Loss and Damage Fund (LDF) || UNFCCC || UPSC IAS

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Context:

In the wake of Kerala's landslides, a debate has emerged around whether subnational entities can seek compensation through the United Nations Framework Convention on Climate Change (UNFCCC)’s Loss and Damage Fund (LDF).

The Loss and Damage Fund (LDF)

The 'Loss and Damage' (L&D) fund addresses severe climate change impacts that cannot be avoided or adapted to.
At COP 19 in Warsaw, in 2013, the UNFCCC formally established the L&D fund.
At COP 27 in November 2022, UNFCCC members agreed to create the L&D fund and established a Transitional Committee to design its operational mechanisms.
The fund compensates for real losses, including those affecting human rights, well-being, and environmental sustainability.

Coverage:

It aims to provide financial support to regions suffering both economic and non-economic losses caused by climate change.
Covers losses that extend beyond just monetary value.
These include extreme weather events and slow-onset processes, such as rising sea levels.

Economic loss and damage:

Can be directly measured in terms of cost to repair or replace damaged property.
damaged buildings, lost income from disrupted businesses, destroyed crops.

Non-economic loss and damage:

Often involves intangible impacts on people's well-being and cultural identity.
Examples include loss of community cohesion, displacement from traditional lands, psychological trauma, and destruction of cultural sites.

Governing Board

A Governing Board determines how the Fund’s resources are disbursed.
The World Bank serves as the interim trustee of the Board for four years.
The Board is currently developing mechanisms to facilitate access to the Fund’s resources, including direct access, small grants, and rapid disbursement options.

Support mechanism:

Financial support is provided in the form of grants and concessional financing to all countries.
Both developing and developed countries can voluntarily contribute to the fund.

The United Nations Framework Convention on Climate Change (UNFCCC) :

●It is an international treaty that aims to reduce greenhouse gas concentrations and prevent dangerous human interference with the climate system.

●It was signed in 1992 by 154 states at the United Nations Conference on Environment and Development (UNCED), informally known as the Earth Summit, held in Rio de Janeiro.

●The treaty entered into force on 21 March 1994

Parties

●The UNFCCC has 197 parties, which are the countries that have ratified the convention.

Conferences of the Parties (COPs)

●The parties meet annually to assess progress and make decisions. The COP is the supreme decision-making body of the UNFCCC.

Kyoto Protocol and Paris Agreement

●The 1997 Kyoto Protocol and 2015 Paris Agreement built on the UNFCCC.

For further reading:

https://www.iasgyan.in/daily-current-affairs/bonn-climate-change-conference

https://www.iasgyan.in/daily-current-affairs/india-at-cops-over-the-years

Source:

PRACTICE QUESTION

Q. Consider the following statements about “The Loss and Damage Fund (LDF)” recently seen in the news:

1.The fund addresses severe climate change impacts that are non-adaptable.

2.The fund’s coverage includes extreme weather events and slow-onset processes, such as rising sea levels.

3.The United Nations Environment Programme Secretariat acts as the trustee of the fund for governing it.

How many of the statements given above is/are correct?

(a) Only one

(b) Only two

(d) None

Answer : b

Explanation:

Statement 1 is correct:

The Loss and Damage Fund (LDF)

●The 'Loss and Damage' (L&D) fund addresses severe climate change impacts that cannot be avoided or adapted to.

●It was established at the 2022 UNFCCC Conference (COP27) in Egypt.

●The fund compensates for real losses, including those affecting human rights, well-being, and environmental sustainability.

Statement 2 is correct:

Coverage:

●It aims to provide financial support to regions suffering both economic and non-economic losses caused by climate change.

●Covers losses that extend beyond just monetary value.

●These include extreme weather events and slow-onset processes, such as rising sea levels.

Economic loss and damage:

●Can be directly measured in terms of cost to repair or replace damaged property.

●Ex. damaged buildings, lost income from disrupted businesses, destroyed crops.

Non-economic loss and damage:

●Often involves intangible impacts on people's well-being and cultural identity.

●Examples include loss of community cohesion, displacement from traditional lands, psychological trauma and destruction of cultural sites.

Statement 3 is incorrect:

Governing Board

●A Governing Board determines how the Fund’s resources are disbursed.

●The World Bank serves as the interim trustee of the Board for four years.

●The Board is currently developing mechanisms to facilitate access to the Fund’s resources, including direct access, small grants, and rapid disbursement options.