Loss and Damages (L&D) Fund  

10 Nov Loss and Damages (L&D) Fund  

This article covers “Daily Current Affairs” and the topic details “Loss and Damages (L&D) Fund”. This topic has relevance in the “Ecology and Environment” section of the UPSC CSE exam.

For Prelims:

What is Loss and Damages (L&D) Fund?

What is COP?

For Mains:

GS3:  Ecology and Environment

Why in the news?

As the climate crisis escalates, attention is centred on two critical terms: adaptation and ‘loss and damage’ (L&D). Adaptation involves proactive responses and deliberate choices made by communities and countries to prepare for and cope with climate-related challenges. 

Understanding Loss and Damage

• Loss and damage encompass negative consequences from unavoidable climate change risks such as rising sea levels, prolonged heatwaves, desertification, sea acidification, and extreme events like bushfires, species extinction, and crop failures.
• With the climate crisis escalating, these events are expected to occur more frequently, leading to increasingly severe consequences.

Loss and Damages (L&D) Fund 

• In 2013, at the 19th Conference of the Parties (COP 19) to the United Nations Framework Convention on Climate Change (UNFCCC) in Warsaw, Poland, representatives of member countries formally agreed to establish the Loss and Damage (L&D) fund.
• The Loss and Damage Fund aims to provide financial assistance to nations most vulnerable and significantly impacted by the effects of climate change.
• It targets filling gaps left by existing climate finance institutions, including the Green Climate Fund, which fell short by at least US$17 billion in 2020 against the pledged US$100 billion for developing countries.

Challenges and Prerequisites for Effectiveness

• To be effective, the fund must address the root cause of climate change, which involves reducing emissions.
• Without a drastic reduction in emissions, more countries will experience the devastating effects of climate change.
• Urgent action is needed to allocate resources for mitigation, adaptation, and loss and damage, ensuring climate change does not undermine efforts to achieve the Sustainable Development Goals.

UN Framework Convention on Climate Change (UNFCCC)

• The UN Framework Convention on Climate Change (UNFCCC), initiated in 1994, lays down broad principles guiding the global effort to combat climate change.
• It explicitly acknowledges the differentiated responsibility of nations, emphasising that affluent countries have an obligation to provide both financial assistance and technological support to developing nations in their climate change mitigation and adaptation endeavours.

Financial Commitments and Technological Support

• In 2009, a significant commitment was made by developed countries to contribute US$100 billion annually from 2020 onwards.
• This commitment aimed to assist developing nations in combatting climate change, recognising their financial challenges.

Warsaw International Mechanism (WIM)

• The Warsaw International Mechanism (WIM) for Loss and Damages was established in 2013.
• It represents the first formal acknowledgement of the need to compensate developing countries struck by climate disasters.
• The mechanism recognises the unique challenges faced by these nations and underscores the importance of addressing loss and damages resulting from climate-related disasters.

Sources: ‘Loss and damage’ fund talks leave developing nations at new disadvantage | Explained – The Hindu 

Download plutus ias current affairs eng med 10th Nov 2023

Q1. With reference to Loss and Damages Fund, consider the following statements: 

1. The Loss and Damages Fund was agreed to establish under the Warsaw International Mechanism.
2. The Fund aims to provide financial assistance to all nations impacted by the effects of climate change.

Which of the statements given above is/are correct?

(a) 1 only

(b) 2 only

(c) Both 1 and 2 

(d) None 

Check Answer

Q2. Consider the following:

1. UN Framework Convention on Climate Change (UNFCCC) has near universal membership (198 Parties) and is the parent treaty of the Cartagena Protocol and Nagoya Protocol. 
2. UNFCCC was established in the 1992 United Nations Conference on Environment and Development (UNCED), also known as the Rio Earth Summit.
3. The Convention acknowledges the differentiated responsibility of nations. 

How many of the abovementioned statements are correct?

(a) Only one 

(b) Only two 

(c) All three 

(d) None

Check Answer

Q3.  Evaluate the significance of the Loss and Damage (L&D) Fund and its role in providing financial assistance to vulnerable nations.

Gaurav N