High road to Dubai COP28: Can Bonn climate conference iron out disagreements around loss & damage fund

Subject :Environment

Section: International convention

Context:

The discussions around making the Loss and Damage Fund (LDF) fully operational by the 28th Conference of Parties (COP28) to the United Nations Framework Convention on Climate Change (UNFCC) seem to be heading in the wrong direction due to divergent views about the scope, scale and sources of the fund among developed and developing countries.
The Subsidiary Body (SB) conference at Bonn could be an opportunity for course correction to COP28, which will be held in the United Arab Emirates (UAE).

About the Bonn climate conference (BCC):

The Bonn Climate Change Conference is scheduled from 5 to 15 June 2023.
Building on the mandates that emerged from COP 27 in Egypt, the conference will host a large number of mandated events and continue discussions on issues of critical importance, such as the global stocktake, global goal on adaptation, just transition, loss and damage and the mitigation work programme.
The conference is expected to make progress on these and other important issues and prepare draft decisions for adoption at COP 28 / CMP 18 / CMA 5 in the UAE in December 2023.

About Loss and Damage Fund (LDF):

Loss and damage refer to the negative consequences that arise from the unavoidable risks of climate change, like rising sea levels, prolonged heatwaves, desertification, the acidification of the sea and extreme events, such as bushfires, species extinction and crop failures.
As the climate crisis unfolds, these events will happen more and more frequently, and the consequences will become more severe.
The 2022 Adaptation Gap Report indicates that international adaptation finance flows to developing countries are five to ten times below estimated needs, and will need over US$300 billion per year by 2030.
Loss and damage finance needs are closely connected to our ability to mitigate and adapt to climate change.
At COP 26 and 27 philanthropies and country governments pledged funds for loss and damage.
LDF was brought into existence at COP27 in Sharm El Sheikh, Egypt.
The funding sources should be expanded to include innovative sources such as taxes and levies in line with the principles of equity and common but differentiated responsibilities.
- This could include taxes on Shipping and aviation sectors and contributions from historical emitters of greenhouse gases.

Transitional committee (TC):

Among the 24 members of a Transitional Committee (TC) that was formed in March, 14 are from developing countries, and 10 are from developed countries.
The committee’s formation was mandated by the decision text on LDF agreed upon at COP27, and its function was to make recommendations to COP28 towards the full operationalisation of the LDF.
Decisions taken at the first meeting of TC:
- Members of the committee decided on the importance that should be given to funding arrangements outside of the UNFCCC process, such as the Global Shield being led by the V20 group of vulnerable countries and the G7 group of developed countries.

Issues with the present situation of climate funds:

The most affected by extreme weather events are also the least responsible for thegreenhouse gas emissions that have caused the planet to warm by 1.1°C and changed major aspects of its climate, including extreme weather events.
The current sources of climate finance are mostly loan based, which increases the debt burden of developing countries that are already facing development challenges.
LDF should also act as an oversight mechanism which would monitor the activities undertaken by the fund and assess if they have their intended impact.
Hence its governance is of utmost importance, which is being considered to be under the Santiago Network for Loss and Damage, which already has the mandate to advise countries on the technical aspects of Loss and Damage.
- Vision of the Santiago network: Catalysing technical assistance of relevant organizations, bodies, networks and experts, for the implementation of relevant approaches for averting, minimising and addressing loss and damage at the local, national and regional levels, in developing countries that are particularly vulnerable to the adverse effects of climate change.
A separate and new LDF with its own governance is the need of the hour.