Climate crisis: Loss and damage fund – new hope or another empty promise?

By Connie Lam

A new fund to compensate nations most at risk from a warming world is being seen as one of the few successful outcomes from a largely disappointing UN conference on climate change.

A protest on Global Action Day 2022. Photo: Connie Lam.

UN Secretary General Antonio Guterres said the 2022 Conference of the Parties to the United Nations Framework Convention on Climate Change (COP27) last November had “taken an important step towards justice” with the loss and damage fund.

Although it is very disappointing to see very limited progress on new plans for reducing greenhouse gas emissions, this fund is critical and highlighted the element of fairness. Developed countries are finally paying for loss and damage to the least developed countries including small island states that are particularly vulnerable to climate change.

It was the first time since 2016 that COP had taken place in Africa, which accounts for the smallest share of the planet’s greenhouse gas emissions — less than 4 per cent. However, climate change is punishing the continent – rising sea levels, record flooding, extreme heatwaves and droughts are intensifying famine and displacing entire communities. This is why African nations call for an end to “climate injustice” and demand wealthy countries honour promises to compensate them for their losses.

At COP27, I met Vanessa Nakate, a Ugandan climate justice activist. She gave a powerful speech during one of the side events and reinforced the message: “We don’t need more words, we need real actions.”

One example of broken promises dates back to 2009, when developed countries agreed to pledge US$100 billion annually by 2020 to help developing countries adapt to climate change. But pledges when that year arrived totalled just over US$83 billion.

Will the new loss and damage fund be another empty promise? Especially when the $100 billion agreed earlier is no longer enough, how will the developed countries ensure this fund can fulfill its purpose?

Apart from quantifiable losses, climate change will also result in unquantifiable losses and damage such as cultural heritage, indigenous knowledge and societal and cultural identity. Simon Kofe, Tuvalu’s Foreign Affairs Minister, announced ahead of COP27 that “as our land disappears, we have no choice but to become the world’s first digital nation. Our land, our ocean and our culture are the most precious assets of our people”.

Hong Kong climate activist Connie Lam at COP27 in Sharm el-Sheikh, Egypt, in November 2022. Photo: Connie Lam.

Although the loss and damage fund is being established, there is still a big question mark over whether it can solve the problem for low-lying nations like Tuvalu.

The full details of how the fund will work still need to be hashed out – how it will operate, who will receive how much, and who will pay how much. The parties have agreed to establish a transitional committee to make recommendations on how to operationalise both the new funding arrangements and the fund at COP28 next year.

The first meeting of the transitional committee is expected to take place before the end of March this year.

Connie Lam is a climate advocate and was a youth delegate to COP27. Her interest lies in climate justice, loss and damage, climate finance and adaptation. As a co-founder of EmPower, she speaks for the underprivileged and promotes a just transition to protect the livelihoods of the most vulnerable.

Connie is currently working as a corporate social responsibility professional and has extensive experience in building long-term partnerships with charities as well as driving environmental and sustainability initiatives. She is also passionate about supporting local social entrepreneurs and serving the needy.

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