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This report issues five recommendations guiding the implementation and operation of a new international Loss and Damage fund, aimed and supporting countries most-vulnerable to the effects of climate change.
The 27th UN Climate Conference (COP27) concluded with the groundbreaking agreement to establish a new loss and damage (L&D) fund. This significant development aims to enable vulnerable countries to respond to and recover from climate impacts.
In setting up the new L&D fund, a transitional committee (TC) was tasked with providing recommendations on its institutional arrangements, elements of the funding arrangements, sources of finance, and ensuring coordination and complementarity with existing arrangements for L&D. Within this process, two pivotal questions arise: (i) How can the fund learn from existing funds and enable comprehensive responses to L&D? (ii) How can the fund best serve the needs and priorities of vulnerable and marginalized communities facing losses and damages?
Anchored within the principles of climate justice, this report aims to shed light on these questions by offering insightful recommendations to the process on how to best operationalize the fund to achieve its intended goals. It draws on learnings and best practices from existing funding institutions, and builds on the experiences, insights, and recommendations from practitioners in the field, aiming to consolidate ideas that have proven effective in the past. These encompass diverse areas such as governance forms, access requirements, instruments, and channels, which can potentially be adopted for the new L&D fund.
Five cross-cutting recommendations emerge from our research:
The report emphasizes that the design and operation of the L&D fund will be significantly influenced by its intended scope. With diverse opinions among stakeholders on the fund’s optimal design, the selection process for these recommendations is of paramount importance. Consequently, the TC must ensure procedures are inclusive and equitable, fostering an environment that encourages learning from a myriad of perspectives, especially from the most vulnerable.
This report is a companion to a separate report that examines issues surrounding the implementation of the L&D fund from the perspective of intended beneficiaries.
Project / Vulnerable countries are already experiencing severe losses and damages from unavoidable climate change impacts. They urgently need financial support.
Other publication / This report offers recommendations on how to operationalize a new global loss and damage fund from the perspectives of intended beneficiaries.
Feature / Ahead of COP27, listen to Episode 2 of SEI's Now & Then Podcast on Loss and Damage — what it means and how to operationalize finance to address it.
Media coverage / COP27's establishment of a Loss and Damage fund is a crucial victory. Now it must prioritize the most vulnerable communities, SEI researchers say.
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