Loss and Damage decisions, pitfalls and promises

Source– The post is based on the article “Loss and Damage decisions, pitfalls and promises” published in The Hindu on 29th November 2022.

Syllabus: GS3- Environment

Relevance: Climate change related issues

News- The article explains the issue of climate financing with respect to Loss and Damage mechanism.

What is the decision relating to new funding arrangements focusing on L and D?

The decision includes a transitional committee to prepare elements relating to the operationalisation of the new funding arrangements to be adopted at COP28.

The decision restores the faith of countries, especially those vulnerable, in the process of multilateralism.

The new funding arrangements will complement the existing arrangements and include sources, funds, processes and initiatives under and outside the Convention and the Paris Agreement.

What are the issues associated with new funding arrangement?

Lack of clarity on the source of funding accruing to the new fund only.

There is a question mark over the new L and D fund with non-compliance by developed countries as far as climate finance commitment is concerned.

This dilutes the consistent demand by the Alliance of Small Island States (AOSIS) to set up a dedicated loss and damage response fund, which would be on top of existing climate finance commitments.

The decision again recognises the mitigation-centric nature of the history of climate change negotiations to be suiting the agenda of developed countries. The mitigation-centric nature of the negotiation can be traced to Article 2 of the United Nations Framework Convention on Climate Change (UNFCCC) 1992.

What is the viewpoint of developed countries?

The developed countries have consistently opposed being made liable for climate-change related adverse effects. The basis for their contribution to various funds so far is the principle of common but differentiated responsibilities and respective capabilities (CBDR).

They only acknowledge their responsibility in view of the pressures their societies place on the environment and of the technologies and financial resources they command.

The compensation aspect involves a serious legal hurdle of establishing causal relations between the injurer and the victim since the adverse effects of climate change occur substantially later than the greenhouse gas emissions that cause them.

What are the demands of Alliance of Small Island States?

During the negotiation process for the UNFCCC in 1991, AOSIS, unsuccessfully tried to include the establishment of an international insurance pool as a collective loss-sharing scheme.  But it requires more research and deliberation amongst major emitters in developed and developing countries.

In Egypt, AOSIS, demanded a dedicated L and D Response Fund. It wanted funding from governments on a grant basis.

The fund would also draw upon other potential sources, which include, as UN Chief Antonio Guterres advocates, a windfall tax on oil and gas companies’ profits.

The AOSIS favours a dedicated L and D response fund including the German-backed “Global Shield Scheme” against climate risks which is aimed at increasing re-arranged finance to be disbursed before or just after disasters happen, and avoid a piecemeal approach.

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