Why is the Loss and Damage fund so important for Africa and what will likely come out of the negotiations at COP28?
At the upcoming international climate talks in Dubai, Parties will look to operationalise the Loss and Damage Fund, a potential lifeline for developing countries agreed to at the last minute at COP27. Our climate editor, James Wan, spoke to Hyacinthe Niyitegeka, coordinator of the Loss and Damage Collaboration to learn more.
In the run-up to COP28, we will be publishing further explainers with experts outlining the issues of importance for African countries in the negotiations.
What is Loss and Damage funding and why is it important for Africa?
As the consequences of the climate crisis escalate, many countries have implemented plans for mitigation (reducing greenhouse gas emissions) and adaptation (reducing the risk of harm from climate change impacts). These strategies, however, are inadequate to avoid all negative harms. The climate crisis also leads to impacts that have not been or cannot be avoided by mitigation and adaptation.
These unavoidable and irreversible impacts are known as "loss and damage". They are caused by extreme weather events such as droughts, floods, heatwaves, and tropical cyclones, as well as slow-onset climatic processes such as desertification, rising sea levels, rising temperatures, salinisation, ocean acidification, and land degradation.
Some forms of loss and damage are primarily economic and affect things like infrastructure, property, and agricultural production. Other aspects are primarily non-economic such as loss of human lives, biodiversity, territory, cultural heritage, indigenous knowledge and language, and damage to ecosystems, soil quality, health, and mental health.
Africa is especially vulnerable to loss and damage and suffering from it as we speak. More than 36 million people have been affected by severe drought in the Horn of Africa. Cyclone Batsira and Cyclone Freddy led to hundreds of deaths, tens of thousands of displacements, and devastated economies in southern Africa at the start of the year. Heavy rainfall and floods from Nigeria to the Congo to South Africa have swept away infrastructure, destroyed livelihoods, and ended lives.
How has Loss and Damage typically been treated at COPs?
In the early days of climate change discussions in 1991, Vanuatu on behalf of Small Island Developing States (SIDS) called for action to address loss and damage. This call was overlooked until 2007 at COP13, when loss and damage was first mentioned in a COP decision (the Bali Action Plan).
At COP19 in 2013, Parties agreed to establish the Warsaw International Mechanism on Loss and Damage (WIM) and established an Executive Committee (ExCom) to guide the implementation of WIM functions. A couple of years later, at COP21 in 2015, Loss and Damage was officially acknowledged and addressed through the inclusion of a dedicated provision, Article 8, in the Paris Agreement.
In a review of WIM at COP22 in 2016, developing countries demanded a greater emphasis on enhancing action and support. During a second review at COP25 in 2019, this call was repeated. Those discussions also led to the establishment of the Santiago Network for Loss and Damage to catalyse the technical assistance of relevant organisations for implementation of loss and damage projects.
In 2022, COP27 established the first-ever dedicated fund for Loss and Damage and tasked a Transitional Committee, composed of 24 members from both developing and developed nations, to come up with recommendations for its operationalisation and funding arrangements. The committee concluded its meetings this November. Its recommendations are expected to be adopted at COP28.
What will be the key debates around the Loss and Damage Fund at COP28?
After five meetings, two workshops, a dialogue session, and a ministerial meeting, the Transitional Committee has come up with a set of recommendations for how the Loss and Damage Fund will work. Coming to this agreement, however, required plenty of compromises, many of which have left African countries and other developing nations, as well as civil society organisations, deeply concerned.
There are various points of contention that will likely be discussed at COP28 before Parties adopt the recommendations.
This includes questions over who will pay into the fund and how. The recommendations acknowledge the urgent and immediate need for new, additional, predictable, and adequate financial resources to address loss and damage - both economic and non-economic, and from both extreme weather events and slow onset climate impacts. However, the scale at which the fund will operate, the process by which countries will pay into it, and any timelines are not specified. The text urges donors to provide assistance for activities to address loss and damage and to take the lead to provide financial resources.
