How to make loss and damage finance fair for the Global South

This policy brief by the South African Institute of International Affairs examines the current state of loss and damage (L&D) finance within the UNFCCC framework, evaluating the outcomes of COP28 and outlining strategic priorities for the Global South ahead of COP29 and COP30. It advocates for L&D to be treated as a distinct third pillar of climate action, emphasizing the need for grant-based financing, equitable distribution, and a unified negotiating front to ensure climate justice for the most vulnerable communities.

• Loss and damage (L&D) is framed as a matter of climate justice, with the argument that the most vulnerable communities are entitled to compensation for irreversible climate impacts. The document notes that between 2000 and 2019, the economic cost of L&D resulting from climate impacts was at least $2.8 trillion.
• The Global South is encouraged to maintain a unified negotiating position through the Group of 77 (G77) and China. Key priorities for the New Collective Quantified Goal on Climate Finance include securing a quantum of financing that matches developing countries' needs and establishing separate sub-goals for adaptation and L&D to prevent the double counting of financial commitments.
• There is a critical need for climate finance to be provided as grants rather than loans to avoid increasing the external debt of developing countries. In 2021, of the $69.6 billion received by developing countries for climate action, $53.2 billion was in the form of new debt, with only about half provided on concessional terms.
• The Loss and Damage Fund, operationalised at COP28, represents a significant step forward by making all developing countries eligible for funds and establishing a board with 14 representatives from developing countries and 12 from developed countries. However, initial pledges of $792 million are considered far below the actual needs, with some estimates suggesting L&D costs could reach $400 billion annually by 2030.
• The Santiago Network on Loss and Damage is intended to provide technical assistance to developing countries. While its secretariat will be hosted by a UN consortium (UNDRR and UNOPS) with a head office in Geneva, the document notes that current pledges from the EU, Switzerland, and the UK support the network's structure rather than providing direct funds to affected communities.
• Brazil is positioned as a pivotal actor in upcoming negotiations due to its 2024 G20 presidency and its role as host of COP30 in 2025. Brazil, alongside India and South Africa in the G20 troika, has the opportunity to prioritize the climate finance agenda for the most vulnerable and reform the International Monetary Fund's operating model and green monetary policies.
• Non-governmental think tanks and academic institutions from the Global South are identified as essential for supporting developing countries. Their role includes providing technical assistance for accessing the Loss and Damage Fund and the Santiago Network, and helping governments develop strategic national reports such as Biennial Transparency Reports (BTRs) and Nationally Determined Contributions (NDCs).

APA

South African Institute of International Affairs (2024). How to make loss and damage finance fair for the Global South. https://saiia.org.za/research/how-to-make-loss-and-damage-finance-fair-for-the-global-south/

Chicago

South African Institute of International Affairs. How to make loss and damage finance fair for the Global South. 2024. https://saiia.org.za/research/how-to-make-loss-and-damage-finance-fair-for-the-global-south/.

Wikipedia

{{cite report |author=South African Institute of International Affairs |title=How to make loss and damage finance fair for the Global South |date=25 July 2024 |url=https://saiia.org.za/research/how-to-make-loss-and-damage-finance-fair-for-the-global-south/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{southafricaninstituteofinternationalaffairs2024how, author = {{South African Institute of International Affairs}}, title = {{How to make loss and damage finance fair for the Global South}}, institution = {South African Institute of International Affairs}, year = {2024}, month = jul, url = {https://saiia.org.za/research/how-to-make-loss-and-damage-finance-fair-for-the-global-south/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }