Realizing a Fund that Brings Justice to People Harmed by the Climate Crisis

The First Meeting of the Loss and Damage Transitional Committee: Emerging Trends & Challenges Ahead

At the last United Nations climate conference in Sharm el-Sheikh (COP27) in 2022, countries established a fund to respond to the harms caused by climate impacts (referred to as loss and damage) in developing countries. This decision was a major win for climate-vulnerable countries and civil society, who had been demanding such a fund for decades. Their demands are well-founded, including under international law, as the continued failure to phase out fossil fuels is causing havoc across the globe and harming human rights along the way.

As unequivocally stated in the sixth and latest Synthesis Report from the Intergovernmental Panel on Climate Change (IPCC), world leaders have so far utterly failed to take sufficient action to protect people and the planet from the accelerating climate crisis. The COP27 decision to establish a Loss and Damage Fund was a crucial first step toward a just future in which communities can effectively recover from the losses they are suffering because of a crisis they had no role in creating.

But now comes the difficult work: fleshing out the details to develop a fund that meets the needs of communities at the frontlines of the climate crisis including women and girls, Indigenous Peoples, youth and children, and persons with disabilities and that is guided by key human rights principles such as inclusion and non-discrimination. The Loss and Damage Fund must become a key vehicle to ensure remedy for the harms suffered by communities, based on their actual needs. Frontline groups should be actively involved in decision-making and implementation of the fund to align actions with their views on effective responses to human rights harms and other losses in specific situations. It also entails urgently raising funds at scale, delivered by countries with a historic responsibility for the climate crisis

States at COP27 established a Transitional Committee of twenty-four country representatives from different regions of the world and tasked them with developing concrete recommendations for the Loss and Damage Fund before the next UN climate summit (COP28), planned in Dubai, United Arab Emirates, at the end of this year. The Committees mandate covers setting up the fund and new funding arrangements so it has an enormous amount of work ahead of it.

This Committee met for the first time at the end of March in Luxor, Egypt. Discussions during this first meeting stayed high-level, with more detailed conversations expected going forward. Nevertheless, some early trends emerged, and the stage was set for the work ahead.

The Committee must focus on the Loss and Damage Fund

Overall, the meeting was constructive and developed countries confirmed their commitment to the new Loss and Damage Fund. Opinions diverged when talking about the focus of the Committees work. While developing countries supported by civil society saw the fund itself as the most important element of the Committees mandate, developed countries aimed to keep the conversations centered around the broader funding arrangements and what already exists. The Committee has limited time, and failing to focus on the fund, would be highly problematic, as it will not meet the most urgent need for communities harmed by the climate crisis: filling the massive finance and implementation gap to address loss and damage. The Committee must get the Loss and Damage Fund up and running as soon as possible.

The fund must address a wide range of harms

All countries agreed that there are gaps when it comes to addressing loss and damage and that the decision at COP27 was meant to help fill these gaps. However, views diverge on the understanding of what constitutes those gaps: Some developed countries hinted at narrowing the scope of the fund severely, for example, by focusing only on the impacts related to slow-onset events like sea level rise. This is problematic, as communities are facing a wide range of losses related to extreme weather events such as tropical cyclones, droughts, and floods, as well as related to slowly growing impacts such as sea level rise, desertification, and melting glaciers. These losses can be economic, such as the loss of livelihoods or the destruction of infrastructure, but often cannot be counted or easily given a value, such as when lives are lost, cultural heritage is in danger, or the recovery from a series of extreme events has an impact on peoples mental health. In all of these areas, gaps exist and must be filled. The scope of the Loss and Damage Fund must be comprehensive enough to fill them.

Additionally, developed countries want to limit the number of countries that could benefit from the fund, while broadening the scope of countries that should pay. The UN Framework Convention on Climate Change (UNFCCC) clearly lays out who should pay and who can receive climate finance through the principle of common but differentiated responsibilities and respective capabilities (CBDR-RC), and this discussion is a distraction from the core mandate of the Committee. Focusing on groups and communities that are most vulnerable is important but goes beyond this discussion: the Committee could put in place modalities and criteria to make sure that the fund effectively reaches those communities.

A fund that contributes to debt is not the answer

Many countries that are highly vulnerable to the climate crisis are simultaneously facing a debt crisis. This debt crisis is severely limiting countries abilities to respond to urgent needs like climate disasters, constraining the level of public finance for climate mitigation and adaptation and other important services like schools, health facilities, and social protection, which support the protection and realization of human rights. There is no logic in creating a Loss and Damage Fund that would worsen the debt crisis.

Climate finance for mitigation and adaptation has come largely in the form of loans. This mistake cannot be repeated in the case of loss and damage. When dealing with losses, any type of repayment increases debt. But loans and insurance schemes which come with severe limitations (including expensive premiums) and again put the burden on communities kept coming up during conversations. Developed countries must commit to a grants-based fund.

A fund for the people, without the people?

Finally, meaningful participation from civil society and frontline communities is key at every stage of the negotiations, design, and implementation of the Loss and Damage Fund. This is the only way to ensure that the fund will deliver effective remedy for communities. While there has not yet been any discussion on participation in the context of the fund, concerns were raised around civil society participation in the Transitional Committee meetings. For this first meeting, in-person participation was limited, and information was shared late, leading to constraints related to obtaining travel documents. Upon arrival, observers were separated from the actual proceedings, having to follow a live stream from an overflow room thereby hampering unnecessarily effective interactions between decision-makers and stakeholders. On a positive note and mainly after asking for it observers were given the floor three times during the meeting. This was not the case for people following remotely, as the provided webcast does not allow for meaningful participation.

Observers in Luxor called out the limited participation and were heard: the Committee has committed to enhancing observer participation going forward. Observers have been clear on what this should entail: more in-person participants; clear and timely communication about meetings; support to observers from developing countries to ensure balanced participation; allowing observers to be in the meeting room; full, effective, and meaningful remote participation modalities; and open calls for submitting inputs to the discussion. This important topic is on the agenda of the second meeting of the Committee but they should not wait until then to put in place enhanced participation modalities based on existing procedures.

What happens next?

In Luxor, the Committee decided on a work plan, with a timeline for 2023 and milestones set for each meeting. Four Committee meetings in total will receive inputs from two workshops (April and July), the Glasgow Dialogue in Bonn, Germany (June), and ministerial consultations (October). The recommendations of the Committee will then be considered for adoption at COP28. During all of these meetings, frontline communities should be front and center.

Important events are happening in parallel to the Committees work that can provide insights and help move the process forward. On the last day of the Committees first meeting, the UN General Assembly in New York adopted by consensus a resolution proposed by Vanuatu and a group of core countries requesting an Advisory Opinion on human rights and climate change from the International Court of Justice. Although the actual opinion is not expected before the Committee finishes its work, this is a clear signal that all countries are committed to taking a human rights-based approach to climate action. This commitment should guide the discussions and decisions on the Loss and Damage Fund.

Additionally, important human rights bodies such as the UN Committee on the Rights of the Child are working on authoritative statements clarifying the obligations of States in the context of climate change. The UN Human Rights Councils special procedures, such as reports from the Special Rapporteurs on climate change, contemporary forms of racism, and adequate housing have already provided important guidance specifically relating to loss and damage. Going forward, the Committee must make explicit linkages with the UN human rights system, for example by inviting human rights experts to present at its meetings, to ensure that its work is aligned.