The US has withdrawn from the board of the Loss and Damage Fund.

• The decision reflects the Trump administration’s ongoing disengagement from international climate agreements..
• The US withdrew from the Paris Agreement, halted US scientists’ participation in the IPCC, and canceled funding for the Green Climate Fund.

About Loss and Damage Fund (LDF)

• It is a fund for responding to loss and damage whose mandate includes a focus on addressing loss and damage to assist developing countries.
• Established at the 27th UNFCCC Conference of Parties (COP27) in 2022 in Egypt.
• Operationalized in COP28 following agreements among member countries.
• The fund is overseen by a Governing Board responsible for determining the allocation of financial resources.
• The World Bank is serving as the interim trustee for four years.

Objective of LDF

• To provide financial assistance to developing nations suffering economic and non-economic losses due to climate change.
• Supports regions impacted by extreme weather events and slow-onset processes like rising sea levels and desertification.
• Developing nations, especially small island states, have long demanded financial assistance due to climate damages caused by industrialized nations.

Concerns Regarding Loss and Damage Fund 

• Climate funds are often slow in reaching affected regions, particularly at the sub-national level.
• The LDF may face similar challenges in disbursing timely financial aid.
• Without drastic emissions reductions, climate change will intensify, increasing the need for mitigation, adaptation, and loss and damage funds.

Implications of US withdrawal

• Impact on the funding: About $750 million has so far been promised for the fund, of which the US has contributed $17.5 million.
• Uncertainty in Climate Justice: The US withdrawal from the LDF board weakens global climate justice and accountability for historical emissions.

Stages of Disaster Management

About Climate Finance

• Climate finance involves local, national, and transnational funding from public and private sources to support mitigation and adaptation.
• Principles of Climate Finance:
• • Polluter Pays Principle : Countries responsible for higher emissions should contribute more to climate finance.
  • Common but Differentiated Responsibilities (CBDR-RC): Developed nations must assist developing countries in climate adaptation and mitigation.

Multilateral Climate Funds Coordinated by UNFCCC

India’s Climate Finance Initiatives

• National Adaptation Fund for Climate Change (NAFCC) (2015) : Supports adaptation projects.
• National Clean Energy Fund (2010-11) : Finances clean energy research and projects.
• Intended Nationally Determined Contributions (INDCs) (2015): India’s commitments under the Paris Agreement.
• Climate Change Finance Unit (2011) : Coordinates climate finance policies.

Challenges to Climate Finance

• Funding Gap: Climate finance provided under Nationally Determined Contributions (NDCs) falls short of national needs.
• Unequal Access: Least developed countries receive lower per capita funding from multilateral climate funds.
• Slow Approval Process: Bureaucratic hurdles delay fund disbursement, impacting timely climate action.
• Viability Gap Funding: Many projects struggle to secure necessary financial support for execution.

Way Forward

• The Loss and Damage Fund must bridge gaps left by existing climate finance mechanisms.
• Without addressing root causes such as emissions reduction, financial aid alone will not prevent worsening climate disasters.
• India needs a clear legal and policy framework to streamline climate finance, ensuring effective adaptation and loss and damage responses.
• Strengthening locally led adaptation efforts is crucial for safeguarding vulnerable communities.

DOWNLOAD PDF