There is also apprehension around the decision to host the fund within the World Bank even if only for four years, which is the interim period outlined in the draft decision. Many developing countries resisted this decision, arguing that the Bank lacks the culture, speed, and accountability to administer the finances and that it would demand a sizeable fee for hosting the fund. They wanted the Fund to be an independent institution but gave in subject to certain conditions, including a comprehensive evaluation after four years at which point the arrangement can be ended if the conditions have not been fulfilled. However, some individuals believe these clauses lack sufficient strength.
Another possible source of tension is over who can receive resources from the fund. The recommendations agreed that all developing countries that are "particularly vulnerable" to the adverse effects of climate change are eligible. While vague, this more closely reflects the stance of developing countries that persistently argued that the fund should be open to all developing countries, rather than just small island states or least developing countries, which was the proposal from some developed countries.
Finally, there are various aspects that are not covered by the Transitional Committee's recommendations that could be raised at COP28. For instance, while the composition of the fund's board is 16-14 in favour of developing over developed country members, there are no seats for impacted communities, Indigenous peoples, or civil society. The document contains statements regarding the "effective participation of observers" and "consultative forums", but these are ambiguous. The governing instrument also lacks any mention of human rights.
What is the Santiago Network and which of its key issues will be debated at COP28?
The mandate of the Santiago network, established at COP25, is to catalyse technical assistance of relevant organisations, bodies, networks and experts for the implementation of loss and damage projects at the local to regional levels. When it is up and running the Santiago network will support developing countries and communities to develop loss and damage plans that meet their needs and priorities.
At COP26, Parties decided on the functions of the Santiago network and established a process to further develop its institutional arrangements. Developed countries were urged to provide funds for technical assistance and the services of the secretariat.
COP27 then defined the structure of the Santiago network. This includes a hosted secretariat to facilitate its work; an Advisory Board to provide guidance and oversight on the effective implementation of the functions of the network; and a network of member OBNEs (organisations, bodies, networks, experts) covering a wide range of topics relevant to loss and damage.
At COP28, there are several important issues that need to be addressed in order to fully operationalise the Santiago network. These include selecting the secretariat's host organisation and the members of the Advisory Board. Another important issue that should be addressed at COP28 and beyond is the finance for the Santiago network.
What would be bad scenario for Africa coming out of the negotiations?
Developing countries including those in Africa have long advocated for the effective implementation of the Santiago network and an accessible and well-financed fund for loss and damage. If progress is not made at COP28 or developing countries are forced to make such compromises that mean they do not receive the technical assistance and financial support they need, it will leave hundreds of millions of people far more vulnerable.
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What is a realistic positive outcome from COP28?
The most favourable outcome from COP28 is that it results in a Loss and Damage Fund that is fit for purpose and adequately resourced. A group of experts recommended a floor of $400 billion every year, which includes total loss and damage needs, of which the Fund should bear the largest share, and with the goal of raising trillions of dollars. These funds should be new, additional, grant-based, predicted, and sustainable as well as accessible to vulnerable communities and sensitive to the priorities and needs of different countries.
Another positive outcome would be the integration of loss and damage as a third pillar - alongside mitigation and adaptation - in the new collective goal of climate finance. The successful operationalisation of the Santiago Network is also of utmost importance to ensure the provision of necessary technical assistance. Finally, as COP28 completes the world's first global stocktake - reviewing progress (or lack thereof) on achieving the goals of the Paris Agreement - it is essential that this process leads to a scaling up of climate action on all fronts, from averting loss and damage through mitigation, minimising loss and damage through adaptation, and addressing loss and damage that it is already underway.
Following COP28, what will the next challenges be for the Loss and Damage fund?
Once the recommendations prepared by the Transitional Committee are adopted, the next step will involve ensuring that sufficient funding is secured to disburse to developing countries. This will likely involve receiving numerous pledges to support the fund. The challenges will be to ensure that adequate financing is provided and to ensure that all the recommendations made are followed and implemented.
Hyacinthe Niyitegeka is a water scientist and a climate negotiator with experience working on climate policy in different contexts. She coordinates the Loss and Damage Collaboration, where she oversees day-to-day operations.
