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1st December 2023 (8 Topics)

Loss and Damage Fund: COP-28 summit

Context:

Fund, meant to compensate countries dealing with effects of climate change, gets commitments of atleast $450 million; all developing countries are eligible to apply for the Fund.

About COP 28:

  • COP 28 is held in Dubai, UAE
  • It is an important convention organized under the UNFCCC (United Nations Framework Convention on Climate Change).

Loss and Damage Fund:

  • Member countries agreed to make operational a Loss and Damage (L&D) fund that is meant to compensate countries already dealing with climate change.
  • To be based at the World Bank but managed by an independent secretariat, commitments worth atleast $450 million have already been made by countries though billions of dollars are still needed to meet its purpose.
  • The L&D fund was first announced at the conclusion of COP-27 in Sharm El-Sheikh, Egypt, last year, but it has taken five separate meetings since then, via ‘transitional committees,’ to get to a position where countries could unanimously agree on a text.

Positive start

  • Contributions by Developed Countries: Financial commitments have been made by
    • The United Arab Emirates $100 million – the host country
    • Germany $100 million
    • The United States $17 million
    • The United Kingdom $50.6 million (approx.)
    • Japan $10 million as part of the L&D.
    • The European Union also committed to $145 million, over and above the German contribution.
  • The World Bank will be the “interim host” of the fund for a period of four years. It is expected to operate in accordance with the principles of the UNFCCC and the Paris Agreement.
  • All developing countries are eligible to apply for and every country has been “invited” to contribute to the fund.
  • Payments are voluntary and a certain percentage has been set apart for a category of countries called Least Developed Countries and Small island developing states.

1.5 trillion Dollars Bill:

  • Loss and damage from climate change cost about 5 trillion Dollars ($1,500 billion) in 2022, according to a study.
  • Several developing countries and some of the poorest lost an average of about 8.3% of GDP due to climate change.
  • The fund, as it stands now, doesn’t specify how often it will be replenished.
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