About Loss and Damage Fund (LDF):
- Loss and damage refers to the negative consequences that arise from the unavoidable risks of climate change, like rising sea levels, prolonged heatwaves, desertification, the acidification of the sea and extreme events, such as bushfires, species extinction and crop failures.
- Establishment: The Fund was established at the 2022 UNFCCC Conference (COP27) in Egypt, to provide financial support to regions suffering both economic and non-economic losses caused by climate change.
- Developing countries, particularly small island states that face the greatest threats from climate impacts, had been demanding financial assistance in case of climate-related disasters, arguing that they were having to suffer due to a problem created by rich and developed countries.
- About $750 million has so far been promised for the fund, of which the US has contributed $17.5 million. The US, in fact, is one of the very few countries to have already transferred its committed amount to the Fund.
- The LDF is overseen by a Governing Board that determines how the fund’s resources are disbursed, with the World Bank serving as the interim trustee tasked with hosting the fund for four years.
Paris Agreement:
- The Paris Agreement is an international accord that was adopted by nearly every country in 2015 to address climate change and its adverse effects.
- Its primary goal is to substantially reduce greenhouse gas (GHG) emissions in a bid to limit global warming in this century to “well below” 2 degrees Celsius above pre-industrial levels while pursuing the means to curb warming to 1.5 degrees.
- The agreement mentions the safer limit of 1.5 degrees based on a fact-finding report which found that breaching the threshold could lead to “some regions and vulnerable ecosystems” facing high risks, over an extended, decades-long period.
- The treaty also requires all Parties (countries which have joined the agreement) to state every five years what they are doing to tackle climate change — what is known as their nationally determined contribution (NDC).
