Minister of Forestry, Fisheries and the Environment Barbara Creecy has welcomed the agreement by the Transition Committee of the United Nations Framework Convention on Climate Change (UNFCCC) on the operationalisation of the Climate Loss and Damage Fund.
The purpose of the Fund is to assist developing countries that are particularly vulnerable to the adverse effects of climate change in response to economic and non-economic loss and damage associated with those harmful effects, including extreme weather events and slow-onset events.
Creecy noted that developing countries, Africa in particular, have borne the brunt of the adverse effects of climate change and have not received the required multilateral support to face the climate challenge, including for addressing loss and damage.
The agreement on the recommendation comes only weeks ahead of the 28th Conference of Parties to the UNFCCC in Dubai.
Creecy said the governing instrument of the Loss and Damage Fund presents a clear pathway to operationalising this historic milestone in the multilateral climate negotiations.
The delivery on the Sharm El-Sheik COP27 decision to operationalise a new fund for loss and damage in the context of the scale and increasing severity of loss and damage impacts in the near-term scenario of temperature increase to 1.5 degrees or above.
Loss and damage is generally defined as the impacts of climate change, which are not avoided, by mitigation, adaptation and other measures, such as disaster risk management.
The scope, eligibility and operational elements have been defined in order for the Fund to provide direct support in the form of largely grant-based and non-debt finance to reconstruction and rehabilitation.
This includes addressing relocation, lost livelihoods and non-economic losses after extreme weather and significant slow-onset events.
"The projected economic cost for loss and damage by 2030 alone has been estimated to be between $290 and $580 billion in developing countries alone. By 2050, the economic cost for loss and damage in developing countries is estimated to be between $1 trillion to $1.8 trillion.
"The new Loss and Damage Fund will have a Board, balanced between developed and developing countries and will take its guidance from the parties to the UNFCCC and Paris Agreement.
"The Committee also proposed that the Fund be designated as an operating entity of the Financial Mechanism of the Convention and will allocate resources based on triggers that includes inter alia severity of the impacts on people, communities, infrastructure ecosystem of the climate-related event," the Department of Forestry, Fisheries and the Environment said on Wednesday.
It includes flexibility to address the variation in these impacts across developing countries and time, from cyclones and flooding, to slow onset droughts and land degradation, as well as sea-level rise and glacier retreat.
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"The final approval of this agreement at COP28 presents the international community with a critical global solidarity moment to ensure the Fund is capitalised at a scale necessary to respond to the costs and impacts already borne by developing countries," said Creecy.
The demonstration of solidarity to the vulnerable countries and communities will be assessed by both the scale of resources committed to the Fund.
"South Africa urges the COP28 presidency to launch a process for the initial core capitalisation from developed countries supplemented by financial inputs from a variety of other sources in line with the principle of common but differentiated responsibilities. It must also engage with all other relevant actors to support aligning their efforts to leverage the impact of the Fund in addressing loss and damage," Creecy said.
The Transitional Committee was established at COP27 in Egypt last year with a mandate to present governance documentation to operationalise the Fund in 2023.
The Committee of 24 experts was co-chaired by Outi Honkatukia of Finland and Richard Sherman of South Africa.
The Minister has extended her appreciation to the co-chairs and the Developing Country Committee members for developing a robust and transparent instrument for the Fund.
