On the first day of the COP28 climate summit in Dubai (UAE), countries agreed on a “loss and damage” fund to compensate poor states for the effects of climate change.
About Loss and Damage Fund
Wealthy states and major polluters will put millions of dollars towards a fund. The fund aims to provide financial assistance to low and middle-income countries (LMICs), also known as developing nations by the UN, for coping with and recovering from the economic and non-economic losses caused by climate change.
The term refers to the compensation that rich nations, whose industrial growth has resulted in global warming and driven the planet into a climate crisis, must pay to poor nations, whose carbon footprint is low but are facing the brunt of rising sea levels, floods, crippling droughts, and intense cyclones, among others.
The fund will be administered by the World Bank.
Initial commitments amount to US$430 million. UAE has committed US$100 million to the fund. Other countries to make initial commitments to the fund include the United Kingdom ($75 million), United States ($24.5 million), Japan ($10 million) and Germany (also US$100 million).
The Loss and Damage Fund was first suggested by Vanuatu in 1991. The loss and damage fund was first announced during COP27 in Sharm el-Sheikh, Egypt, last year.
The loss and damage fund is a global financial package to ensure the rescue and rehabilitation of countries facing the cascading effects of climate change.
All LMICs are eligible to apply for funds from the reserve and are also encouraged to make financial contributions where possible.
About COP 28
COP 28 refers to the United Nations Climate Change Conference taking place in Dubai, United Arab Emirates, from 30 November until 12 December 2023.
UN Climate Change conferences (or COPs) take place every year, and are the world’s only multilateral decision-making forum on climate change with almost complete membership of every country in the world.
