‘Loss and damage’ fund talks leave developing nations at new disadvantage

‘Loss and damage’ fund talks leave developing nations at new disadvantage

Subject : Environment

Section: Climate Change

Context:

• As the climate crisis intensifies, two terms are in sharp focus: adaptation and ‘loss and damage’ (L&D).

Details:

• Adaptation is the proactive response to climate change, the art of survival using which communities and countries make deliberate choices to prepare for and cope with climate-related challenges.
• L&D represents the irreversible consequences of climate change: impacts that can’t be avoided or mitigated through adaptation efforts. They encompass the real losses that extend beyond monetary value and cut to the core of human rights and well-being. L&D includes economic losses, human casualties, and the degradation of ecosystems and cultural heritage.

Genesis of the L&D fund:

• Historic pollution from Developed Countries has elevated the world’s average surface temperature by more than 1 degree Celsius and is currently inflicting damage worldwide, but especially in the poorest nations.
• CoP19 of UNFCCC- 2013: held at Warsaw, Poland.
  • Countries agreed to formally establish the L&D fund.
  • It was being created to provide financial and technical assistance to economically developing nations that were incurring L&D due to climate change.
• CoP25 of UNFCCC: held at Madriad, Spain in 2019
  • The Santiago Network for L&D was set up, but countries didn’t commit any funds.
  • The vision of the Santiago Network is to catalyze the technical assistance of relevant organizations, bodies, networks and experts, for the implementation of relevant approaches for averting, minimize and addressing L&D at the local, national and regional level, in developing countries that are particularly vulnerable to the adverse effects of climate change.
• CoP26 of UNFCCC:held at Glasgow, U.K. in 2021
  • The Glasgow Dialogue on finance for L&D was established to continue discussions over the next three years on the fund.
• CoP27 of UNFCCC: held at Sharm El- Sheikh, Egypt in 2022
  • Members agreed to set up the L&D fund and a Transitional Committee (TC) to figure out how the new funding mechanisms under the fund would operate. The TC was also to prepare recommendations that countries would consider, deliberate on, and potentially adopt by COP 28.
• The L&D fund was conceived as a critical component of global climate action, recognising that some of the consequences of climate change are irreversible and beyond the capacity of vulnerable nations to handle.

Transitional Committee (TC) meetings:

• So far, four meetings of the TC have concluded with no clear recommendations.
• The principal bones of contention had to do with hosting the fund at the World Bank, the foundational principle of common but differentiated responsibilities (CBDR),climate reparations, and the eligibility of all developing nations for the funds.
• At the TC5 meeting, developing nations conceded to the fund being hosted by the World Bank Financial Intermediary Fund for an interim period of four years, serviced by a new dedicated and independent secretariat. While the World Bank is yet to confirm.
• Developed countries including the U.S., have remained non-committal about being primary donors to the fund.

Consequences:

• The unwillingness of wealthy nations to fulfil intended commitments undermines faith in global climate negotiations and hampers the cooperative spirit necessary to address climate change.
• It threatens climate justice and exacerbates the suffering of vulnerable communities in developing nations in the form of food shortage, people displacement, and conflict, and force communities to cope independently with a worsening climate and its consequences.
• The financial crises and economic downturns in one region can have extensive repercussions due to the interconnectedness of the global economy.
• Security implications as well as conflicts and tensions emerge in vulnerable nations and threaten to spill across borders.

Source of this article: The Hindu