Green Light for Loss and Damage Fund on COP-28’s Opening Day.

“On Day 1 of COP-28, a groundbreaking decision was reached to operationalize the Loss and Damage (L&D) Fund, signaling a crucial step forward in compensating nations impacted by climate change. #COP28 #ClimateAction

Navigating the Evolution of the Loss and Damage Fund: From Inception to Operationalization

The Loss and Damage (L&D) Fund, officially announced at COP-27 in Sharm El Sheikh, Egypt, has undergone a transformative journey, addressing the irreversible impacts of climate change. Here’s a timeline and comprehensive overview:


  • Early 1990s: Developing countries voice the need for financial assistance to combat climate change’s irreversible impacts.
  • 2007: UNFCCC establishes the Nairobi work programme on loss and damage.
  • 2013 (COP19): Agreement to establish the L&D fund in Warsaw, Poland.
  • 2021 (COP26): Glasgow Dialogue initiated to continue discussions on the fund.
  • 2022 (COP27): Representatives agree to set up the L&D fund and a Transitional Committee (TC).

Transitional Committee Journey:

  • 2023: Four TC meetings conclude with no clear recommendations on fund operationalization.
  • October 2023: TC5 in Abu Dhabi results in recommendations forwarded to COP 28.
  • November-December 2023: COP 28 in Dubai to consider and potentially adopt TC5 recommendations.

What is the Loss and Damage Fund?

The L&D Fund aims to provide financial assistance to developing countries impacted by irreversible climate change effects, emphasizing moral and financial responsibility from developed nations.

Key Outcomes:

  1. Operationalization: COP-28 members agree to make the L&D Fund operational, compensating countries grappling with climate change effects.
  2. Contributions: Notable contributions include $100 million each from the UAE and Germany, $17 million from the US, $50.6 million from the UK, $10 million from Japan, and an additional $145 million from the EU.
  3. Funding Commitments: Financial commitments reach nearly $250 million, but billions are still required.
  4. Fund Management: World Bank hosts the Fund for four years, managed by an independent secretariat.

Eligibility and Contribution Guidelines:

  • All developing countries are eligible, with voluntary contributions and a specific percentage allocated for Least Developed Countries and Small Island Developing States.

Significance of the Fund:

  1. Historic Decision: Acknowledged as a historic decision after nearly three decades of demand.
  2. Concerns: Concerns raised about the absence of a defined replenishment cycle for long-term sustainability.
  3. Positive Start: Initiated on the first day of COP-28, setting a positive momentum for future discussions.
  4. Global Engagement: Representatives from nearly 160 countries confirmed for the World Climate Action Summit, indicating broad global engagement.

Significance to Developing Countries:

  1. Compensation: Aims to compensate developing countries grappling with adverse climate change effects.
  2. Economic Recovery: Supports economic recovery in nations experiencing significant losses.
  3. Sustainable Development: Facilitates investment in sustainable development initiatives.
  4. Global Solidarity: Acknowledges disproportionate impacts on developing countries and the responsibility of developed nations.
  5. Climate Action: Incentivizes active participation in global climate change mitigation and adaptation efforts.
  6. Equity and Justice: A step towards addressing equity and justice aspects of climate change.


  1. Insufficient Funding: Current commitments are far less than needed, raising concerns about fund effectiveness.
  2. Lack of Replenishment Cycle: Absence of a defined replenishment cycle raises questions about long-term sustainability.
  3. Voluntary Payments: Relying on voluntary contributions may lead to funding uncertainty.
  4. Allocation Challenges: Criteria for fund allocation and access not clearly defined, posing challenges in equitable distribution.
  5. Operational Dynamics: Management by an independent secretariat and World Bank hosting present operational challenges.
  6. Global Climate Change Impact: Current fund scale might be inadequate given the extensive impacts of climate change.


The operationalization of the L&D Fund marks a historic milestone, addressing financial impacts on vulnerable countries. However, concerns about funding, lack of defined cycles, and operational dynamics highlight the challenges in ensuring the fund’s sustained effectiveness. The journey continues at COP-28, where decisions will shape the future of climate change mitigation and support for affected nations.

Source: TERI

Leave a Reply

Your email address will not be published. Required fields are marked *