Loss and Damage fund

• On the opening day of the COP28 summit of UN Framework Convention on Climate Change (UNFCCC) in Dubai, a loss and damage fund to help vulnerable countries cope with the impact of climate change has been officially launched.

ABOUT LOSS AND DAMAGE FUND

• 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.
• 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 changing climate has impacted lives, livelihoods, biodiversity, cultural traditions, and identities.
• It was first announced during COP27 in Sharm el-Sheikh, Egypt, in 2022.
• The World Bank will oversee the loss and damage fund in the beginning, with the source of funds being rich nations, such as the US, the UK and the EU, as well as some developing countries.
• The initial funding is estimated to be $475 million — host UAE pledged $100 million, the European Union promised $275 million, $17.5 million from the US, and $10 million from Japan.