Loss and Damage Fund

• 14 Sep 2024

Source: TH

Why in News?

• In the aftermath of the catastrophic landslides that recently impacted Kerala's Wayanad district, a critical discourse has arisen regarding the eligibility of subnational entities to claim compensation through the Loss and Damage Fund (LDF) under the United Nations Framework Convention on Climate Change (UNFCCC).

Note

• The Wayanad district of Kerala experienced a devastating landslide disaster in early July 2024 due to heavy rainfall and fragile ecological conditions.
• The landslides in Chooralmala and Mundakkai villages killed at least 144 people and injured 197, after the district received over 140 mm of rain in 24 hours, saturating the soil and weakening its binding to the underlying hard rocks.

What is the Loss and Damage Fund?

• Establishment and Goal: The Loss and Damage Fund (LDF) was established at the 27th UNFCCC Conference of Parties (COP27) held in 2022 in Egypt to provide financial support to regions suffering both economic and non-economic losses caused by climate change.
  • In COP28, member countries reached an agreement to operationalize the Loss and Damage (L&D) fund.
  • The Fund addresses losses resulting from extreme weather events and slow-onset processes, such as rising sea levels.
• Governance: The LDF is governed by a Governing Board, which is responsible for:
  • Determining the allocation of the Fund’s resources.
  • The World Bank serves as its interim trustee.
  • The Governing Board is currently developing mechanisms to facilitate access to the Fund’s resources, including Direct access, Small grants, Rapid disbursement options.
• Concerns:
  • Despite its intended purpose, there are ongoing concerns that:
    • Climate funds, including the LDF, may be too slow to be immediately accessible following a disaster.
    • This issue is particularly acute for local communities at the sub-national level.
  • It is anticipated that the LDF may face similar challenges in ensuring timely access to its resources.

India’s Role in Climate Finance

• India has incurred damages exceeding USD 56 billion due to weather-related disasters between 2019 and 2023.
  • India's National Climate Action Policy and budgets have predominantly emphasised mitigation efforts rather than adaptation.
• As per Union Budget 2024, the Government will come up with a taxonomy for climate finance for enhancing the availability of capital for climate adaptation and mitigation.
  • In the absence of clear guidelines for accessing loss and damage funds within India, frontline communities remain at risk.
• India’s Initiatives regarding Climate Finance include:
  • National Adaptation Fund for Climate Change (NAFCC):
  • National Clean Energy Fund: It was created to promote clean energy, and funded through an initial carbon tax on the use of coal by industries.
  • National Adaptation Fund: It was established in 2014 with a corpus of Rs. 100 crores with the aim of bridging the gap between the need and the available funds.

UPSC Civil Services Examination, Previous Year Question (PYQ)

Prelims

Q. “Momentum for Change: Climate Neutral Now” is an initiative launched by (2018)

(a) The Intergovernmental Panel on Climate Change

(b) The UNEP Secretariat

(c) The UNFCCC Secretariat

(d) The World Meteorological Organisation

Ans: (c)

Q. With reference to the Agreement at the UNFCCC Meeting in Paris in 2015, which of the following statements is/are correct? (2016)

1. The Agreement was signed by all the member countries of the UN and it will go into effect in 2017.

2. The Agreement aims to limit the greenhouse gas emissions so that the rise in average global temperature by the end of this century does not exceed 2ºC or even 1.5ºC above pre-industrial levels.

3. Developed countries acknowledged their historical responsibility in global warming and committed to donate $ 1000 billion a year from 2020 to help developing countries to cope with climate change.

Select the correct answer using the code given below:

(a) 1 and 3 only

(b) 2 only

(c) 2 and 3 only

(d) 1, 2 and 3

Ans: (b)