Now to engineer the loss & damage fund

Better late than never. It has taken the world 30 years to agree to set up a fund that will have developed economies assist developing countries to deal with adverse, irreversible and irreparable impacts of climate change that goes under the apt legalese ‘loss and damage’ (L&D). It is a recognition – after much foot-dragging and attempts to divide developing economies into ‘vulnerable’ (eligible for L&D) and ‘not-so-vulnerable’ (ineligible) countries – that countries that contribute the least to the problem of climate change suffer the most adverse impacts. The agreement forged in Sharm el-Sheikh in this specific aspect is a victory for climate justice.

But this is only the first step. Developing countries have managed to wedge their foot in the door. The job at hand now is to design a fund that is fit for purpose and top priority for developing countries. Rich countries opposed a fund, questioning the added value of a new fund as well as having concerns that this would lead to a spree of demands for liability and compensation. The push by rich countries to broaden the donor base to include developing countries that are also major emerging economies will be a flashpoint over the next year. Developing countries must be proactive in determining the design of the fund. It must be more than a disbursal mechanism. Instead, it must be a coordinating mechanism that ensures that all efforts on averring, minimising and addressing L&D are accounted for and there are no overlaps in efforts or accounting of funds. Another focus of the fund must be on efforts that go beyond immediate disaster management. This will ensure that vulnerable developing countries are able to avoid spiralling into debt and poverty, as has been the case in several instances.

Countries have agreed to finalise the details of the fund by 2024. It is critical that this hard-fought fund is designed to serve those that need the assistance the most.

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