Context:
US has withdrawn from the board of the Loss and Damage Fund.
Loss and Damage:
- Lack a universally agreed-upon definition within the UN Framework Convention on Climate Change (UNFCCC)
- 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.
Loss and Damage Fund:
- Created to provide financial and technical assistance to economically developing nations that were incurring L&D due to climate change.
- Aims to tackle the gaps that current climate finance institutions such as the Green Climate Fund do not fill.
- Evolution –
- For over 30 years, developing nations have called for affluent countries to acknowledge their role in historic pollution, which has significantly contributed to climate change.
- COP 19 (2013) – The formal agreement at the 19th Conference of the Parties (COP 19) to the UNFCCC in Warsaw, Poland, led to the establishment of the Loss and Damage Fund.
- COP 25 (2019) – The Santiago Network for Loss and Damage was established, but no funds were committed at this stage.
- COP 27 (2022) – After intense negotiations, representatives agreed to set up the Loss and Damage Fund. A Transitional Committee was established to prepare recommendations for the fund’s operation.
- COP 28 (2023) – The fund was operationalized, with the World Bank serving as the interim trustee for 4 years; Around USD 700 million has been pledged by several countries, including notable contributions from the UAE, United Kingdom, Japan, United States, and European Union.
- COP 29 (2024) – Discussions at COP 29 focused on achieving an extensive international climate finance agreement, with developing countries hoping for substantial commitments from wealthy industrialized nations
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
Source: HT
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.