$19 mn Loss & Damage funding pledged by Sweden at COP29, bringing total to $720 mn

Baku (The Uttam Hindu): With the world getting hotter and more dangerous, the Azerbaijan Presidency of the 2024 UN Climate Change Conference (COP29) has successfully secured funding for the Loss and Damage Fund reaching $720 million with a huge donation by Sweden of $19 million. Sweden on Tuesday announced a contribution to a new fund that aims to help particularly vulnerable countries manage climate-related loss and damage on the second day of the two-week-long climate summit in Baku that brings together negotiators from nearly 200 countries.

The Fund for responding to Loss and Damage is under the Paris Agreement and the UN Framework Convention on Climate Change. Loss and damage is a general term used in UN climate negotiations to refer to the consequences of climate change that go beyond what people can adapt to; for example, the loss of homes and lives during extreme floods. This also includes situations where adaptation options exist, but a community doesn't have the resources to access or utilise them. As of now, there is no official definition of loss and damage under the UN.

More and more countries are being affected by climate change. At last year's COP28 in the United Arab Emirates, a decision was taken to introduce a new fund to manage reconstruction in response to extreme weather and slowly rising sea levels. Efforts are now ongoing to operationalise the Fund, for which a secretariat has recently been established at the World Bank. To this end, Sweden has announced SEK 200 million in support of the new Fund. "Through this Fund, Sweden will support vulnerable countries and people in their response to the devastating consequences of natural disasters. Sweden's support will help countries better prepare for -- and manage -- the consequences of climate change, which could reduce the need for large-scale humanitarian operations following a crisis. Sweden is already a major donor to similar initiatives, which is why we now want to help this new Fund develop into an effective supplement," says Minister for International Development Cooperation and Foreign Trade, Benjamin Dousa.

A total of 23 other countries have made pledges to this new Fund. Sweden's contribution of SEK 200 million makes it the 11th largest donor. Sweden particularly welcomes new donors that have not traditionally been climate finance donors. Loss and damage have been a key priority in the COP29 Presidency's plan to enhance ambition and enable action. The Presidency has pushed for progress across all parts of the loss and damage landscape throughout the year. Tuesday's vital win for climate-vulnerable communities is the result of years of work across borders and organisations. Parties made significant progress at COP27 in Egypt and COP28 in the UAE by establishing and providing for the operationalisation of the Fund.

This year, the COP29 Presidency has worked intensively with the Fund Board and the World Bank, alongside donor countries, to complete the preparations for today's breakthrough. This includes hosting the third meeting of the Fund Board in Azerbaijan in September, where significant progress was made to operationalise the Fund, laying the groundwork for disbursing the much-needed financial support starting in 2025. The selection of Ibrahima Cheikh Diong as the Fund's Executive Director further enhanced the institutionalisation of the Fund.

These developments will build momentum as Parties work to reach a balanced package of outcomes at COP29. "This progress will allow us to finally turn pledges into real support. That means that funding will be able to flow in 2025. We should reflect on what this breakthrough will mean for real people. It means houses being rebuilt, people being resettled, and lives and livelihoods saved," said COP29 President Mukhtar Babayev. "But our work is not done. Now, the Fund needs to identify projects to get support flowing. All countries that have pledged money must complete their contribution agreements. And we need more pledges so we can meet the urgent needs of climate change victims."

Responding to the operationalisation of the Fund, climate activist Harjeet Singh said, "Accelerating the operationalisation of the Fund for responding to Loss and Damage is indeed a significant milestone, but let's be clear: it's also decades overdue. Rich countries have a responsibility to support vulnerable nations and communities that have long advocated for this Fund." "As climate impacts worsen, the cost in lives and livelihoods continues to rise. We cannot afford complacency when hundreds of billions of dollars are needed to help people recover and rebuild from a crisis they did not create. The world is watching, and this Fund must not only meet but set the highest standards of equity, efficiency, participation, and accountability to deliver the full support these communities urgently deserve."

UN Secretary-General António Guterres called on countries to step up contributions to a financial mechanism to assist developing countries affected by climate change. "But its initial capitalisation of $700 million doesn't come close to righting the wrong inflicted on the vulnerable. As much as $700 million is roughly the annual earnings of the world's 10 best-paid footballers. It does not even account for a quarter of the damage in Vietnam caused by Hurricane Yagi in September. We must get serious about the level of finance required."

In this regard, UN Chief Antonio Guterres urged countries to agree on a new climate finance goal that taps innovative resources. "We need to implement solidarity levies on sectors such as shipping, aviation, and fossil fuel extraction -- to help fund climate action. We need a fair carbon price," he said.