Launch of Loss and Damage Fund Signals Promising Opening to COP28

New climate action

Today marks a historic step in addressing the impacts of climate change as countries agreed to activate the Loss and Damage Fund, determining how the fund will be set up. As climate-vulnerable communities are disproportionately affected by the climate crisis, including the devastating droughts and floods in the Horn of Africa we’ve seen this year and last year’s deadly floods in Pakistan, the impacts of climate change on their lives and livelihoods must be addressed.

The agreement on the Loss and Damage fund on COP28’s opening day is a positive start to the U.N. climate talks. As world leaders convene in Dubai, we call on them to turn the Loss and Damage Fund from a promise into a genuine commitment, with historical emitters taking the lead and pledging significant new grants.

Debbie Hillier, Climate Advocate for Mercy Corps and the Zurich Flood Resilience Alliance, says:

“The historic agreement reached last year during COP27 to establish a Loss and Damage Fund reflects a longstanding priority for developing countries, who have advocated for three decades on this critical issue. Recognising the urgency posed by the climate crisis, the implementation of the fund at COP28 marks an important first step. However, the agreement has numerous shortcomings, and does not address climate justice.

“The decision text doesn’t refer to the scale of finance needed for addressing losses and damages and to the historic responsibilities of polluting countries to pay into the fund. The agreement lacks a reference to the core fundamental principle of UNFCCC – that of common but differentiated responsibilities. Instead, the text refers to ‘voluntary contributions’ which means that high-polluting countries are not obligated to pay into the fund. What should be responsibilities are perceived as donations, putting the burden on those least responsible for climate change.

“We are watching as the scale of devastating loss and damage caused by climate change is mounting day by day, and the fund needs to be activated urgently. But it also needs to be effective and accessible for those hardest hit. The Fund’s host is envisioned to be the World Bank, at least for the first four years, yet the Bank has not yet agreed to key conditions to ensure the fund remains autonomous and accessible. If the World Bank does not confirm full compliance promptly, another host must be found.’

“While the agreement to operationalize a Loss and Damage Fund is a significant achievement to start COP28, the hard work is just starting. Only once we see it well funded and fully functional in helping communities devastated by climate disasters should we consider it a success.”

What is currently unfolding in the Horn of Africa is a stark example of how the climate crisis is intensifying by the day and how the Loss and Damage fund could help communities and countries that contribute the least to greenhouse gas emissions respond to the devastating consequences of climate change.

Kunow Sheikh Abdi, Mercy Corps country director for Kenya, says:

“The Horn of Africa continues to face an unprecedented humanitarian and climate crisis, shifting from a severe drought to heavy rain. Widespread floods in Kenya, Somalia, and Ethiopia have already displaced millions, causing extensive damage to major road infrastructure and devastating croplands, homes, schools, and hospitals. This crisis has compounded the already grave humanitarian situation, resulting in increased hunger, malnutrition, and heightened risks of water-borne diseases.

“Regrettably, rebuilding the livelihoods and assets that communities have lost will pose a significant challenge due to limited funding and competition with other global crises. The Loss and Damage fund holds great potential to support the communities in the Horn of Africa and beyond, and we now want to see it properly funded and implemented.”

Asim Saleem, Mercy Corps country director for Pakistan, says:

“Pakistan is grappling with the necessity to adapt to more frequent and unpredictable climate shocks, which add to an already challenging humanitarian situation. The 2022 floods, causing widespread devastation and displacing millions, will not remain an isolated event. More climate shocks of similar magnitude will only exacerbate the already precarious humanitarian situation, leading to heightened levels of hunger, malnutrition, and increased susceptibility to water-borne diseases among the affected populations.

“Limited funding resources, coupled with competing global crises, further compound the difficulties and have made the recovery and restoration efforts an uphill task. With the activation of a new Loss and Damage fund, we hope to better respond to those shocks in real time”

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