First tranche of Loss and Damage Fund ready for payment in 2025 | Latest News India

In a groundbreaking step toward addressing the climate crisis, the Loss and Damage Fund board has completed key preparatory work to distribute aid to vulnerable countries. Meeting in Baku on Saturday, the board made key decisions that will allow the fund, which took years to build, to begin disbursing money in 2025 to countries most affected by climate disasters.

The events are the result of years of negotiations that ended after a three-day meeting in Azerbaijan, where the UN COP29 climate conference will be held this year.

“This landmark event in Baku marks a key step in enabling action to combat climate change. This is a truly historic day that has taken years, determination from so many and an unwavering focus on the needs of those on the frontlines of the climate crisis,” COP29 President-designate Mukhtar Babayev said in a statement.

Loss and damage has long been a point of contention at UN climate talks, with less developed nations pushing for a new fund to help countries cover catastrophic losses from rising sea levels and storm surges, while wealthier nations feared it could become a form of “compensation” for the impact of their share of greenhouse gas emissions.

Progress made to date includes the selection of the Fund’s Executive Director and the approval by the Board of several key agreements. These include arrangements for the World Bank to host the Fund’s Secretariat and act as Trustee, as well as templates for contracts and contribution agreements.

The Board also supported plans to hold an annual high-level dialogue to be co-hosted by Azerbaijan and the Fund’s Board on the sidelines of the World Leaders’ Summit on Climate Action at COP29 in Baku.

These agreements essentially provide the basis for the first disbursement of the fund in 2025, following years of diplomatic negotiations since its establishment at COP27 and the decision to launch it at COP28.

The COP29 presidency said it would use the summit to work with countries that have already pledged almost $800 million to turn those pledges into concrete funds. It will also call for further contributions.

HT reported on July 12 that observers of these negotiations have demanded that the fund be filled to a scale that meets the real needs of the most vulnerable people facing climate disasters. The amount of money the fund can mobilise will be crucial for developing and vulnerable countries, including India.

The board’s discussions in July focused on the scale of available funds, particularly in light of recent climate extremes and disasters related to record warming. Currently, several countries, including the UAE, Germany, Italy and France, have pledged about $700 million to the fund. The United States, historically the largest emitter of greenhouse gases, has pledged $17.5 million.

Those pledges were made at the UN climate conference in Dubai last year. An assessment in Springer, led by the International Institute for Applied Systems Analysis, estimates the economic cost of loss and damage in developing countries alone at $290 billion to $580 billion. By 2050, that cost is expected to rise to $1 trillion to $1.8 trillion.

Loss and damage refers to the consequences of climate change that go beyond what humans can adapt to. This includes both immediate climate disasters and slow-moving events such as cyclones, droughts, heat waves, sea level rise, desertification, glacial retreat, land degradation, ocean acidification and salinization, according to the World Resources Institute.

Harjeet Singh, climate activist and Global Engagement Director at the Fossil Fuel Non-Proliferation Treaty Initiative, said: “I warmly welcome the appointment of Mr. Ibrahim Cheikh Diong as the first Executive Director of the Loss and Damage Response Fund.”

“As climate change continues to wreak havoc on communities around the world, it is imperative that the Fund grows to hundreds of billions of dollars to meet their urgent needs while protecting their rights. We stand ready to partner with and support its efforts to ensure a just recovery for those most affected,” he added.