A redefining moment for loss and damage funding
By Jaspreet Kindra
About a decade ago I met a teenager, Momina Ali. Every three to four days she had to take a day off school to search for water for her family in one of the world’s hottest places: Ethiopia’s Afar Region.
It was only a matter of time before Momina and her family would have to leave their home, as her village had experienced a steady decline in rainfall over the years. Families were way past the time to adapt and were already staring at the face of climate change-related loss and damage.
But at that time, the UN climate negotiations were still struggling to get tangible commitments on adaptation, let alone put climate change-related loss and damage on its official agenda.
Now, 10 years later, the world finally has the Fund for Responding to Loss and Damage (FRLD). But its funding levels are inadequate in the context of overwhelming need. As of June this year, 27 countries had pledged about US$789 million to the fund, of which only $361 million had been paid.
Campaign to motivate fund flow
Earlier in July, the dismal funding outlook prompted representatives of developing countries and civil society to launch the Fill the Fund campaign at the FRLD annual board meeting in the Philippines.
They pointed out that while funding needs for economic damage alone are an estimated $395 billion in 2025, the FRLD has only $348 million available.
As rich countries tighten their purse strings and make brutal cuts to aid funding, Harjeet Singh, convenor of the Fill the Fund campaign, explained how the campaign could still get results: “We will do this by strengthening the global movement that connects the dots for citizens in the Global North, showing them that the same oligarchs and corporate polluters profiting from the climate crisis are also undermining their own communities.”
He added: “This isn't about aid; it's about accountability. It's a common fight for justice, and through solidarity and public pressure we will force them to pay their climate debt.”
The campaign is also an attempt to place the FRLD and loss and damage on the global agenda, at a time when climate, environment, the urgency to act and the “cruciality of support” are “taking a back seat” well behind “other global issues and crises,” reasoned Mohamed Nasr, Egypt’s representative on the FRLD board.
Motivation to fund
This week, the fight for climate justice and funding received its biggest boost: the United Nations highest court, the International Court of Justice (ICJ), affirmed that countries are legally bound to reduce greenhouse gas emissions. If they fail, they may have to pay reparations to countries affected by loss and damage due to human-caused climate change.
Daniel Lund, Fiji’s representative on the FRLD board, called the ICJ Advisory Opinion on the Obligations of States with Respect to Climate Change “a major legal landmark, which fully supports the rationale, intention, scope and purpose of the FRLD.”
He added: “We hope in the context of this legal opinion, developed countries will calibrate their engagement with the Fund with the legal explanation and context provided by the ICJ, and recognize that supporting the scale-up of the resources of FRLD and commitment to long-term capitalization goals of the Fund is aligned with core obligations under international law.”
According to Singh, the ICJ opinion "provides the legal and moral weight to our demand that the Fund must be filled with reparations from the wealthy nations and corporate polluters who caused the climate crisis."
But framing the incentive to fund is also critical.
Lund reasoned: “Climate risks are transboundary in many ways – a crisis in the developing world will quickly translate to major implications for developed countries through our interconnected economy. Any challenges with illegal migration experienced in the current context will pale in comparison to the cross-border migration surge and human rights issues that we will be confronted with if global average temperatures fully overshoot the 1.5-degree guardrail.”
While we wait…
In the first half of this year, people in developing countries battled with record heatwaves and deathly floods.
How do these communities cope while waiting for the funds? A toolbox of solutions could be the answer.
Singh said the coalition will continue to “champion innovative sources of finance by demanding an end to fossil fuel subsidies, and levying a Climate Damages Tax on oil, gas and coal companies.”
The coalition also supports solidarity levies on sectors such as international shipping and flights. He added: “These are not abstract ideas; they are viable, scalable mechanisms to raise the hundreds of billions [of dollars] needed annually for addressing loss and damage.
“This is how we ensure new, predictable finance flows directly to front-line communities while penalizing the polluters who are worsening the climate crisis."
The Small Island Developing States (SIDS) “have taken matters into their own hands and designed the Debt Sustainability Support Service [DSSS], a systemic solution to a systemic crisis,” said Ritu Bharadwaj, Director, Climate Resilience, Finance and Loss & Damage, at the UK-based International Institute for Environment and Development.
Bharadwaj explained that DSSS “is not a silver bullet but a comprehensive service that brings together debt restructuring, contingency instruments, like insurance, investment in climate-resilience infrastructure and expert legal advice. These are practical solutions that allow countries to act, even in the absence of cash from the Loss and Damage Fund.”
Antigua and Barbuda have already adopted DSSS. Bharadwaj said the next step “is to integrate it within the delivery model of climate funds,” including the FRLD, “to ensure that resilience-building is not undermined by unsustainable debt burdens.
”Initiatives such as DSSS and debt for climate swaps were identified in the COP27 outcome document, said Nasr. They do not create an “additional burden on developing countries, and also do not add a layer of protectionism and taxation on trade flows from the Global South.”
What about the response now?
However, while there is a growing need to “fill” the FRLD, funding for the humanitarian response to the climate crisis must also be urgently bolstered, said Zinta Zommers, OCHA's Scientific Lead on climate change.
The Global Humanitarian Overview 2025 needs $44 billion to assist 180 million vulnerable people dealing with emergencies such as floods, droughts and conflicts. But more than halfway through the year, just $5.6 billion – less than 13 per cent – has been received.
Zommers added: "Ultimately, it will be possible to effectively minimize and address loss and damage only when funding for both immediate life-saving needs and longer-term recovery is available and works together in a complementary manner."
We can only hope it’s not too late, and that children such as Momina will not continue disrupting their education to search for water.