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Despite the different opinions on COP28’s results, it is undoubted that for the first time in a COP, there is a clear reference to the need for a “transition away from fossil fuels”. One of the most significant facts was the establishment of the Damage and Loss Fund.

This Fund is a long-standing call from developing countries that face the dire consequences of climate change (like hurricanes, droughts and floods) despite having limited emissions. It would allow them to recover and rebuild better after climate-induced disasters and cope with the long-term consequences of climate change.

During COP 28, developed countries agreed to provide financial contributions to support this Fund.Countries immediately pledged more than $700 million to Loss and Damage, the majority to the Fund. 

The United Arab Emirates pledged $100m, followed by the same sum by Germany, and then topped by Italy and France, which promised $108m. Then we find Denmark at $50m, Ireland at $27m and Norway at $25m. The US pledged just $17.5m, Canada less than $12m, while Japan, the third largest economy behind the US and China, offered $10m. According to climate justice experts, the loss and damage funds should be new and additional and come as grants, not loans. The agreement was only a first step in establishing the funding arrangements. Details are now under discussion. 

On the one hand, the figures reveal that the overall pledged amount needs to be more robust to address the real needs of the concerned countries. The discussion paper “The loss and damage finance landscape”, issued by the Loss and Damage Collaboration and the Heinrich-Böll-Stiftung Washington to provide recommendations to guide the work of the Transitional Committee throughout 2023, also looked at the scale of the resources needed. They established a need for $400 billion annually to address loss and damage by developing countries. If we compare $700 million to $400 billion, we see that it corresponds to less than 0.2%.

On the other hand, we could also state that this achievement is a first pragmatic step and has a symbolic value, as Europe and the rest of the world showed that they share a responsibility to help others struggling with the impacts of climate change. Overall, the EU and its Member States have contributed more than €400 million, over two thirds of the initial funding pledges.
It also demonstrated the recognition of the urgent need to address the inequalities that exist in the global climate conversation.

Let’s follow the evolutions and subsequent agreements to analyse the impact of the Loss and Damage Fund.

Written by: Cristina Ceccarelli