COP27 Establishes ‘Loss and Damages’ Fund For Climate Reparations (UPSC Current Affairs)

Relevance: GS3 - Environment, Disaster, and Disaster Management; GS2 - Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests.

(Source: The Hindu,11/21/22)

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Why in the news?

• An agreement was reached on 20th November at the UN climate summit in Sharm el-Sheikh, Egypt to create a loss and damage (L&D) fund to pay the most vulnerable nations from climate-related disasters.
• A "transitional committee" will provide suggestions for the establishment of the fund and will handle important issues including who will manage the fund, whether contributions from substantial emerging countries are anticipated, and what the fair proportion of donors will be.

CoP 27 CoP Of Loss And Damages (L&D):

• A three-decade-old initiative has made some progress which was first started by the island nation of Vanuatu and the Alliance of Small Island States.
• Definition: Loss &Damages are those that cannot be mitigated (by reducing greenhouse gas emissions) or adapted to (modifying practices to buffer against climate change impacts).
• The most vulnerable poor nations, who are currently suffering the most from natural disasters linked to climate change, will now have a separate fund set aside for compensation.
• In addition to financial loss to property, they also involve loss of livelihoods, the eradication of biodiversity, and the demolition of culturally significant locations. This increases the potential for impacted countries to seek compensation.

Concerns

• The progress on action to keep temperatures from rising beyond 1.5°C of pre-industrial levels was limited.
• These impasses continue to exist how developed nations, which account for the majority of historical emissions, would fulfill a previous commitment to give developing nations $100 billion annually by 2020.
• And whether everyone would agree to stop using fossil fuels altogether, not just coal.
• The language passed at Sharm el-Sheikh simply commits to the creation of a fund; future COP meetings will need to discuss how it will be set up and, most critically, who will contribute how much to it.
• Even though Wallonia (Belgium) and Scotland have only made token donations to such a fund, it is believed that L&D is already worth more than $500 billion.

Way forward

• The European Union pushed hard during negotiations this year to include China, the Arab states, and "big, emerging countries" (which may include India) because they were major emitters.
• This creates a new opportunity for conflict at COPs in the future, and the L&D fund may take years to start making a real difference because just a third of committed climate financing has reached developing nations.
• Even while the progress is gradual, nations must maintain their momentum and put up more effort to make sure that COPs continue to serve as credible catalysts rather than being occasions for pyrrhic victories.

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Some Important FAQs

MCQs

Question: Which of the following includes Loss & Damage due to climate change

1. Impacts of climate change that cannot be avoided by mitigation or adaptation.
2. Economic damage to property.
3. Destruction of biodiversity and sites that have cultural importance.

Which of the above statements is/are correct?

(a) 1 and 2 only

(b) 2 and 3 only

(c) 1 and 3 only

(d) 1,2 and 3