Critical test for Loss and Damage fund at Bonn talks

Experts call for faster access to climate finance, stronger support for non-economic losses, and greater accountability as vulnerable countries grapple with mounting climate impacts.

BY MARY KYANYI

Ahead of the 64th session of the UNFCCC Subsidiary Bodies (SB64), the Fund for Responding to Loss and Damage (FRLD) came under close scrutiny, with negotiators and observers looking for concrete movement on resource mobilisation, access arrangements and the delivery of support to vulnerable communities affected by climate change.

Established at COP27 in 2022 and operationalised in 2023, the FRLD was designed to help developing countries recover from climate-related losses that cannot be prevented through mitigation or adaptation measures. While the fund’s initial financing package of approximately US$250 million under the Barbados Implementation Modalities (BIM) has been welcomed as an important milestone, experts warn that significant gaps remain.

“The true measure of the Fund for Responding to Loss and Damage is not in its institutional arrangements or governance structures, but in its ability to deliver direct, adequate and timely finance to communities recovering from climate impacts,” said Amos Wemanya of Power Shift Africa.

The fund is intended to address both economic and non-economic losses resulting from climate change. These include damage to infrastructure, homes and livelihoods, as well as less visible impacts such as displacement, loss of cultural heritage, biodiversity decline, mental health challenges and the breakdown of social systems.

Recent floods across Mozambique, Kenya, Ethiopia, Morocco and South Africa have shown the urgency of addressing both forms of loss. While damaged roads, schools and homes can be quantified financially, the emotional trauma, disruption of education and loss of community networks often remain unaccounted for.

“Non-economic losses remain one of the most overlooked dimensions of climate change, despite their profound effects on lives, cultures and communities,” Wemanya said.

Experts argue that conventional valuation methods are poorly suited to measuring such losses, creating challenges for compensation and recovery efforts. Technical support provided through the Santiago Network is expected to play a key role in helping countries such as Kenya, Rwanda and Zambia develop frameworks to assess and quantify non-economic losses.

Concerns also persist about the scale and predictability of funding. Although international pledges to the FRLD have surpassed US$700 million, many developing countries have stressed that pledges do not automatically translate into signed contribution agreements or actual disbursements.

The issue is particularly significant for Africa, which is estimated to lose approximately US$200 billion annually due to climate-related losses and damages. Despite annual climate finance needs estimated at US$277 billion, the continent currently receives less than 11 per cent of the required financing through existing climate funds and mechanisms.

At SB64, negotiators are expected to focus on implementation issues, including resource mobilisation, direct access arrangements, and collaboration with the Santiago Network. Stakeholders are urging parties to ensure that funding reaches affected communities quickly and without the bureaucratic hurdles that have slowed access to other climate finance mechanisms.

Observers say the Barbados Implementation Modalities offer a promising foundation, particularly through their emphasis on direct budget support and country ownership. However, questions remain about whether local institutions will have sufficient capacity and authority to manage resources effectively and transparently.

Mary Kyanyi is a Climate Adaptation Fellow at Power Shift Africa.