3 Questions on Loss and Damage Funding to Tackle Before COP28

The briefing outlines critical design considerations for the Transitional Committee tasked with operationalizing the loss and damage fund agreed upon at COP27. It identifies three primary challenges: determining whether the fund should be a gap fund, a catalytic fund, or a mixed model; defining the boundaries between loss and damage, adaptation, and humanitarian finance; and identifying reliable funding sources. The author suggests that the committee avoid the pitfalls of existing UNFCCC mechanisms—such as voluntary contribution cycles that lead to rushed proposals and slow disbursements—by studying diverse financial models, including pooled funds and the EU's Structural Funds, to ensure predictability and fast disbursement for vulnerable countries.

• The Transitional Committee must decide on the fund's structure, with options including a 'gap fund' for projects lacking traditional financing, a 'catalytic fund' to mobilize private investment via seed funding, or a mixed model combining both to support both immediate disaster response and long-term capacity building.
• The fund's scope must address the intrinsic link between loss and damage and adaptation, ensuring that responses to climate impacts also enhance future adaptive capacity to avoid subsequent crises, while maintaining a clear distinction to prevent the diversion or relabeling of adaptation finance.
• Existing UNFCCC financial models relying on voluntary country contributions at regular intervals are criticized for causing project cancellations, rushed proposals at cycle ends, and slow disbursements when resources run low.
• Potential funding sources for the loss and damage fund include contributions from those most responsible for the climate crisis, private equity, taxes on fossil fuel windfall profits, or mechanisms like Special Drawing Rights from the IMF.

APA

World Resources Institute (2023). 3 Questions on Loss and Damage Funding to Tackle Before COP28. https://www.wri.org/insights/loss-and-damage-funding-questions-transitional-committee

Chicago

World Resources Institute. 3 Questions on Loss and Damage Funding to Tackle Before COP28. 2023. https://www.wri.org/insights/loss-and-damage-funding-questions-transitional-committee.

Wikipedia

{{cite report |author=World Resources Institute |title=3 Questions on Loss and Damage Funding to Tackle Before COP28 |date=17 March 2023 |url=https://www.wri.org/insights/loss-and-damage-funding-questions-transitional-committee |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{worldresourcesinstitute2023questions, author = {{World Resources Institute}}, title = {{3 Questions on Loss and Damage Funding to Tackle Before COP28}}, institution = {World Resources Institute}, year = {2023}, month = mar, url = {https://www.wri.org/insights/loss-and-damage-funding-questions-transitional-committee}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }