Context:
Article in the Hindu – Importance of ‘loss and damage’ funds
Loss and Damage
- Loss and damage lack a universally agreed-upon definition within the UN Framework Convention on Climate Change (UNFCCC)
- Varying interpretations among different groups.
- Generally, loss and damage refer to the adverse effects of climate change that occur despite mitigation and adaptation efforts.
- Can be broadly categorized into economic and non-economic aspects.
- Economic loss involves measurable monetary impacts, such as costs for rebuilding infrastructure or revenue loss from destroyed crops.
- Non-economic loss encompasses impacts challenging to assign a monetary value, including trauma from climate events, community displacement, and biodiversity loss.
About Loss and Damage Fund
- It was being created to provide financial and technical assistance to economically developing nations that were incurring L&D due to climate change.
- Loss and Damage Fund tackles the gaps that current climate finance institutions such as the Green Climate Fund do not fill.
Historical perspective:
- Formally agreed – 19th Conference of the Parties (COP 19) to the United Nations Framework Convention on Climate Change (UNFCCC) in Warsaw, Poland, in 2013.
- COP 25 – Santiago Network for L&D was set up – but countries didn’t commit any funds.
- COP 26 – Glasgow Dialogue on finance for L&D was established to continue discussions over the next three years on the fund.
- COP 27 – representatives of the UNFCCC’s member states agreed to set up the L&D fund and a Transitional Committee (TC) to figure out how the new funding mechanisms under the fund would operate.
- The TC was also to prepare recommendations that countries would consider, deliberate on, and potentially adopt by COP 28.
Green Climate Fund:
- A financial entity created under the United Nations Framework Convention on Climate Change
- Objective – To aid developing nations in addressing climate change through adaptation and mitigation efforts.
- Headquartered in Incheon, South Korea
Must read article for mains – Loss and Damage Fund
Previous year question
Which of the following statements regarding ‘Green Climate Fund’ is/are correct?
1. It is intended to assist the developing countries in adaptation and mitigation practices to counter climate change.
2. It is founded under the aegis of UNEP, OECD, Asian Development Bank and World Bank.
Select the correct answer using the code given below. [UPSC Civil Services Exam – 2015 Prelims]
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
Answer: (a)
Explanation:
The Green Climate Fund (GCF) is a fund within the framework of the UNFCCC.
It was founded as a mechanism to redistribute money from the developed to the developing world, in order to assist the developing countries in adaptation and mitigation practices to counter climate change. Hence statement 1 is correct.
The Fund is governed and supervised by a Board that will have full responsibility for funding decisions and that receives the guidance of the COP. Hence statement 2 is not correct.
