The compensation fund could help fishers from small island and coastal states, but many challenges remain.
A fisher on a beach in southern Jamaica. Countries like it could benefit from the loss and damage fund, which aims to offer compensation for harm incurred from climate change, but experts fear calculating claims may prove challenging (Image: Ron Giling / Alamy)
Hundreds of millions of dollars have been pledged to compensate for “loss and damage” caused by climate change. Hundreds of billions more will be needed.
When the pledges were made by various governments last year, they were widely celebrated. But some experts fear the much-hailed fund being set up to deliver this climate finance faces significant hurdles if it is to address damage wrought on oceans and some of the world’s poorest people.
Changes brought about by climate change are already being seen in increased sea temperatures, mass coral bleaching and ocean acidification.
But while governments have channelled increasing sums of money towards dealing with climate change in recent years, ocean issues have often missed out. “Unfortunately, the ocean is largely viewed as either being out of sight and out of mind, or too big to fail,” says Karen Sack, executive director of the Ocean Risk and Resilience Action Alliance (ORRAA), which works to incentivise investment in coastal and ocean environmental projects.
Loss and damage, the third pillar of climate finance
As it becomes clearer how much damage climate change is already doing and could yet do, calls have grown for richer countries responsible for the bulk of historical greenhouse gas emissions to provide money to poorer ones in the form of climate finance.
So far, this money has gone largely towards climate change “mitigation”, meaning action to reduce greenhouse gas emissions – such as shutting down coal-fired power stations – or to remove them from the atmosphere. It has also gone towards “adaptation”: actions to cope with a climate-changed world, like building stronger sea walls.
A “third pillar” of payments, for loss and damage incurred due to climate change, has proven more controversial.
At the most recent global climate talks, COP28 in Dubai, the establishment of a Loss and Damage Fund was finally agreed after years of discussion. Some USD 700 million was pledged to the nascent fund, which the World Bank was given an initial four-year stint in charge of.
