Loss and damages fund

Loss and damages fund

Subject: ENVIRONMENT

Section: CLIMATE CHANGE

Context: The term widely used in UN Climate Change negotiations broadly refers to the measure of losses and damages due to the negative impacts of the climate crisis.

More on the News:

• The damages from climate change are both economic and non-economic. In the case of the former, we can assign a monetary value, whereas the same does not apply to non-economic losses.
• Non-economic losses can range from the loss of cultural heritage and societal or cultural identity to the loss of biodiversity, ecosystem services and intergenerational trauma due to extreme climate events.
• The recently concluded COP27 in Sharm el-Sheikh, Egypt witnessed history in creating the “loss and damages” fund to assist the most vulnerable countries with damages from climate-linked disasters.
• The developments at COP27 have been welcomed by India, however, with the condition that only developed countries are obligated for such funding arrangements.
• India’s Union Minister for Environment, Forests and Climate Change expressed that India will seek funds from the facility, considering it is extremely vulnerable to climate change.

Loss and damages

• The Intergovernmental Panel for Climate Change (IPCC) definition for ‘loss and damage’.
  • The term ‘losses and damages’ refers to the economic and non-economic impacts of climate change, including extreme and slow onset events, in developing countries that are particularly vulnerable to the adverse effects of climate change. It’s destructive, irreversible, and cannot be addressed by mitigation and adaptation measures.
• Evolution
  • L&D was brought up as a demand in 1991 by the island country of Vanuatu, which was representing the Alliance of Small Island States (AOSIS).
  • Since the United Nations Framework Convention on Climate Change was formed in the early 1990s, loss and damage due to climate change have been debated.
  • The Least Developed Countries Group has long aimed to establish accountability and compensation for loss and destruction.
  • Warsaw International Mechanism on Loss and Damages (WIM)was founded in 2013 without funding after extensive pressure from developing countries.
  • At the COP26 in Glasgow, the G77, a coalition of 134 developing countries, and China, proposed the Loss and Damage Finance Facility (LDFF), a dedicated stream of finance to specifically address losses and damages.
  • It is finally approved in CoP 27, at Sherm-Al- Sheikh, Egypt.