Loss and Damages Fund

 

Loss and Damages Fund

·       In the COP27 U.N. climate summit in Egypt, the parties agreed to create a loss and damage fund.

·       Loss and Damage (L&D) Fund is a financing mechanism to compensate the most vulnerable countries from climate-linked disasters. 

·       Financing or a new fund to deal with loss and damage was a long-pending demand of poor and developing countries, including India.

·       The G-77 (India is part of this group) and China had called for the immediate creation of an L&D fund at COP 27.

·       Countries agreed at the COP27 Summit to set up a fund to help vulnerable countries being battered by climate disasters

·       A ‘Transitional Committee’ would be established which will decide the modalities, sources and governance of the fund, which will be considered at COP28.

·       The Transitional Committee will have 23 members, comprising 10 members from developed country Parties and 13 members from developing country Parties.

The Committee will consider

·       Establishing institutional arrangements, modalities, structure, governance and terms of reference of the fund;

·       Defining the elements of the new funding arrangements;

·       Identifying and expanding sources of funding;

·       Ensuring coordination and complementarity with existing funding arrangements.

·       Global Shield is another funding mechanism which was also launched at the COP27 U.N. climate summit.

 

Loss and Damage

·       Loss and Damage (L&D) refers to impacts of climate change that cannot be avoided either by mitigation or adaptation.

·       They also include not only economic damage to property but also loss of livelihoods, and the destruction of biodiversity and sites that have cultural importance.