What is the Loss and Damage Fund?
The Loss and Damage Fund is a financial mechanism designed to address the unavoidable impacts of climate change that result in loss and damage to communities, economies, and ecosystems. The Loss and Damage Fund was announced at the United Nations (UN) Climate Change Conference in 2022 (COP27) and key details are being negotiated in the lead up to COP28 in November-December 2023.
The need for the Loss and Damage Fund arises from the recognition that despite global efforts to mitigate greenhouse gas emissions and adapt to the changing climate, loss and damage is already occurring and is projected to increase. Small islands and coastal nations are on the front lines of the climate crisis.
The Loss and Damage Fund should be a source of reliable, adequate, and accessible finance that enables vulnerable territories to efficiently respond to the impact of the climate crisis. Key principles include:
Acknowledge the importance of proactive action to minimize and avert damages
Recognize inadequate global action on mitigation in-line with the Paris Agreement and science
Provide urgent disbursement of funding following major climatic events
Ensure inclusive and strategic responses to engage civil society in fund operations
Adopt a high-risk appetite, especially when supporting urgent matters
Offer balanced, equitable direct access to funding to address slow onset events