Loss and Damage Fund – A Most Noble Thing
One of the most significant accomplishments of the COP28 is the approval of the Loss and Damage Fund which came as a milestone within the climate finance, and as one of the core action steps in taking accountability of the negative impacts of climate change. The Loss and Damage Fund in all its intents is the first step to taking accountability – and acknowledgement that climate change has created disproportionate negatives impacts, with the least contributors to it being highly affected. In consequence, their economies are now crippled by rising dependence in foreign debt and foreign aid to meet the needs of their citizenry including high floods, extreme droughts, and general economic losses that are associated with adverse climate change. The global conscious has since been increasingly been seared with the ecological debt of the costs of fossil fuel dependence development on the global commons. In no small way, there should be a dedicated commitment to offset the ecological debt that exists. But the greatest woe is whether these efforts may be way too late to recover the biodiversity that exists. Nevertheless, it is a most noble effort, and a far more useful resolve to use the loss and damage fund to create adaptation and resilience in the communities that have been adversely affected by this blight of climate change. At the same time, it is imperative to offer dedicated efforts to preserve our ecologies and environment the ice in the Antarctica for the well-being of the polar bears and for the wellbeing of our coastlines and coastal communities, and so forth and so on. For ultimately, we are codependent.
Loss and Damage Fund – Where is the Money?
With the estimated annual loses per year being $400 billion for the developing states, it is exciting to see the creation of the loss and damage fund. But more importantly, it is plausible to ask – where is the money? Fiduciary experts will state that the loss and damage fund needs real framework, targets and obligations. In its current framework it is inadequate to cater for the needs of the developing nations that are vastly affected by the climate crisis. It occurs that the current Loss and Damage fund only suits the overall parameter of commitment and in a way government-to-government corporate social responsibility. Looking at the countries that are vastly affected, the Loss and Damage fund has the makings of foreign aid, and serves only as a drop in the ocean --- and if it is to be effective more structural aspects have to be put in place. As it stands, the current commitment amounts to roughly $430 million. The UAE has committed $100m, the UK $75m, the US $24.5 m, Japan $10m and Germany $100 m. The word that exists at the moment is hope other rich nations such as Australia shall join in. So, as the accounts stand, the Loss and Damage kitty is 1/1000 in effort toward meeting the $400 billion loss and damage.
Loss and Damage Fund --- Climate Foreign Aid?
Further, there are other beleaguering questions such as whether the fund is a form of climate aid, or it is in its nature a dignified commitment to climate crisis. This distinction which often confers equal authority and obligations among parties is needed when making such commitments. Else, in the case of voluntary actions, on their own, the loss and damage comes off as a form of foreign aid to the world’s poor. It is therefore necessary to provide the right measures and metrics that dignify the fund, and cast away all aspersions that are likely to be associated with aid. As with all forms of aid, donor fatigue is likely to kick in and reengaging on pledges made is a common thing experienced in the post Paris climate financing journey.
In addition, the element of what is being resolved by the fund, places a greater social economic responsibility on how it’s developed, and the related architecture around it. Conscious that the global commons are under serious threat, from the loss of biodiversity to human displacement from their natural habitats to loss of entire species; the emphasis should be put on restoration efforts of these losses. As regards to human ecosystem damages, the general accountancy ought to be inclusive to consider the various variables that are damaged by climate crisis. In this respect, key questions arise such as - How can that loss be accounted for, is there a price that can be paid to quell it, and how is it accounted for, so on and so forth. It is apparent that the accounting for the losses that are made goes beyond the economic quantification that may often beguile us into thinking that enough has been done. In doing so, the conscience of the emitters or polluters is quelled while the non-emitters are derided as cry-babies who cannot cope with the ‘natural disasters’. While not explicitly stated, the loss and damage fund is likely to be misconstrued in diplomatic politic as a form of climate foreign aid. This does not dignify or offer firm commitments to the parties.
Loss and Damage Fund - Climate Altruism?
In a philosophical scenario, we can only expect that the commitments to slowing the GHG and carbon emissions is predicated on real commitments rather than on the superfluous appearance of commitment. If we take Climate Fund as a form of climate altruism, we ought to consider its basis, and rationale. Altruism must be based on a core standard, that the beneficiaries are identified, that there is a system of practice and approach that empowers the people. Common principles in global commons altruism demand that there is equitable distribution, and that there is optimal benefit. In philosophy, the axis of utilitarianism and the high ideal of moral theory ought to be at par. For if in one hand the fossil fuel emitters say ‘let’s pay them out’, while there is no sufficient inclination to the motive for which the loss and damage fund is created, it is likely to fall short of its expectations. In a way, it puts the climate affected nations to be portrayed consistently as victims rather than core actors with real economies, and ambitions just as the developed nations do. The motives thereby should not just be a public relations act that is aimed at dissuading the public outcry or reticence that comes with being a fossil fuel industrialist while commenting on the status of the 1.5 degree reduction target by 2025.
I think these are the core questions that need to be addressed even as the Loss and Damage Fund propositions are brought to consideration. Among these is – what is climate reparation, what are the extents of climate reparation, and why climate reparation? Reparations are commitments given for a wrong done and is usually offered to the offended or their beneficiaries to compensate for a given wrong as an appeasement. It is often the financial commitment to show retribution for the wrong. In doing a reparation, the offender admits their mistake and the damages made to the persons. In often cases, such usuries are obligatory.
In view of this, the concept of Loss and Damage Fund, therefore, should act only to the extent of offering reparations and we ought to be careful that it does not become a license to continued pollutions. A similar dichotomy is made in the carbon credits markets, whereby the climate capitalists have to harness all the current efforts towards long term sustainability. Hence, all actors whether acting out of a seared conscience and having come to light pay back – anecdotally up to four times – of what they damaged or stole from the global commons; or having sought to embraced green industrialization and market based ecosystems, the bell tolls for real action. Otherwise, deprived of these commitments, all acts shall be vain. It is in the best hopes of climate devotees to witness the fruition of climate efforts and commitments even unto the restoration of the Shangri-La which has been destroyed in the Babel of our varied ambitions.
The author, Meshack Nzioka is the Founder and Managing Director of Waka Africa