COP 28 climate conference: Historic loss and damage fund operationalised

On November 30^th, attendees from governments around the world signed an agreement to operationalise the ‘loss and damage’ fund (the official title of which has not yet been released) at the Conference of the Parties (COP 28) meet on climate change.

“Day one concluded with a historic agreement to operationalise the loss and damage fund and funding arrangements,” the United Nations Framework Convention on Climate Change said on its official @UNFCCC X channel.

According to the United Nations reporting service Earth Negotiations Bulletin, the agreement was signed by several of the world’s bigger G20 nations. The European Union pledged €225 million (roughly $245 million) to the new fund, €100 million of which came from Germany. In comparison, the United Arab Emirates pledged $100 million, the United Kingdom promised £60 million (roughly $75 million), the United States pledged $17.5 million and Japan pledged $10 million. 

What is the ‘loss and damage’ fund?

The ‘Loss and Damage Fund for vulnerable countries, as the UN unofficially dubbed it in 2022, was the fruition which stemmed from an idea from the final day of 2022’s COP 27 conference, which saw the tabling and creation of a ‘loss and damage’ fund. It proposed that countries responsible for significant amounts of negative consequences of climate change should pay ‘damages’ to countries responsible for no emissions or a negligible amount.

The countries in the former category happen to be among the world’s richest countries, while the latter countries happen to be among the world’s more impoverished. As the United Nations Environment Program put it:

The African continent contributes the least to climate change, yet is the most vulnerable to its impacts. African countries that contribute so little will have to spend up to five times more on adapting to the climate crisis than healthcare. G20 countries, meanwhile, represent around 75% of global greenhouse emissions. Meanwhile, Pakistan has seen US$30 billion in damages from severe flooding but emits less than 1% of global emissions.

This led to the 2022 establishment of the loss and damage fund, in theory, though no money was as yet on the table.

What the research says

This is in line with an Oxfam International report released in September – albeit at a national level rather than a personal one. In it, Oxfam stated that the richest 10% of the world’s population account for 52% of all carbon emissions – with 15% of that coming from the richest 1% alone – while the poorest 3.1 billion people in the world contributed just 7% of all emissions.

The operationalising of the loss and damage fund is arguably the first concrete step taken to remedy this imbalance in recent history.  

What the people say

COP 28 attendee Sebastien Cross, the co-founder and chief innovation officer of carbon rating agency BeZero Carbon, told Invezz that he greeted the news of the fund with enthusiasm:

The progress made on the Loss and Damage fund is hugely significant, and hopefully a positive sign of further impactful agreements to come. However, we cannot be complacent – the OECD estimates up to $2 trillion is needed to finance climate mitigation and adaptation in the most vulnerable parts of the world. Discussions about financing the climate transition and global decarbonisation must remain at the heart of the rest of COP28. We are hopeful that policymakers will acknowledge the importance of carbon markets to scale climate finance and accelerate the transition.