LOSS AND DAMAGE FUND (LDF)
1. Context
In the wake of the devastating landslides that recently struck Kerala’s Wayanad district, a crucial conversation has emerged around whether subnational entities can seek compensation through the United Nations Framework Convention on Climate Change (UNFCCC)’s Loss and Damage Fund (LDF). While this demand is justifiable, accessing climate funds is far more complex than it appears
2. What is the Loss and Damage Fund?
The Loss and Damage Fund (LDF) was created during the 2022 UNFCCC Conference (COP27) in Egypt to offer financial assistance to areas affected by both economic and non-economic impacts of climate change, including extreme weather and gradual processes like sea-level rise. Managed by a Governing Board, the fund’s distribution of resources is currently supported by the World Bank as an interim trustee. The Board is in the process of establishing systems to facilitate access to the Fund’s resources, such as direct access, small grants, and quick disbursement options. However, concerns remain that, like other climate funds, the LDF may struggle with delays in delivering timely assistance, especially to local communities below the national level
3. India's role in Loss and Damage Fund
- India experienced over $56 billion in damages due to weather-related disasters between 2019 and 2023. However, its National Climate Action Policy and budgets have emphasized mitigation over adaptation efforts.
- This focus has resulted in India's limited involvement in Loss and Damage discussions at COP meetings. Given the high vulnerability of certain regions in India to climate change, more active participation in these discussions could yield significant advantages.
- Domestically, there is an urgent need for a comprehensive legal and policy framework to effectively manage climate finance, particularly in the areas of adaptation and loss and damage, aligning with locally led adaptation principles vital for at-risk communities.
- The inclusion of a climate finance taxonomy in the Union Budget 2024 has raised hopes for increased international climate finance. However, without clear protocols for accessing loss and damage funds, frontline communities remain at risk.
- In international climate negotiations, India should push for more decentralised approaches to disbursing funds from the Loss and Damage Fund, rather than relying on the centralised methods used by other climate funds
4. State Interventions
- Adaptation and loss and damage challenges are most directly experienced by State governments. For example, in Kerala, the State government bore the majority of the financial burden for disaster recovery.
- A significant case is the Rebuild Kerala Development Programme, launched after the August 2018 floods, which was supported by loans from the World Bank and Germany’s KfW Development Bank.
- This highlights the importance of international climate finance in post-disaster recovery efforts. The program concentrated on rebuilding critical infrastructure like roads and bridges that were heavily damaged by the floods.
- However, the lack of a standardized system for conducting thorough assessments of disaster-related damages, especially from slow-onset events, means that important loss and damage needs might remain unrecognized, potentially limiting India’s access to the Loss and Damage Fund (LDF).
- The situation in Wayanad district exemplifies the broader difficulties India faces in accessing and managing climate finance, particularly for loss and damage. Developing a more defined domestic policy that emphasizes locally led adaptation and establishes clear guidelines for accessing loss and damage funds could significantly enhance India's ability to mitigate the effects of climate change
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For Prelims: Loss and Damage Fund (LDF), COP 27
For Mains: GS III - Environment & Ecology
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Previous Year Questions
1.Explain the purpose of the Green Grid Initiative launched at World Leaders Summit of the COP26 UN Climate Change Conference in Glasgow in November, 2021. When was this idea first floated in the International Solar Alliance (ISA)? (2021) 2.Describe the major outcomes of the 26th session of the Conference of the Parties (COP) to the United Nations Framework Convention on Climate Change (UNFCCC). What are the commitments made by India in this conference? (2021) |
Source: The Hindu
