank.
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